IRS audits the poor at 5 times the rate of everyone else, analysis finds

[dalton99a]

https://www.cbsnews.com/news/irs-audit-eitc-five-times-as-likely-to-get-audited/

IRS audits the poor at 5 times the rate of everyone else, analysis finds
By Aimee Picchi
March 9, 2022 / 11:08 AM / MoneyWatch

Tax season is a fraught time for taxpayers, who are understandably eager to get their refunds quickly and who may fret that processing hiccups could delay their checks. But some Americans may have more grounds for concern than others: low-income households with less than $25,000 in annual earnings.

This group is five times as likely to be audited by the IRS as everyone else, according to a new analysis of IRS data by the Transactional Records Access Clearinghouse (TRAC) at Syracuse University. About 13 tax returns out of 1,000 filed by those earning less than $25,000 were audited in the fiscal year ended September 30, compared with a rate of 2.6 for every 1,000 returns for people with incomes above $25,000, TRAC found.

The reason is a rise in what are known as "correspondence audits," a review of a tax return that's typically handled by the IRS via letters and phone calls, as opposed to the typically more complex face-to-face audits. More than half of the correspondence audits initiated by the IRS last year involved low-income people who claimed the Earned Income Tax Credit (EITC), TRAC found.

That could prove concerning given the EITC was expanded through the American Rescue Plan, the $1.9 trillion pandemic relief bill signed into law last year by President Biden. For the first time, the EITC can be claimed by both younger workers and senior citizens, which means more people could find themselves on the other side of an IRS audit after filing their returns in the current tax season, which ends on April 18.

[ck4829]

1. All those times I've been told "But the rich know all the loopholes. They're smart like that."

No, they're not. THIS is what happened.

Time for some class warfare.

Link to the wise: Billionaires Cause Inflation

[Thomas Hurt]

2. Well sure, the rich can afford to hire accountants to take advantage of every loophole and push

their tax bill down. Poorer folks are left trying to make sure they are not screwing up their taxes even though they can be complicated.

[ItsjustMe]

3. I can confirm that this is true

My mother worked as a tax examiner at the IRS, she stated that the poor were targeted more often because they could not afford to defend themselves.

[Totally Tunsie]

6. Bingo!

[uponit7771]

4. Damn

[D_Master81]

5. As a tax preparer this isn't surprising

It’s been the case for awhile that if you get the Earned Income Credit it was the most likely to get audited. This sounds bad but honestly if you’re making 25,000 and getting a tax refund of $9000 like I’ve seen it’s not a bad thing to make sure it’s a legit filing as opposed to gaming the system by claiming someone who doesn’t live with you. Most of the time people are legit but it happens. And the shear number of lower income filers vs high income business owners which is the next highest audited group just isnt close by volume.