Articles published around the country repeat Intuit’s assertion — sometimes almost word for word — that the upcoming IRS pilot program would hurt Black Americans. A researcher whose work is cited by Intuit says the company is misstating her findings.
The article doesn’t make it super clear what the basis for this claim is. I’ll try to summarize as best I can, and welcome anyone to correct me.
They’re saying that an IRS program to prefill tax information for the taxpayer (like what is done in so many other countries) would cause many people to miss tax credits. The tax credit they’re referring to is the Earned Income Tax Credit (EITC), which is “aimed at low-income, working class parents,” who usually earn less than $20K/yr. Since Black people in America have disproportionately lower incomes, this is how simplifiying taxes across the board for everyone would “hurt Black people.” And that Black people are audited at a rate three to five times the average taxpayer.
But wait. That increase in auditing is because of the EITC. “For decades, the IRS has disproportionately audited EITC claimants because of pressure from Republicans in Congress as well as laws that require a special focus on “improper payments.””
In fact, free assisted filing would ensure that more people appropriately get the EITC, and fewer people would be likely to claim it when they shouldn’t. Which (in concert with “stop over-auditing people just because they claimed EITC,” which is already happening) will reduce the auditing problem.
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