Yellen Proclaims Neutral IRS Algorithms ‘Racially Biased’

Janet Yellen, President Joe Biden’s Treasury Secretary, made a startling claim in Friday’s testimony to the House Ways and Means Committee. IRS audits, which depend on colorblind algorithms, are still somehow racially biased.

Leave it to the Biden administration to find racism where none could possibly exist. 

Yellen told the committee that the IRS “doesn’t know an individual’s race and we are certainly not proposing that race be reported on tax returns.” She added, however, that the agency must take care to guarantee “fairness in tax administration.”

Her comments came during a hearing on Biden’s gargantuan 2024 federal budget request.

Yellen’s statement should hardly come as a surprise. It was just last month when Biden signed an executive order for the creation of “Agency Equity Teams.” Federal agencies are also now required to ensure that artificial intelligence they utilize advanced so-called “equity.”

The Treasury Secretary’s remarks were in response to a question from committee chair Rep. Jason Smith (R-MO) about that equity plan. He asked if the president’s edict to “prevent and remedy discrimination” meant the tax agency would “make audit decisions based on people’s race.”

Yellen answered negatively but then said it is critical for the IRS to acknowledge potential disparities in auditing and develop protocols to ensure fairness in the system.

A Stanford University study published earlier this year showed that Black taxpayers receive mailed audit notices at least 2.9 times more than other filers. Of course, not every difference has an ominous reason behind it.

As Black households are more likely to file for the earned income tax credit (EITC), this triggers letters seeking more documentation over the filing status.

Yellen recognized the disparity in results but said “that certainly does not mean looking at race and deciding whom to audit.”

Which is good news — if it’s true. What is likely is that the equity-obsessed Biden administration will force the IRS to change the algorithm used to send out audit notices asking for authentication of EITC claims.

These notices, of course, are done to prevent fraud. That does not matter, however, as long as the demographics of those receiving the letters do not match White House goals. In that case, the process must be flawed and has to change.