Auditing the Poor

For indispensable reporting on the coronavirus crisis, the election, and more, subscribe to the Mother Jones Daily newsletter.


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.

SIX TRUTHS

Reclaiming power from those who abuse it often starts with telling the truth. And in "This Is How Authoritarians Get Defeated," MoJo's Monika Bauerlein unpacks six truths to remember during the homestretch of an election where democracy, truth, and decency are on the line.

Truth #1: The chaos is the point.

Truth #2: Team Reality is bigger than it seems.

Truth #3: Facebook owns this.

Truth #4: When we go to work, we're in the fight.

Truth #5: It's about minority rule.

Truth #6: The only thing that can save us is…us.

Please take a moment to see how all these truths add up, because what happens in the weeks and months ahead will reverberate for at least a generation and we better be prepared.

And if you think journalism like Mother Jones'—that calls it like it is, that will never acquiesce to power, that looks where others don't—can help guide us through this historic, high-stakes moment, and you're able to right now, please help us reach our $350,000 goal by October 31 with a donation today. It's all hands on deck for democracy.

payment methods

SIX TRUTHS

Reclaiming power from those who abuse it often starts with telling the truth. And in "This Is How Authoritarians Get Defeated," MoJo's Monika Bauerlein unpacks six truths to remember during the homestretch of an election where democracy, truth, and decency are on the line.

Truth #1: The chaos is the point.

Truth #2: Team Reality is bigger than it seems.

Truth #3: Facebook owns this.

Truth #4: When we go to work, we're in the fight.

Truth #5: It's about minority rule.

Truth #6: The only thing that can save us is…us.

Please take a moment to see how all these truths add up, because what happens in the weeks and months ahead will reverberate for at least a generation and we better be prepared.

And if you think journalism like Mother Jones'—that calls it like it is, that will never acquiesce to power, that looks where others don't—can help guide us through this historic, high-stakes moment, and you're able to right now, please help us reach our $350,000 goal by October 31 with a donation today. It's all hands on deck for democracy.

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