May 10, 2024

Warren Urges Sec. Yellen to Swiftly Implement Racial Equity Measures, Make Tax and Banking Policy Fairer for All Americans

The Treasury Department formed the Treasury Advisory Committee on Racial Equity following a 2021 Executive Order from President Biden, and has only implemented 1 of the Committee’s 40 recommendations. 

“These recommendations [from TACRE] would improve economic conditions for Black and Brown communities that face barriers to intergenerational financial security – and I urge you to implement them swiftly.”

Letter Text (PDF)

Washington, D.C. — U.S. Senator Elizabeth Warren (D-Mass.) sent a letter to U.S. Secretary of the Treasury Janet Yellen, urging her to swiftly implement recommendations from the Treasury Advisory Committee on Racial Equity (TACRE) that would advance racial equity in the U.S. economy and tackle economic disparities within communities of color. TACRE has made over 40 recommendations, and the letter follows a proposed rule that, if implemented, would adopt one: that the Internal Revenue Service (IRS) share tax data with Census to better track racial disparities in tax enforcement. However, the remaining recommendations have yet to be implemented, raising concerns about the progress of equity initiatives at the Department. 

“(TACRE has) proposed over 40 recommendations, ranging from reforms to the Internal Revenue Service’s (IRS’) auditing process to mechanisms for extending capital to economic institutions in communities of color,” said Senator Warren. “These recommendations would improve economic conditions for Black and Brown communities that face barriers to intergenerational financial security — and I urge you to implement them swiftly.” 

In March 2024, Treasury moved forward a proposed rule that would require the IRS to share tax data with Census to better track racial disparities in tax enforcement. Senator Warren reacted: “This much-needed proposal comes after reports that the IRS has, in the past, discriminately audited low-income Black taxpayers, and it would ensure that lawmakers can properly measure the improvements that the IRS is making to its audit selection program.” 

Despite progress on this recommendation, Treasury has yet to fully implement any of the Committee’s other recommendations, including those that would reform the IRS auditing process, create outreach tools to ensure low-income tax credits and green energy credits reach underserved communities, and more. 

“The implementation of these recommendations would build on the vital work that Treasury is pursuing to make our tax and banking system fairer for all Americans, and is necessary to meet the goals of the President’s executive order on racial equity. But I am concerned that the recommendations made by members of the TACRE remain in limbo at Treasury… It is critical that the Department act on this insight and advice,” concluded Senator Warren. 

Senator Warren has led the call for Treasury and the IRS to enforce the tax system fairly on all Americans: 

  • In April 2023, Senator Warren sent a letter to Internal Revenue Commissioner Daniel Werfel and Treasury Secretary Janet Yellen urging both to follow through on the commitments of the Biden Administration by examining and taking concrete steps to address racial inequities in tax benefits and enforcement.
  • In March 2023, Senator Warren and Angus King (I-Maine) led a letter with 19 other senators to Internal Revenue Service (IRS) Commissioner Daniel Werfel and Treasury Secretary Janet Yellen, expressing strong support for Secretary Yellen’s directive for the IRS not raise audit rates for small businesses or households making under $400,000 annually and that new enforcement funds provided in the Inflation Reduction Act will focus on reducing tax avoidance by large corporations and the mega-rich.
  • In April 2022, Senator Warren and Representative Judy Chu (D-Calif.) sent a letter to Secretary of the Treasury Janet Yellen and Internal Revenue Service (IRS) Commissioner Charles Rettig expressing concerns about higher IRS tax audit rates for low-income Americans and Commissioner Rettig’s response in a recent House hearing to new findings about these high audit rates.
  • In April 2021, at a hearing of the Senate Finance Committee, Senator Warren highlighted the importance of addressing racial inequities in the tax code.

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