The IRS has released updates on its internal investigation into its tax auditing practices.

The agency revealed on Monday that Black taxpayers face a higher likelihood of being audited compared to other taxpayer groups.

“[O]ur initial findings support the conclusion that Black taxpayers may be audited at higher rates than would be expected given their share of the population,” IRS Commissioner Daniel Werfel wrote in a letter to the U.S. Senate.

The agency’s investigation was launched following a Stanford University study conducted by a team of researchers. They found Black tax payers are five times more likely to be audited. When the results of the study were released in early 2023, lawmakers, taxpayer rights organizations, and other policy experts called for the IRS to do its own investigation into the disproportionate auditing of Black Americans.

Impact on Black Women

An earlier study from 2022 also uncovered that low-income Americans are five times as likely to get audited than taxpayers making a higher income. Black and brown women continue to be adversely affected by poverty rates. There has been continued discussion around the implications of the IRS auditing practices for Black women. These questions are also directly connected to the racial wealth gap — which also disproportionately affects Black women.

Conversations around wealth building and financial literacy remain an important tool for increasing awareness of the systemic issues that limit Black women’s financial growth and how they can navigate these challenges.

“Consistent financial education has to be a resource that we are constantly applying,” financial expert Marsha Barnes told Black Girl Nerds in an interview focused on financial education for Black women.

Barnes added that equipping women with the tools to make smart economic choices early, prepares them for a stable financial life.
However, as the Georgetown Law Center on Poverty and Inequality details, financial education resources and programs must center on key concepts. Those include financial trauma and financial shaming to best address the specific issues affecting Black women’s financial health.