The IRS Plans To Take It Easier On Low Income Taxpayers Next Year


Various pages of the US IRS tax return forms with business tools

Low-income Americans with tax investigations can breathe a sigh of relief this upcoming tax season.

Per a Yahoo Finance report, the IRS announced this week that it plans to cut back on audits for those who qualified for the earned income tax credit (EITC), a tax benefit traditionally relegated to lower-earning taxpayers. The agency will shift its efforts toward doing deeper dives into the tax activity of those in higher tax brackets.

“Over-reliance on audits to resolve basic errors can lead to fewer taxpayers receiving credits and deductions for which they are eligible and thus decrease accuracy in tax administration,” Commissioner Daniel I. Werfel said in a statement earlier this week to the Senate Finance Committee. “We are making broad efforts to overhaul compliance efforts in a manner that robustly advances our commitment to fair, equitable, and effective tax administration.”

Minorities and lower income individuals have notoriously been targeted by the IRS, but the latest announcement from the agency is positive a step toward eradicating the stark racial disparities of the past.

“The Commissioner’s letter to the Senate was a great first start,” Dorothy Brown, lawyer and tax professor at Georgetown Law, said in an interview with Yahoo Finance. “Going forward, he needs to ensure that regardless of income level, Black taxpayers are not more likely to be audited than non-Black taxpayers.”

The outlet pointed out that nearly half of last year’s IRS audits targeted household with less than $25,000 in earnings per a  Syracuse University’s Transactional Records Access Clearinghouse. What’s more, the families were informed about the audits by mail, a notice that could easily be missed.

Joanna Ain of nonprofit Prosperity Now, told Yahoo Finance: “The initiative outlined in this letter is an outcome of the incredible work of legal thinkers and tax law professors like Dorothy Brown and Steven Dean to bring this disparity to the attention of the media and policymakers.”


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