Accountancy intelligence to lead, innovate & grow.

Want to get your daily slice of Accountancy knowledge to your inbox? Sign up now

Accountancy Slice helps you stay ahead of essential accountancy news shaping your profession. Every weekday, our unique blend of AI, accountancy experts and researchers monitor 100,000s of articles and share a summary of the most relevant and useful content to help you lead, innovate and grow.

From Audit to Tax, Practice Management, Tech, Reporting and accounting firm news. Accountancy Slice is the only trusted online news source in the US dedicated to covering current headlines, articles, reports and interviews to make sure you’re at the forefront of changes in the accountancy industry.

AS banner
Recent Editions
 
as-recent-na
Accountancy Slice
North America
House subcommittee queries audit rates, IRS resources

Causes and cures for persistent high rates of improper payments of the earned income tax credit (EITC) and consequent high audit rates by the IRS of taxpayers claiming the credit were among topics discussed Wednesday by members of the Oversight Subcommittee of the House Ways & Means Committee. The session, "On Taxpayer Fairness Across the IRS," drew upon a report released Tuesday by the U.S. Government Accountability Office (GAO) that was compiled at the request of the subcommittee's chair, Rep. Bill Pascrell (D-NJ). At the outset of the hearing, Mr. Pascrell decried what he called "one tax system for the wealthy and another for everyone else," stating that the IRS's enforcement is experienced by billionaires in a "vastly different" mode than by the "average American." Claimants of the Earned Income Tax Credit (EITC) are much more likely to be audited than other taxpayers, Mr. Pascrell said. The GAO report found that the audit rate for EITC taxpayers is 0.77%, roughly three times the average for all taxpayers of 0.25%. IRS administrative shortcomings also adversely affect all taxpayers, Mr. Pascrell said. These include backlogs of returns in the tens of millions, erroneous notices to taxpayers, and unanswered taxpayer phone calls, he said. Ranking member Rep. Tom Rice (R-SC) likewise lamented slow processing times and spotty phone customer service, while praising the "heroic" efforts of IRS employees to administer COVID-19 tax relief measures such as economic impact payments (EIPs) amid the pandemic's impediments to the agency's own operations. Mr. Rice noted that this was the seventh time the subcommittee has examined the EITC, and he urged fellow legislators to "move beyond talking points" to better understand the reasons for an approximately 25% rate of improper payments of the credit annually, involving an estimated $19bn in the most recent tax year for which data is available

Full Issue
 
top-shadow
Read the latest Accountancy highlights