Dear John,

Pop quiz: Does the IRS prioritize audits of wealthy citizens, seeking to catch the nation’s biggest, most egregious tax cheats and hold them to account?

Or does it primarily audit low-income communities who can least afford to pay?

If you went with the latter, you got it right -- while the IRS gets it all wrong.

It shouldn’t come as a shock that after decades of evisceration by Republicans in Congress, an understaffed and underfunded IRS have prioritized algorithms that go after the low hanging fruit. It’s just easier and less expensive to track poor folks who made errors in, say, claiming the Earned Income Tax Credit, than it is to bring in specialists to ferret out the more complex boondoggles of the nation’s wealthiest tax cheats.

The result? The five most audited counties in the U.S. today are Southern, low-income, and majority African American.

That hasn’t stopped Republicans from trying to gut the new IRS funding Democrats passed last year. And with the power of corporate lobbyists and the ultra-rich in our nation’s capital, they might get some Democrats to join them.

We need to make sure every member of Congress knows the public supports increased investment in the IRS, directed toward investigation of the wealthiest tax cheats. Please sign and send a direct message to your members of Congress now.

Underfunding the IRS gives greater advantage to the most advantaged, turning the gaze of the IRS away from the rich (“Nothing to see over here, guys!”) and toward the least privileged members of society.

How can we fix this? We need to defend funding that instructs the IRS specifically to go after wealthy tax cheats.

That’s exactly what President Biden’s Inflation Reduction Act does. $40 billion of its $80 billion total goes toward enforcement directed specifically at the nation’s wealthiest frauds.

And now, in one of its first official acts, the Republican House has passed a bill that rescinds this essential funding. This specific bill isn’t likely to make it through the Senate, but Republicans will keep trying. They’re planning to push for IRS funding cuts over and over again, a death by a thousand cuts strategy that just might work.

That’s why we need to speak up today. Tell your congressperson to support full funding for the IRS to go after ultra-rich criminal tax cheats and hold them accountable.

But wait -- it gets worse. It’s important to understand why the Earned Income Tax Credit (EITC) is such a problematic target. The EITC is the nation’s largest anti-poverty program. It provides over $60 billion of relief to low-income working families every year. It’s no accident that with a gutted budget, the IRS has dramatically increased its EITC audits while simultaneously reducing its audits on millionaires.

And just how bad is the racial disparity, given that the algorithms make no specific mention of “race”? According to the New York Times, a recent study shows that “Black taxpayers are at least three times as likely to be audited by the Internal Revenue Service as other taxpayers” even in comparison to others who submit EITC claims.

The study says it’s not that individual IRS agents are biased. Rather, it is a systemic issue due to selecting easy-to-conduct investigations of people who are not reporting business income. Yet there can be no doubt the results are racially uneven.

The research suggests an easy fix: Target the rich for audits, where returns are more complex and the potential benefits of uncovering fraud are much larger, not working families and the poorest Americans.

Support the nation’s investment in the IRS, while increasing the fairness of its practices. Sign and send your message now.

Thank you for your attention to this complex and important issue.

Robert Reich
Inequality Media Civic Action