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Over the past six months, ProPublica has detailed the myriad ways the IRS has been gutted and how that has impacted its ability to do its job. In sum: The wealthy escape scrutiny while the working poor, an easier target, are audited at high rates.

This week, Congress, in two separate hearings, confronted IRS Commissioner Charles Rettig with the findings.

“How can the Congress stand by a tax-enforcement system that punishes working people and gives the wealthy a green light to cheat?” asked Sen. Ron Wyden, D-Ore., ranking member of the Senate Finance Committee, during his opening statement on Wednesday.

Wyden was referring to a ProPublica investigation last week into the fate of the elite unit the IRS formed to keep up with the complicated tax-avoidance schemes of the wealthy. Faced with staff cuts and blowback from the wealthy and their tax representatives, the effort fumbled and was scaled way back.

Wyden demanded that Rettig produce a plan within 30 days on how his agency will change a system that is “stacked in favor of the wealthy” and “against the most vulnerable.” Rettig promised to do so.

One day earlier, at a hearing before the House Appropriations Committee, Rettig was also questioned about a map showing where in the country IRS audits are most concentrated. The top five most audited counties, ProPublica found, were rural, mostly African American ones in the Deep South. (On Wednesday, Wyden called the map “shameful.”)

Rep. Charlie Crist, D-Fla., displayed the map during the hearing and asked: “The map looks like the IRS is targeting black, Hispanic and Native American populations for audit. Is that the case?”

Rettig said that it wasn’t, adding that the IRS did not screen for race when selecting returns for audit.

But Crist said the findings amounted to “disparate impact,” the idea that even if unintentional, systems can produce “racial discrimination in practice.” He asked how the IRS would avoid “implicit or explicit” bias going forward.

Rettig didn’t have a clear answer. The IRS audited such a large number of low-income families because they claimed the earned income tax credit, he said. The EITC is one of the country’s largest anti-poverty programs. But the IRS estimates that of the more than $70 billion paid out last year through the program, $18 billion was claimed improperly, Rettig said. This made the program a priority for the IRS to audit, he said. As previous IRS commissioners have done, he blamed the complexity of the law as the main cause of those incorrect claims.

While that $18 billion figure sounds impressive, experts within and outside the IRS have argued that the agency’s estimate is far too high, largely because low-income taxpayers are much less likely to have competent representation to dispute the IRS’ conclusions.

The $18 billion is also just a pittance when compared with the vast universe of unpaid taxes. The IRS produces an estimate of what it calls the “tax gap,” which is how much tax is actually paid compared with what should have been paid. It’s been a few years since the last estimate, but assuming the rate of compliance has not changed (if anything, it’s gotten worse), the tax gap in 2018 would have been between $600 billion and $700 billion. At most, incorrect EITC payments account for around three percent of that.

By comparison, in 2017, the last year for which data is available, audits of EITC recipients accounted for 36 percent of all audits.

Since the 1990s, Republicans have put pressure on the IRS to address incorrect EITC payments, and Republican senators in Wednesday’s hearing continued that pressure.

“This is a big problem,” said Sen. Pat Toomey, of Pennsylvania, referring to improper EITC payments. “This is where the money is,” said Sen. Bill Cassidy, who represents one of the most heavily audited states, Louisiana.

Rettig expressed a willingness to work with Congress to address incorrect payments of the EITC, perhaps by simplifying the requirements. He notably did not suggest that the IRS might scale back the number of audits. As ProPublica reported last year, the IRS is understaffed, so people who are audited for claiming the credit and send in documents supporting their claim often must wait a year to find out if their proof is accepted.

When it comes to auditing the wealthy, Rettig did say that one of his “focal points” was “to get the audit rates up for the more wealthy taxpayers.”

“I’m an enforcement person,” he assured lawmakers on Tuesday after they expressed concern about how far the audit rate has fallen. “I’m an enforcement-minded person. … Personally, I have both eyes focused on enforcement.”

ProPublica is a Pulitzer Prize-winning investigative newsroom. Sign up for The Big Story newsletter to receive stories like this one in your inbox.

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Eric Holder

The failure of major federal voting rights legislation in the Senate has left civil rights advocates saying they are determined to keep fighting—including by suing in battleground states. But the little bipartisan consensus that exists on election reform would, at best, lead to much narrower legislation that is unlikely to address state-level GOP efforts now targeting Democratic blocs.

“This is the loss of a battle, but it is not necessarily the loss of a war, and this war will go on,” Eric Holder, the former U.S. attorney general and Democrat, told MSNBC, saying that he and the Democratic Party will be suing in states where state constitutions protect voting rights. “This fight for voting rights and voter protection and for our democracy will continue.”

“The stakes are too important to give up now,” said Damon Hewitt, president and executive director of the Lawyers’ Committee for Civil Rights Under Law, which for years has operated an Election Day hotline to help people vote. “Our country cannot claim to be free while allowing states to legislate away that freedom at will.”

In recent weeks, as it became clear that the Senate was not going to change its rules to allow the Freedom to Vote Act and the John Lewis Voting Rights Advancement Act to pass with a simple majority, there have been efforts by some lawmakers, election policy experts, and civil rights advocates to identify what election reforms could pass the Senate.

“There are several areas… where I think there could be bipartisan consensus,” said David Becker, executive director of the Center for Election Innovation and Research, in a briefing on January 20. “These areas are all around those guardrails of democracy. They are all about ensuring that however the voters speak that their voice is heard… and cannot be subverted by anyone in the post-election process.”

Becker cited updating the 1887 Electoral Count Act, which addressed the process where state-based slates of presidential electors are accepted by Congress. (In recent weeks, new evidence has surfaced showing that Donald Trump’s supporters tried to present Congress with forged certificates as part of an effort to disrupt ratifying the results on January 6, 2021.) Updating that law could also include clarifying which state officials have final authority in elections and setting out clear timetables for challenging election results in federal court after Election Day.

Five centrist Washington-based think tanks issued a report on January 20, Prioritizing Achievable Federal Election Reform, which suggested federal legislation could codify practices now used by nearly three-quarters of the states. Those include requiring voters to present ID, offering at least a week of early voting, allowing all voters to request a mailed-out ballot, and allowing states to start processing returned absentee ballots a week before Election Day.

But the report, which heavily drew on a task force of 29 state and local election officials from 20 states convened by Washington’s Bipartisan Policy Center, was notable in what it did not include, such as restoring the major enforcement section of the Voting Rights Act of 1965, which was removed by the U.S. Supreme Court in 2013. It did not mention the Electoral Count Act nor growing threats to election officials from Trump supporters.

“This won’t satisfy all supporters of the Freedom to Vote Act, but this is a plausible & serious package of reforms to make elections more accessible and secure that could attract bipartisan support,” tweeted Charles Stewart III, a political scientist and director of the MIT Election Data and Science Lab. “A good starting point.”

The reason the centrist recommendations won’t satisfy civil rights advocates is that many of the most troubling developments since the 2020 election would likely remain.

Targeting Battleground States

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Former president Donald Trump

By Rami Ayyub and Alexandra Ulmer

(Reuters) -The prosecutor for Georgia's biggest county on Thursday requested a special grand jury with subpoena power to aid her investigation into then-President Donald Trump's efforts to influence the U.S. state's 2020 election results.

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