The USC Annenberg School for Communication and Journalism announced Monday that ProPublica won the 2022 Selden Ring Award for Investigative Reporting for “The Secret IRS Files.” The series analyzed a massive trove of secret IRS data, revealing a series of systemic inequities that allow America’s wealthiest citizens to pay little or nothing in federal taxes. Jesse Eisinger, Paul Kiel, Jeff Ernsthausen, Justin Elliott, James Bandler, Patricia Callahan, Robert Faturechi, Ken Ward Jr., Ellis Simani, Doris Burke, Agnes Chang, Lucas Waldron, Almudena Toral, Nadia Sussman, Mauricio Rodríguez Pons, Joseph Singer, Sherene Strausberg, Maya Eliahou, Chris Morran and Kristyn Hume contributed to the series.
“The Secret IRS Files” is the culmination of years of ProPublica’s reporting on American tax enforcement (or lack thereof). An anonymous source entrusted the newsroom with a vast trove of data — disclosing the income taxes paid by thousands of the nation’s wealthiest citizens over more than 15 years — thanks in part to an earlier series called “Gutting the IRS,” which had revealed how the IRS, understaffed and with a slashed budget, focused its auditing work on the poor while wealthy tax cheats evaded enforcement. The new data represented by far the biggest leak of confidential tax information in U.S. history.
Poring over the reams of numbers, the team realized that the ultrawealthy had paid a stunningly small amount of taxes as they amassed fortunes worth billions of dollars. In “The Secret IRS Files: Trove of Never-Before-Seen Records Reveal How the Wealthiest Avoid Income Tax,” they showed that, in some years, such business leaders as George Soros, Jeff Bezos, Michael Bloomberg, Carl Icahn and Elon Musk owed not a single dollar in income tax to the U.S. Treasury. But these billionaires weren’t cheating on their taxes. They were avoiding the burdens borne by nearly every other wage-earning American, using completely legal strategies that are far beyond the reach of ordinary wage earners.
The trove offered an opportunity to trace the battle between lawmakers trying to create a modern state and titans who had the means to shape the tax code to their advantage. The goal of “The Secret IRS Files” was to use the individual examples of tax avoidance found in the data to trace that larger story.
“Lord of the Roths: How Tech Mogul Peter Thiel Turned a Retirement Account for the Middle Class Into a $5 Billion Tax-Free Piggy Bank” showed how not only Thiel but other moguls, including Warren Buffett, exploit Roth IRAs. The reporting extended far beyond the data trove, with some mysteries of Thiel’s strategies uncovered from obscure foreign filings. Another story plunged deep into the process of lobbying and legislating to show how Sen. Ron Johnson of Wisconsin drafted a section of the Trump tax bill that saved $1 billion in taxes for just 82 households, two of which were his biggest campaign donors.
The data showed that the ultrawealthy also found ways to avoid paying taxes on the income they did report. Some enjoyed streaks of a decade or more in which their write-offs were so large, they paid no federal income taxes at all even while raking in hundreds of millions of dollars in income. Many of these taxpayers owned commercial real estate or energy companies, industries advantaged under the tax code; others turned their hobbies, such as racing thoroughbreds, into gargantuan tax deductions. One story delved into the circumstances that let a billionaire turn what was possibly the worst oil spill in U.S. history into a personal tax bonanza.
ProPublica’s stories ignited a worldwide debate about wealth and inequality, dominating policy circles, prompting other media outlets to question Elon Musk and his peers and even becoming a staple in comedy routines. At one point, the Biden administration’s stalled Build Back Better legislation would have closed the IRA loophole and included a wealth tax (an idea that was doomed by the opposition of Sen. Joe Manchin of West Virginia).
Learn more about the Selden Ring Award here.