Professor Jeremy Bearer-Friend’s article “Colorblind Tax Enforcement,” forthcoming in the New York University Law Review (2022), explains that the United States Internal Revenue Service (IRS) has repeatedly taken the position that, because it does not ask taxpayers to identify their race or ethnicity on submitted tax returns, IRS enforcement actions are not affected by taxpayers' race or ethnicity. In his article, Professor Bearer-Friend refutes the IRS position by “identifying the conditions under which race and ethnicity could determine tax enforcement outcomes under three separate models of racial bias: racial animus, implicit bias, and transmitted bias.”
In this Q&A for the GW Law website, Professor Bearer-Friend, Associate Professor of Law, discusses his view of how race and ethnicity affect IRS enforcement practices.
Q: In your opinion, what is the IRS' position regarding racial or ethnic bias under its current enforcement practices?
The IRS has repeatedly taken the position that, because it does not ask taxpayers to identify their race or ethnicity, it is impossible for the IRS to base its enforcement actions on the race or ethnicity of taxpayers. I demonstrate that this position is false and that racial bias can still occur even without asking taxpayers to disclose their race or ethnicity.
Q: What does the IRS’ position ignore in the reality of enforcement? And, what leads you to this conclusion?
Since there are so many competing definitions of racial bias, I use three different models of racial bias to assess the vulnerability of current IRS enforcement practices to racial bias. I determine that racial bias remains possible across all major enforcement functions of the IRS and across all three models or racial bias, regardless of whether race or ethnicity are asked of taxpayers.
Racial bias is particularly concerning in settings where IRS personnel have discretion over a tax enforcement outcome and are exposed to taxpayer characteristics that can trigger bias, such as seeing taxpayer surnames on a tax form, or seeing their appearance in a conference with staff. To the extent racial bias determines taxpayer characteristics on which the IRS then bases its enforcement activity, racial bias in tax enforcement can also occur in settings where personnel do not have discretion over enforcement outcomes.
Q: Why does the absence of publicly available data on IRS enforcement activities matter, and why do you believe this data should be publicly available?
Over 150 million households file taxes every year, remitting trillions of dollars in taxes. The IRS settles disputes on tax debts, seizes assets, and both assesses and abates civil penalties. The IRS also refers taxpayers to the DOJ for criminal investigation and prosecution. The public is entitled to know how the burdens and benefits of our tax code are distributed. This applies not only to tax enforcement, but to all aspects of our tax system.
Q: In your opinion, what is a better way forward other than "colorblindness" with regards to IRS practices and data reporting?
The ongoing omission of race and ethnicity from federal tax data remains the biggest obstacle to addressing racial bias. Without transparency, there is no accountability.
Colorblind Tax Enforcement by Jeremy Bearer-Friend, Associate Professor of Law
- 97 NYU L. Rev. __ (2022 Forthcoming)
- GWU Legal Studies Research Paper No. 2021-48
- GWU Law School Public Law Research Paper No. 2021-48
The article is available at SSRN here.