Auditing Bias Lingers in Outdated IRS System, Watchdog Finds

The automated IRS system that flags certain claims of refundable tax credits for audits has potential for unintended bias among different demographic groups, according to a report from a government watchdog.

The Government Accountability Office found that the IRS doesn’t comprehensively review the data inputs and assumptions that could create inequity in its primary system for flagging noncompliance, even though the agency doesn’t collect data on taxpayers’ race or ethnicity. For example, some risk scores in the system are different based on gender—which could create bias—and haven’t been updated since 2001, according to the report released to the public ...