Demand IRS transparency, faster tax return processing times, fair auditing rates, and updated computer processing systems
To President Joe Biden, Commissioner of Internal Revenue Charles Rettig, U.S. Internal Revenue Service, and the United States 117th Congress
The American people have the right to be informed about their tax return information. The American people also have the right to have their tax returns processed in a fair and timely manner. In addition, the American people have a right to fair auditing rates and updated computer processing systems used by the IRS for processing tax returns. Lastly, the American people have the right to petition. The right to petition government for redress of grievances is the right to make a complaint to, or seek the assistance of, one's government, without fear of punishment or reprisals. The right to petition in the United States is granted by the First Amendment to the United States Constitution (1791). According to ProPublica and other recent news and tax processing articles, the IRS audits the working poor at nearly the same rate as the wealthiest 1% of American people. According to the IRS, "it is just easier and cheaper to audit poor people and until Congress enhances the IRS's budget, the IRS has no plans to change their current auditing system." According to ProPublica, the IRS agency uses relatively low-level employees to audit returns for low-income taxpayers who claim the earned income tax credit. The audits — of which there were about 380,000 last year, accounting for 39% of the total the IRS conducted — are done by mail and don’t take too much staff time, either. They are “the most efficient use of available IRS examination resources,” Rettig’s report says. For now, the IRS says, while it agrees auditing more wealthy taxpayers would be a good idea, without adequate funding there’s nothing it can do. “Congress must fund and the IRS must hire and train appropriate numbers of [auditors] to have appropriately balanced coverage across all income levels,” the report said. According to ProPublica, since 2011, Republicans in Congress have driven cuts to the IRS enforcement budget; it’s more than a quarter lower than its 2010 level, adjusting for inflation. According to Paul Kiel, low-income families who file for the Earned Income Tax Credit are audited by the Internal Revenue Service at a much higher rate than wealthier people. Since audits for wealthy people in the U.S. require much more work than for poor people, low-income families have been targeted at a disproportionate level. According to Fox Business News, (2019), low-income Americans claiming the EITC were twice as likely to be audited by the IRS than those with incomes between $200,000 and $500,000. About 300,000 EITC returns are audited per year, according to the IRS.As previously reported by FOX Business, the IRS audited 0.59 percent of individual tax returns, or about 892,000 returns in fiscal 2018 – fewer than the year prior when audits were at their lowest level since 2002. Rates for high-income earners (with adjusted gross income exceeding $10 million) fell to 6.66 percent, from more than 14 percent the year prior. That is the lowest level since at least 2008, when the tax agency began reporting the data. There was also a drop in audits for people with incomes between $1 million and $5 million, as well as $100,000 and $200,000. IRS Commissioner Charles Rettig said in testimony before lawmakers in April that he wants to work with Congress to focus audits on wealthier taxpayers. To do that, the agency would take a stronger look at issues and trends among higher-income returns, including pass-through examinations. He added that pass-through audits could be streamlined, and different questions could be asked. According to Rettig, complications related to the EITC arise because of the definition of what constitutes a qualifying child. Children must meet certain relation, age, residency and other requirements in order to qualify. He referred to the tax credit as a “very complex part of the internal revenue code.” According to a 2019 ProPublica news article, poor taxpayers continue to bear the brunt of the IRS’ remaining force. As we reported last year, Americans who receive the earned income tax credit, one of the country’s largest anti-poverty programs, are audited at a higher rate than all but the richest taxpayers. The new data shows that the trend has only grown stronger. Audits of the rich continue to plunge while those of the poor hold steady, and the two audit rates are converging. Last year, the top 1% of taxpayers by income were audited at a rate of 1.56%. EITC recipients, who typically have annual income under $20,000, were audited at 1.41%. “While the wealthy now have an open invitation to cheat, low-income taxpayers are receiving heightened scrutiny because they can be audited far more easily. All it takes is a letter instead of a team of investigators and lawyers,” said Sen. Ron Wyden, D-Ore., the ranking member of the Senate Finance Committee. “We have two tax systems in this country,” he said, “and nothing illustrates that better than the IRS ignoring wealthy tax cheats while penalizing low-income workers over small mistakes.” The agency audited 382,000 recipients of the EITC in 2018, accounting for 43% of all audits of individuals last year. When we mapped the estimated audit rates for every county in America, the counties with the highest audit rates were poor, rural, mostly African American and in the South, a reflection of the high number of EITC claims there. According to a New York Times article written in April, 2000, for the first time, the poor were more likely than the rich to have their tax returns audited, new Internal Revenue Service data compiled by Syracuse University researchers shows. So, as you can see this has been going on for over 20 years and it is time for a change. We the people demand that the IRS processes our tax returns in a timely manner and audits poor people at a rate proportionate to that of wealthy people. It is unjust and unacceptable to audit poorer, working people at a higher rate than wealthier people and hold our returns while doing so. It shouldn't take 10 weeks or longer to verify income or identity. The IRS also needs to update its 60 year computer processing system. This too is unacceptable. Meanwhile, billions of dollars a year are dodged in taxes from large corporations and wealthy people because the IRS says it's just too hard, costly, and time consuming to audit rich people and corporations properly and that they simply don't have the man power to do so. This is severely unjust. The I.R.S. audited 1.36 percent of all tax returns filed by people making less than $25,000 last year, compared with 1.15 percent of returns filed by those making $100,000 or more. Since 1988, audit rates for the poor have increased by a third, from 1.03 percent, while falling 90 percent for the wealthiest Americans, from 11.4 percent. We demand a fair, timely, transparent, updated tax system for processing our tax returns.
"We The People"
Lauren B. Crouse 04/15/2021 9:56 A.M. EST