Elizabeth Warren and Judy Chu wrote to the IRS to ask why the agency has doubled its audits of those making less than $25,000 a year.
why audits of low-income taxpayers have doubled over the past year.
The letter, addressed to IRS Commissioner Chuck Rettig and Treasury Secretary Janet Yellen, points out that IRS audits of low-income earners doubled in fiscal year 2021 and that the practice of disproportionately auditing this group goes against President Joe Biden’s pledge to not increase tax scrutiny of people making less than $400,000 in income.
This is largely because it’s less resource intensive for the IRS to examine the finances of low-income taxpayers than to attempt to untangle the assets of the ultra-wealthy. The rate of audits for low-income Americans is still increasing, the lawmakers say, a concerning trend as the wealth gap“We know the IRS suffers from underfunding, and we are working to secure substantial, permanent funding so the IRS can take on the tax cheating of giant corporations and the ultra-wealthy.
In a hearing last month, Rettig denied that the poorest Americans were audited at a higher rate, calling the assertion “absolutely 100 percent false.” But the lawmakers point out that the IRS commissioner was relying on old data; more recent data from the last four years tells a different story.
The latest Internal Revenue Service statistics covering federal income tax audits through February of 2022 reveal that the agency is continuing to target audits on the poorest wage earners.