IRS staff and resources that had been dedicated to earned income tax credit correspondence audits are being redeployed to pursue questionable return preparers and reverse a spike in frivolous returns filed.
Speaking October 25 at a meeting of the Council for Electronic Revenue Communication Advancement, Jim Clifford, director of return integrity and compliance service at the IRS, said that “there was a confluence of factors” that convinced the agency to rethink its approach to EITC compliance.
Chief among those factors was a Stanford University study on racial disparities in EITC audits released earlier this year, which concluded that Black taxpayers were about five times more likely to be audited than non-Black taxpayers, Clifford said. “That was shocking information to us,” he added.
“What we found out was they were...
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