Associate Professor Atinuke Adediran wrote an article published in Bloomberg Law, where she discussed the role that the IRS and tax laws play in the fight for racial justice.
The IRS lack of resources has created chaos for tax season, including slow refunds, lack of personnel, and lack of adequate technology. President Biden has proposed giving the Internal Revenue Service extra $80 billion over the next 10 years to help crack down on individuals and institutions who fail to pay taxes to help raise $400 billion in tax revenue. That additional revenue is expected to go towards assisting families and workers and helping us meet our climate goals.
The additional tax revenue would also be critical to the administration’s major racial justice goals. One of the components of the executive order on advancing racial equity is for the federal government to allocate resources to address the historic failure to invest sufficiently and equally in underserved communities. Investing in the IRS can yield this result.
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The goal is for the IRS to collect the data and make it public. Once the IRS collects and makes race, ethnicity, and donor information public, this allows watchdog organizations like Candid, which already collect annual 990s, to gather that information on an annual basis and make it easily accessible on their websites as a source for anyone that wants to donate to a minority nonprofit.
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The IRS already has broad authority to collect information deemed necessary for the administration of the tax code and for good governance and management for tax-exempt organizations. Racial justice is part of good governance for any nonprofit organization.