May 15,2023

Wyden Statement on IRS Letter on Racial Bias in Audits

Washington, D.C.—Senate Finance Committee Chair Ron Wyden, D-Ore., today issued the following statement on IRS Commissioner Werfel’s letter regarding racial bias in audits: 

“Researchers did a great service spotting the racial bias in the algorithms that guide audit selection, and even before Commissioner Werfel was confirmed by the Senate, he pledged that he’d get to the bottom of it.

“In my view this was a shameful consequence of two main issues. First, the racial discrimination that has plagued American society for centuries routinely shows up in algorithms that governments and private organizations put in place, even when those algorithms are intended to be race-neutral. This bias is completely unacceptable regardless of where it occurs, and we have an obligation to stamp it out. You cannot have equality in society if algorithms and other automated systems that affect people’s lives treat them differently based on the color of their skin. This is an issue I’ve worked on solving for years, both in the context of government agencies and in the private sector. In the coming weeks I’m going to reintroduce my Algorithmic Accountability Act to require audits of private sector algorithms for racial bias, and I’m interested in requiring similar protections against bias in government systems.

“Second, over the previous decade, Republicans strategically gutted the IRS budget in a way that made it virtually impossible to enforce our tax laws fairly. Those cuts led to an exodus of the highly-trained staff who know how to root out tax cheating by the wealthy and corporations and an overreliance on these flawed algorithms that we now know trigger a disproportionate number of audits on Black Americans. 

“The IRS is currently in the process of overhauling its approach to tax enforcement with the funding it received in the Inflation Reduction Act. I’m going to ensure that as part of that overhaul, the IRS retools these algorithms to eliminate any racial bias. Commissioner Werfel has committed to implement changes to fix this issue before the next tax filing season begins, but it’s clear there’s more to learn and a lot of work to be done. As Chairman of the Senate Finance Committee I expect the IRS to provide regular, public updates on their progress.”