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Posted: 2022-03-10T20:20:59Z | Updated: 2022-03-10T21:42:42Z

Households that claimed low-income tax credits were five times likelier to get audited by the Internal Revenue Service last year than other taxpayers, according to a new report from Syracuse University .

Parents earning less than $25,000 who claimed the earned income tax credit, which serves as a work bonus for low-wage workers with kids, were disproportionately represented among the tiny fraction of taxpayers audited in 2021.

For every 1,000 households that claimed the credit, 13 wound up getting contacted by the IRS, according to the Transactional Records Access Clearinghouse at Syracuse, compared to just 2.6 out of every 1,000 filers who didnt claim the credit.

Its not a new pattern for decades, Congress has encouraged the IRS to crack down on fraud among tax credit beneficiaries , many of whom improperly claim the credit, some willfully but many may have misunderstood the programs complicated rules or simply failed to document their eligibility.

Still, Susan Long, the Syracuse professor who compiled the statistics, told HuffPost she was taken aback by the relative audit rates for low-income households versus everyone else.

Does it make sense from either an equity or revenue standpoint to focus IRSs limited firepower on the poorest taxpayers among us those with incomes so low they have filed returns claiming an anti-poverty earned income tax credit? Long wrote.

Longs report is based on internal IRS data released to Syracuse by court order in response to an earlier Freedom of Information Act request. The IRS releases similar numbers, but on a delay, with the most recent compliance data reflecting the year 2020.

The Government Accountability Office, a congressional investigator, and the National Taxpayer Advocate, an IRS watchdog, have previously recommended that the IRS focus more of its auditing powers on higher earners, especially filers who avoid taxes by under-reporting their business income. Higher-income taxpayers contribute to a much larger share of the so-called tax gap than lower earners do.

The IRS has said that it cant just redirect the relatively simple low-income credit audits, which typically consist of letters asking for more information about part of a return, toward higher earners with more complicated returns.

The typical audits for higher-income taxpayers involve at least three different tax years, often include related entities, and routinely take years to resolve, then-deputy commissioner Sunita Lough wrote in 2020 . Also, Lough noted that the fewer households earning more than $10 million face the highest likelihood of an audit.

I dont think the problem is that 1.3% of EITC recipients are getting audited, Janet Holtzblatt, a senior fellow with the Urban-Brookings Tax Policy Center, said in an interview. The problem is the difficulty taxpayers have in responding to the audit, plus the fact that theyre not auditing enough of the wealthy and big corporations.

One problem with all the earned income tax credit audits, Holtzblatt noted, is that many low-income filers may have made honest mistakes in claiming the credits, and some might not understand the audit letters they receive. Fully 43% of EITC claimants who were audited in 2018 simply didnt respond, essentially forfeiting the benefit.

Democrats want to boost the IRSs funding so it can hire more examiners. They also want to require financial institutions to report to the IRS on customer deposits and withdrawals exceeding $10,000 annually. Their proposal was designed to catch tax avoidance by people with business income that doesnt get automatically reported to the IRS the same way as wages do. Republicans have falsely claimed anyone who spends $28 per day would get audited.

In response to the Syracuse report, Sen. Ron Wyden (D-Ore.), the top Senate Democrat on tax policy, said he wanted to give the IRS the help it needs to go after wealthy tax cheats.

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America has two tax codes, Wyden said on Twitter . One thats optional and lets wealthy tax cheats get away without paying what they owe, and one thats mandatory for working Americans who pay taxes paycheck to paycheck.

Support Free Journalism

Consider supporting HuffPost starting at $2 to help us provide free, quality journalism that puts people first.

Thank you for your past contribution to HuffPost. We are sincerely grateful for readers like you who help us ensure that we can keep our journalism free for everyone.

The stakes are high this year, and our 2024 coverage could use continued support. Would you consider becoming a regular HuffPost contributor?

Thank you for your past contribution to HuffPost. We are sincerely grateful for readers like you who help us ensure that we can keep our journalism free for everyone.

The stakes are high this year, and our 2024 coverage could use continued support. We hope you'll consider contributing to HuffPost once more.

Support HuffPost