'Lower-income Americans are audited by the IRS at five times the rate of everyone else,' noted SenWarren.
led by two IRS researchers estimated that the richest 1% of U.S. households don't report 21% of their income.showing that the IRS audited low-income wage earners at a rate five times higher than everyone else in Fiscal Year 2021.
"Over half—fully 54%—of all correspondence audits last year targeted the small proportion of returns with gross receipts of less than $25,000 claiming an earned income tax credit," the analysis found."Even taxpayers with total positive income from $200,000 to $1,000,000 had only one-third the odds of audit compared with these lowest-income wage earners.
"The IRS data referenced by Commissioner Rettig show that in Tax Year 2018, taxpayers with incomes below $25,000 were nearly 2.5 times more likely to be audited compared to all other taxpayers," the lawmakers wrote."The most vulnerable taxpayers should not shoulder the burden of insufficient IRS enforcement funding simply because they require fewer resources to audit."
Warren and Chu stressed that IRS auditing practices can have significant material consequences for poor families. "Correspondence audits of low-income individuals have discouraged taxpayers from filing taxes and from claiming the Earned Income Tax Credit , an important credit that reduces poverty and incentivizes people to join the labor force," the lawmakers wrote."This works against the IRS' goal of increasing EITC awareness and the EITC participation rate."
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