Yellen answers whether IRS will consider race, gender in audits as part of Biden 'equity' push
Treasury Secretary Janet Yellen says there are no plans for IRS to use race or gender as considerations when determining who to audit
GOP congressman presses Yellen on whether IRS will use race, gender in audits
Rep. Jason Smith, R-Mo., asked Treasury Secretary Janet Yellen whether the IRS will use race or gender in deciding audits in response to the Biden administration's "equity" push.
Treasury Secretary Janet Yellen told lawmakers on Friday there are no plans to require race be reported on tax returns.
"IRS doesn't know an individuals race, and we are certainly not proposing that race be reported on tax returns," Yellen said. "However, the IRS does need to be careful to ensure that there is fairness in tax administration."
Her remarks on race came in response to a question from House Ways and Means Committee Chairman Rep. Jason Smith, R-Mo., who asked about President Biden's Feb. 16 executive order directing federal agencies to produce an annual "equity action plan."
TWITTER USERS ERUPT AT IRS' CALLS FOR THIEVES TO REPORT STOLEN INCOME: ‘GOOD TO KNOW’
Treasury Secretary Janet Yellen testifies before a hearing of the House Committee on Ways and Means on the administration's proposed budget for fiscal year 2024, on Capitol Hill in Washington, D.C., March 10, 2023. (BRENDAN SMIALOWSKI/AFP via Getty Images / Getty Images)
Smith wanted to know whether Biden's order to "prevent and remedy discrimination" means the IRS is planning to change its process "to make audit decisions based on taxpayers' race."
Yellen denied this was the case. The Treasury secretary pointed to studies that have shown algorithms used by the IRS may be racially biased and said it was important for the IRS to become aware of potential disparities in its audit process and develop means to make the system more fair.
WERFEL CONFIRMED AS NEXT IRS HEAD
Chairman Jason Smith, R-Mo., questioned Treasury Secretary Janet Yellen on whether the IRS will use race and gender to determine who to audit, following President Biden's executive order on "equity." (Bill Clark/CQ-Roll Call, Inc via Getty Images / Getty Images)
Earlier this year, Stanford University published a study that found Black taxpayers receive IRS audit notices at least 2.9 times more often than non-Black taxpayers. Researchers suggested this disparity was caused by internal IRS algorithms that produce selection bias and suggested ways by which the IRS could adjust its algorithms to reduce disparate impacts.
"The IRS does need to be careful to ensure that there is fairness in tax administration," Yellen said. "And when studies like some that have been recently published suggest that algorithms that the IRS may be using are racially biased — in the sense they are much more likely to audit for people of color rather than others with exactly similar circumstances — it's important for the IRS to become aware of that and to make sure that the procedures that they use are fair."
EXPECTING A TAX REFUND FROM THE IRS? HERE'S WHEN IT COULD ARRIVE
President Biden signed an executive order on Feb 16 requiring that federal agencies develop an "equity action plan" to ensure that agency resources are reaching "undeserved communities." (Fatih Aktas/Anadolu Agency via Getty Images / Getty Images)
"But that certainly does not mean looking at race and deciding whom to audit," she added.
CLICK HERE TO GET THE FOX NEWS APP
Yellen also noted that the IRS does not collect racial data from taxpayers and would not be able to use race as a determinative factor in deciding who to audit in the first place.
Yellen was called to testify before the House Ways and Means Committee on Friday after Biden released his 2024 budget proposal the day before. The president's budget calls for increased taxes on wealthy Americans and cuts in energy subsidies for oil and gas companies to cut the deficit.