Auditing the Poor

Let our journalists help you make sense of the noise: Subscribe to the Mother Jones Daily newsletter and get a recap of news that matters.


David Cay Johnston of the New York Times reported yesterday that the IRS has been freezing tax refunds for hundreds of thousands of poor Americans—most of them involving the EITC, a tax credit for the working poor—by labeling their tax returns “fraudulent.” About 66 percent of the people whose records were frozen were found to be owed all of the money they claimed or more.

Now tax fraud is tax fraud, and it’s nice that the IRS is pursuing it, but tax fraud by the working poor amounts to some $9 billion a year, if that—and many of these supposed “fraud” cases involve people who filled out the wrong form or somehow couldn’t afford a tax accountant to jigger the numbers just right. About 40 percent of low-income Americans have never even heard of the EITC. Meanwhile, as Max Sawicky points out, corporations and wealthy Americans manage to dodge some $340 billion in taxes each year And not surprisingly, the IRS tends to spend a disproportionate amount resources going after the poor, in part because it’s easier—there are fewer lawyers to deal with, the poor tend not to complain, etc.

This partly comes out of the fact that the IRS has become seriously underfunded, especially after taking a beating from the right throughout the ’90s. So the agency has focused more and more on “easier” targets. But what’s happening is also conscious policy. In 2000 House Republicans tried to cut the EITC, which, in the tiny world of small-bore anti-poverty policies, has been one of the most successful. They failed. So instead they decided to use the IRS as a means of attacking the program. And last September, the House Republican Study Committee proposed even more “intensive” audits of EITC filers, although they were apparently uninterested in that $340 billion sitting around. In fact, the IRS won’t even release its “records on how thoroughly [it] audits big corporations and the rich.” Wonder why.

IT'S NOT THAT WE'RE SCREWED WITHOUT TRUMP:

"It's that we're screwed with or without him if we can't show the public that what we do matters for the long term," writes Mother Jones CEO Monika Bauerlein as she kicks off our drive to raise $350,000 in donations from readers by July 17.

This is a big one for us. It's our first time asking for an outpouring of support since screams of FAKE NEWS and so much of what Trump stood for made everything we do so visceral. Like most newsrooms, we face incredibly hard budget realities, and it's unnerving needing to raise big money when traffic is down.

So, as we ask you to consider supporting our team's journalism, we thought we'd slow down and check in about where Mother Jones is and where we're going after the chaotic last several years. This comparatively slow moment is also an urgent one for Mother Jones: You can read more in "Slow News Is Good News," and if you're able to, please support our team's hard-hitting journalism and help us reach our big $350,000 goal with a donation today.

payment methods

IT'S NOT THAT WE'RE SCREWED WITHOUT TRUMP:

"It's that we're screwed with or without him if we can't show the public that what we do matters for the long term," writes Mother Jones CEO Monika Bauerlein as she kicks off our drive to raise $350,000 in donations from readers by July 17.

This is a big one for us. So, as we ask you to consider supporting our team's journalism, we thought we'd slow down and check in about where Mother Jones is and where we're going after the chaotic last several years. This comparatively slow moment is also an urgent one for Mother Jones: You can read more in "Slow News Is Good News," and if you're able to, please support our team's hard-hitting journalism and help us reach our big $350,000 goal with a donation today.

payment methods

We Recommend

Latest

Sign up for our free newsletter

Subscribe to the Mother Jones Daily to have our top stories delivered directly to your inbox.

Get our award-winning magazine

Save big on a full year of investigations, ideas, and insights.

Subscribe

Support our journalism

Help Mother Jones' reporters dig deep with a tax-deductible donation.

Donate