Low-income people got tax audited 5 times more!

In US, a recent analysis by Syracuse University people making $25K less got tax audited 5 times more. Main reason is that they claimed Earned Income Tax Credit (EITC) which was expanded via the pandemic relief bill. It was said that there are errors in claiming too much credits.

Still, that seems very outrageous especially when how rich people tax evasion was in the news quite often. Trump and his wife paid almost no tax.  Is this the best use of government resources? Also, the low-income people have much less resource and time to deal with the audit. Making less than $25K basically put someone under poverty. Perhaps solution is just to simplify the tax and welfare system.

In Canada, here is some insights from an article by Global New in 2017. It seems it mainly targets self-employed people because it is more complicated than employees.

I was audited once for my tax quite 8 or 9 years ago. It was about my claiming for public transit monthly pass as an expense. Among the 12 monthly pass, I missed one because I misplaced it. CRA asked me to pay around $35 more in tax. God! I felt that this was truly waste of the government resource!

Published by Worthfy

Financial literacy and counselling

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