WASHINGTON, D.C. – Today, America First Legal (AFL) filed a lawsuit against the Internal Revenue Service (IRS) and the Department of the Treasury for unlawfully concealing records regarding the Biden Administration’s plans for race-based tax audits.
Congress prohibits the IRS from collecting data on taxpayer race and ethnicity directly and from acquiring such data indirectly from other agencies. However, to advance the “equity” cult, the Biden Administration simply steamrolled the law. On May 18, 2021, the Department’s Deputy Secretary Wally Adeyemo said that “racial equity” was a key factor in the Administration’s “design of tax compliance.” On December 14, 2021, Adeyemo and Assistant Secretary for Tax Policy Lily Batchelder said that the Census Bureau, the IRS Research, Applied Analytics and Statistics (RAAS) Division, and “other data producers” were working with the Department to circumvent nondiscrimination law by obtaining “microdata on race and ethnicity” and otherwise imputing “race and ethnicity for tax data.”
On February 21, 2023, America First Legal opened a Freedom of Information Act (FOIA) investigation of the IRS and the Treasury to expose the Biden Administration’s race-based tax audit and enforcement decisions.
Despite Treasury Secretary Yellen’s testimony to Congress denying that the IRS planned to change its process to make audit decisions based on taxpayers’ race, Biden’s Treasury Advisory Committee on Racial Equity (TACRE) has continued to advance the Administration’s race-based policies. On June 8, 2023, the Committee recommended that it would “report to the Secretary by March 2024 on the changes implemented to correct disparities in tax audits.” On September 19, 2023, IRS Commissioner Werfel described two new changes that would reduce racial disparities in audits: 1) reducing the number of correspondence audits of refundable credits and 2) changing the earned income tax credit (EITC) audit selection process. By then, the Committee began discussing ways to “receive redress for folks who were overly audited,” and they revisited the topic during their December 7, 2023 meeting. Last week, Rep. Jasmine Crockett (D-TX) appeared on an episode of the Black Lawyer Podcast suggesting that black Americans should be exempt from paying taxes as a form of reparations but also admitted that the plan may not be a success because many within the black community “aren’t really paying taxes in the first place.”
To date, both the IRS and the Department of the Treasury have refused to comply with the law and turn over records. To expose the truth, protect the rule of law, and stop federal tax enforcement from becoming a weapon in the equity cult’s ongoing war against our Constitution and equal rights for all Americans, AFL has filed suit.
Statement from America First Legal Counsel Michael Ding:
“In a Woke world, nothing can be said to be certain, except death, taxes, and racism. Months ago, the Biden Administration actually changed tax audit policies to further advance its divisive equity agenda, and its radical allies are now pushing for even more. No American should worry whether the IRS is more likely to audit them this year than last year because of their race.” said Michael Ding.
Read the lawsuit here.
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