The Biden administration is scrambling to come up with ways to pay for its trillions of dollars of social program proposals. One such way they’ve proposed to do this is to give the Internal Revenue Service (IRS) more funding to go after potential tax cheats. Proponents say more money for the IRS will pay for itself by allowing the agency to go after millionaires and billionaires who are underpaying on their federal tax returns. However, if the IRS’s past track record is any indication, it will not be the rich and powerful that come under their microscope.
Before ProPublica resorted to publishing illegally leaked tax information on private citizens, they compiled troves of data on where the IRS conducts audits and which United States counties are targeted most frequently. This deep dive revealed that the most audited county in the United States is not one near financial meccas like New York, Los Angeles, or Chicago. No, rather, the most IRS audits per capita are directed at Humphreys County, Mississippi, a rural county near the delta, know for catfish farming.
Humphreys is not some bastion of secret wealth hidden in the Deep South. According to the U.S. Census Bureau, well over one-third of Humphreys’ residents live below the poverty line. The average income of this humble county is roughly $18,000 per year. The economic issues in Humphreys County are fueling a dramatic decline in population over the last decade. There is hardly enough money to go around in counties like this, yet the IRS seems to believe there is too much and these poor catfish farmers are secretly hoarding wealth.
Also of note, over 75 percent of Humphreys County residents are African-American. This makes Humphreys one of 151 counties in America where African-Americans, Hispanics, or Native Americans/Alaska Natives comprise the demographic majority. This is where the trends in the IRS data take an even darker turn. Of these 151 counties – spread out from Miami-Dade County in Florida to Nome Census Area in northwest Alaska – 144 of them are targeted for audits at rates well higher than the national average. This is not a coincidence.
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The IRS is not even particularly shy about leaning into this trend. When questioned by lawmakers on Capitol Hill in late 2019, IRS Commissioner Charles Rettig described audits of poor Americans as “the most efficient use of available IRS examination resources.” Rettig’s justification for this answer is perhaps worse. Simply put, auditing poorer Americans from disadvantaged communities is easier. It requires less staff time because they don’t have the adequate resources to fight back.
It’s easy to see how this cycle continues and will become worse over time if not addressed. The IRS targets those who are disadvantaged because they don’t have the will or the ability to fight back. This makes sure they’re not making any more money. These communities then remain economically disadvantaged because they have become outsized targets for the power of the federal government. They then remain targets because they are economically disadvantaged and can’t fight back when the time comes. On and on it goes – and has gone.
Sinisterly, the roots of this trend are seen dating all the way back to the slave trade era. For example, the counties in Alabama where there are majority Black populations, form a sort of stripe across the middle of the state. This is due to the fertile soil in these areas. That meant it was prime real estate for aggressive farming, spurred on by slave labor. This led to outsized slave populations, which leads to the prevalence of Black communities in these areas today. The IRS looks at the crippling effect slavery had on these communities and sees not injustice, but opportunities for cost-effective audits, ensuring these communities do not succeed economically beyond what the IRS believes is permissible.
Now, members of Congress and of the administration are calling for stepped up IRS enforcement to generate more revenue to fund projects included in the Build Back Better Act. They claim that this will enable the agency to go after wealthy Americans who are taking advantage of the tax code. We need only look at how the IRS has used the funding already at its disposal to see that this will not be the case. We need only take the head of that agency at face value when he says it is more efficient to go after poor Americans.
Members of Congress like Reps. Alexandria Ocasio-Cortez (D-NY) and Ilhan Omar (D-MN) have touted the social justice benefits of the Build Back Better Act – likely with the best intentions. However, empowering the IRS to continue to hold down disadvantaged communities – and target them for harassment when they do attain success – will have the opposite of the intended effect. Striving for economic justice ought to begin with reining in the abuses of the IRS, not enabling it any further.
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