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Incident 461: IRS Audited Black Taxpayers More Frequently Reportedly Due to Algorithm

Description: The IRS was auditing Black taxpayers more frequently than other groups allegedly due to the design of their algorithms, focusing on easier-to-conduct audits which inadvertently correlated with the group's pattern of tax filing errors.

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Alleged: Internal Revenue Service developed and deployed an AI system, which harmed Black taxpayers.

Incident Stats

Incident ID
461
Report Count
4
Incident Date
2008-07-18
Editors
Khoa Lam
Applied Taxonomies
CSETv1, MIT

CSETv1 Taxonomy Classifications

Taxonomy Details

Incident Number

The number of the incident in the AI Incident Database.
 

461

Special Interest Intangible Harm

An assessment of whether a special interest intangible harm occurred. This assessment does not consider the context of the intangible harm, if an AI was involved, or if there is characterizable class or subgroup of harmed entities. It is also not assessing if an intangible harm occurred. It is only asking if a special interest intangible harm occurred.
 

yes

Date of Incident Year

The year in which the incident occurred. If there are multiple harms or occurrences of the incident, list the earliest. If a precise date is unavailable, but the available sources provide a basis for estimating the year, estimate. Otherwise, leave blank. Enter in the format of YYYY
 

2023

Date of Incident Month

The month in which the incident occurred. If there are multiple harms or occurrences of the incident, list the earliest. If a precise date is unavailable, but the available sources provide a basis for estimating the month, estimate. Otherwise, leave blank. Enter in the format of MM
 

01

Date of Incident Day

The day on which the incident occurred. If a precise date is unavailable, leave blank. Enter in the format of DD
 

Estimated Date

“Yes” if the data was estimated. “No” otherwise.
 

No

MIT Taxonomy Classifications

Machine-Classified
Taxonomy Details

Risk Subdomain

A further 23 subdomains create an accessible and understandable classification of hazards and harms associated with AI
 

1.1. Unfair discrimination and misrepresentation

Risk Domain

The Domain Taxonomy of AI Risks classifies risks into seven AI risk domains: (1) Discrimination & toxicity, (2) Privacy & security, (3) Misinformation, (4) Malicious actors & misuse, (5) Human-computer interaction, (6) Socioeconomic & environmental harms, and (7) AI system safety, failures & limitations.
 
  1. Discrimination and Toxicity

Entity

Which, if any, entity is presented as the main cause of the risk
 

AI

Timing

The stage in the AI lifecycle at which the risk is presented as occurring
 

Post-deployment

Intent

Whether the risk is presented as occurring as an expected or unexpected outcome from pursuing a goal
 

Unintentional

Incident Reports

Reports Timeline

Incident Occurrence+3
Measuring and Mitigating Racial Disparities in Tax Audits
Measuring and Mitigating Racial Disparities in Tax Audits

Measuring and Mitigating Racial Disparities in Tax Audits

siepr.stanford.edu

IRS Disproportionately Audits Black Taxpayers

IRS Disproportionately Audits Black Taxpayers

hai.stanford.edu

Black Americans Are Much More Likely to Face Tax Audits, Study Finds

Black Americans Are Much More Likely to Face Tax Audits, Study Finds

nytimes.com

Black taxpayers more than three times more likely to be audited by IRS

Black taxpayers more than three times more likely to be audited by IRS

thehill.com

Measuring and Mitigating Racial Disparities in Tax Audits
siepr.stanford.edu · 2023

Government agencies around the world use data-driven algorithms to allocate enforcement resources. Even when such algorithms are formally neutral with respect to protected characteristics like race, there is widespread concern that they can…

IRS Disproportionately Audits Black Taxpayers
hai.stanford.edu · 2023

Researchers have long wondered if the IRS uses its audit powers equitably. And now we have learned that it does not.

Black taxpayers receive IRS audit notices at least 2.9 times (and perhaps as much as 4.7 times) more often than non-Black t…

Black Americans Are Much More Likely to Face Tax Audits, Study Finds
nytimes.com · 2023

WASHINGTON — Black taxpayers are at least three times as likely to be audited by the Internal Revenue Service as other taxpayers, even after accounting for the differences in the types of returns each group is most likely to file, a team of…

Black taxpayers more than three times more likely to be audited by IRS
thehill.com · 2023

A new report published Monday found that the IRS audits Black taxpayers at a significantly higher rate than non-Black taxpayers.

The paper, published by Stanford’s Institute for Economic Policy Research, said that despite the IRS’s “race-bl…

Variants

A "variant" is an incident that shares the same causative factors, produces similar harms, and involves the same intelligent systems as a known AI incident. Rather than index variants as entirely separate incidents, we list variations of incidents under the first similar incident submitted to the database. Unlike other submission types to the incident database, variants are not required to have reporting in evidence external to the Incident Database. Learn more from the research paper.

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