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The Honorable Janet Yellen

Secretary of the Treasury

October 31, 2023

The Treasury Advisory Committee on Race Equity (TACRE) is grateful for the opportunity to 

participate in the Biden Administration’s historic whole-of-government racial equity effort. The 

Committee is pleased and proud to submit this report of recommendations to the Treasury 

Department on ways to advance that agenda. 

President Biden formed this Committee in the fall of 2022 as one component of a broad and 

coordinated federal effort to root out the entrenched disparities that have historically locked out 

millions of families of color from full economic participation and inhibited our collective growth. 

The Committee, composed of twenty-four policymakers and practitioners from a range of 

backgrounds and industries, chose to embark on its work to further that mission by organizing 

into four Subcommittees: on Financial Health and Access to Capital, on Inflation Reduction Act 

(IRA) Implementation, on Internal Staffing and Culture, and on Research and Data Equity. 

Over the last several months, these Subcommittees have been hard at work designing, 

deliberating on, and formalizing a slate of recommendations to advance a comprehensive racial 

equity agenda within the Treasury Department and its operations. On September 19, 2023, the 

full Committee came together in Washington DC, as it does each quarter, to discuss and vote to 

approve this slate of recommendations. 

These recommendations—and the thoughtful and substantive discussions that precipitated 

them—make great strides toward solving the economic and social challenges of our time 

equitably. Racial equity is essential to building a strong and sustainable economy and society. 

We can only create greater financial security for families across generations and a greater 

shared prosperity for us all when we repair past racial harms and equitably invest in our 

collective future. Achieving that vision requires a systematic, affirmative approach to embedding 

fairness in decision-making processes, executive departments, and agencies. 

In an Executive Order on race equity that preceded this Committee, President Biden wrote, “Our 

Nation deserves an ambitious whole-of-government equity agenda that matches the scale of the 

opportunities and challenges that we face.” The work of this Committee, including the below 

slate of recommendations to the Department, advances that vision. We look forward to 

continuing that vital work in the year ahead. 

Mayor Michael Nutter, Chair

Felicia Wong, Vice Chair

Members of the Treasury Advisory Committee on Race Equity
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Recommendations from the Treasury Advisory Committee on Racial Equity

Approved September 19, 2023

The Subcommittee on Financial Health and Access to Capital offers the following 

recommendations to support the Treasury Department in ensuring that individuals from all 

backgrounds, including those with language and other barriers, are able to access capital and 

financial inclusion programs, and to identify ways to strengthen BIPOC led community 

institutions (including CDFIs, MDIs, other recipients), with a proven focus and track record of 

reach, trust, and impact in underserved target markets: 

● In order to provide timely recommendations to the Treasury Department, particularly with 

respect to ongoing changes to CDFI certification requirements, the Committee 

recommends that Treasury adopt the following:

○ Require, as part of the CDFI certification update, at least 60 percent or more of 

capital deployed to be invested in BIPOC clients and communities (beyond the 

60 percent low-moderate income threshold)

○ Attention, measurement, and accountability should be directed to equitable 

deployment of capital across various demographic groups in the service area

○ CDFI certification and recertification should be granted with consideration and 

accountability to geographical areas that are inclusive of BIPOC communities, 

disaggregated by specific racial and ethnic characterization, and

○ Include AANHPI within target markets per the President’s racial equity executive 

order and AANHPI whole of government strategy.

The Subcommittee on Financial Health and Access to Capital offers the following 

recommendations on ways to improve demographic disaggregated data collection and analysis 

practices to provide increased transparency, and stronger baseline evidence to support 

inclusive policy making and program implementation; and allow a range of community-serving 

institutions to work with Treasury on the improved design and delivery of capital access 

programs and services: 

● Require demographic and race disaggregated data collection, analysis, and reporting 

across financial inclusion and capital access programs at Treasury and improve access 

to, and leverage of, private partnerships and capital markets. With this improved 

collection, the impact of capital access programs can be more easily measured in order 

to ensure that they are reaching the most intended consumers and small business 

owners in low-income and communities of color . It will also increase transparency, allow 

community institutions to work with Treasury to improve the design and delivery of 

capital access programs and services going forward, and allow smaller and mid -size 
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institutions, which don’t currently have acces s to the private capital markets, to bundle 

portfolios in ways that could improve their liquidity and financial positions. 

● In order to bolster robus t secondary markets for CDFI-originated as sets, the Treasury 

Department should support programs that provide credit enhancement or risk capital to 

securities backed by CDFI- or MDI-originated loans. For instance, the Treasury 

Department could create “qualified is suance” standards that, if met, would provide 

access to a government guarantee. In addition, Treasury could create definitions for 

transaction-level loan terms that the industry can coalesce around, and include those 

definitions in any federal programs that collect transaction-level data. These moves 

could make the practice of collecting transaction-level data more common to allow the 

industry to s tart building asset-by-asset datasets , reduce the complexity and 

administrative burden of loan-level guarantees that already exist, and dramatically drive 

down the cost of capital—savings that would be passed along to consumers of the 

community finance products and services.

● In order to provide greater clarity into the CDFI Fund, and related access to capital and 

financial health programs at Treas ury, the Treasury Department should releas e data and 

statistics that include information about the institutions (size, type, location) more or 

les s likely to apply for—and receive—CDFI certification; the ways CDFI-certified 

institutions deploy their capital, specifically the race and demographic disaggregated 

transaction level records from all CDFI certified institutions; and, for CDFI institutions , 

information about the ways that project beneficiaries and project locations vary and why, 

including information about application and application success rates disaggregated by 

geographic location and types of institution.

● Request an annual report from the CDFI Fund and other access to capital programs. The 

report should as ses s the extent to which the programs and certification are being 

deployed so as to improve racial equity in financial acces s across the country.

● Treasury should make federal inves tments in market-tailored technology solutions, 

similar to how the Department of Energy invests in scaling new technologies that 

support the clean energy transition or the Defense Advanced Research Projects Agency 

(DARPA) invests in new technologies to support America’s military. This would be gamechanging. This public, non-dilutive s ource of funds—with a requirement to offer products 

and s olutions back to the sector—would vastly accelerate the creation and adoption of 

technology across the industry.

***

The Inflation Reduction Act (IRA) Subcommittee offers the following recommendations to 

promote equitable access to the tax system and ensure that modernization efforts positively 

impact low-income taxpayers in the near term; specifically, by ensuring that the 2024 Direct File 

pilot is assessed on and is successful on equity terms, so it can expand in future years:
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● The Treasury Department should rigorously define what success means–as working well 

for those who need it most–for the 2024 Direct File pilot, in ways that are achievable, 

and defined with an eye toward equity, reaching those populations who need Direct File 

most. “Working well” should be defined defined collaboratively with the Direct File team, 

which is more familiar with technical details of the product; possible criteria could include 

a completion rate of at least 30 percent among taxpayers who start the process,1 and at 

least 50 percent of taxpayers who use Direct File complete the entire return in a single 

sitting, in under an hour. “Those who need it most” should be defined as households 

below the poverty line, or households with irregular filing histories (taxpayers who did not 

file in one or more of the last three years). The Treasury Department should further 

define success for the Direct File pilot as providing a service that is equitable across 

demographic and socioeconomic strata; that is, key user experience outcomes (e.g., 

completion rates, completion times) are equivalent across axes of interest of 

demographic and socioeconomic variation (e.g. racial and ethnic groups, native vs nonnative English speakers, income range).

● The Treasury Department should make all program decisions in light of the success 

metrics described above, ruthlessly prioritizing accessibility and access. This includes: 

○ Paying particular attention to any barriers that disproportionately impact the 

target populations, and Direct File must ruthlessly remove barriers that are likely 

to block target populations from using the tool, including, e.g., overly rigorous 

identity verification.

○ Ensuring that the 2024 Direct File scope generally meets the needs of the target 

populations. While not all taxpayers will be in scope for 2024, the scope should 

disproportionately serve the taxpayers who need Direct File most—including the 

types of income they have and the types of credits they claim.

○ Tracking outcomes and making dynamic adjustments throughout 2024. The 

Direct File team should assess the success metrics dynamically throughout the 

pilot season, and make real-time adjustments. For example, if a particular page 

in the tool or aspect of the process is causing large numbers of target taxpayers 

to drop off, the team must quickly identify and address the barrier. This should 

include regularly scheduled reporting back to the Subcommittee.

○ As needed, using sub-pilots to experimentally assess the impact of removing 

particular barriers. If there are particular processes that may or may not be 

barriers, or onerous requirements that are mandatory at scale in the short term 

for compliance reasons, the Direct File team may consider establishing smaller 

1 “Start” should be defined as an action that shows an intention of going on to file. The standard is 

relatively low because of well-established comparison-shopping behavior by taxpayers.
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sub-pilots within the 2024 pilot that rigorously and experimentally measure the 

impact of removing the particular barrier.

The Inflation Reduction Act Subcommittee offers the following recommendations to center 

equity considerations in the implementation of the IRA’s green credits and tax provisions, 

including through proactively protecting communities and consumers from predatory activities 

and actors: 

● The Treasury Department should ensure that non-profits, community-based 

organizations, state/local/tribal governments, and small businesses can take full and fair 

advantage of IRA green provisions by periodically publishing information about how 

much of each active tax credit’s allotment remains available and the expected timelines 

for allocation, with clear details by location. This will help nonprofits, community basedorganizations, and other small businesses that do not have dedicated legal and 

compliance teams to accurately assess and take advantage of their respective credit 

application opportunities.

● The Treasury Department should ensure that labor requirements, practices, and 

standards for green provision claimants are strong and promote equity across 

demographics, by requiring robust tracking and oversight with relation to labor standards 

from developers and other project sponsors, including data pertaining to the stated hiring 

goals, hiring and local hiring plans, and demographic details of resulting hires of the 

IRA’s commercial credit beneficiaries. In addition, the Treasury Department should 

require entities receiving green commercial credits to coordinate with qualified preapprenticeship programs, in addition to apprenticeship programs, in order to strengthen 

existing labor standards and help workers forge pathways to permanent professional 

opportunities in trade and construction industries.

● The Treasury Department should protect communities and consumers from predatory 

activities and actors by: 

○ Requiring corporations, developers, and project sponsors subsidized by IRA 

investment and production credits to provide plain language disclosure forms to 

consumers that clearly explain the subsidy received and the product being sold. 

These forms can be modeled on credit card statements, and should be designed 

in consultation with the Consumer Financial Protection Bureau (CFPB) and/or 

other regulatory agencies.

○ Requiring corporations, developers, and project sponsors to report information 

necessary to assess equity impact of credits—including but not limited to 

information about the project’s impact to community energy resiliency; the 

quantity and quality of clean energy jobs generated; and demographic data on 

race, ethnicity, income, and geographic location
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○ Building consumer protections into market-based provisions, including the 

transferability provisions, to ensure low-income taxpayers, and democraticallycontrolled entities do not feel undue pressure to enter transactions that do not 

provide them with a reasonable value of the tax credits. 

○ Creating a joint task force with CFPB and/or other regulatory agencies to intake 

IRA-specific complaints and investigate fraud, operable for the entire length of 

the IRA funding period, and determining clawback authority, in consultation with 

the CFPB and other regulatory agencies, should fraudulent or nefarious behavior 

be determined.

The Inflation Reduction Act Subcommittee offers the following recommendations to ensure that 

outreach strategies for low-income tax credits and green credits reach populations who have 

historically been left behind:

● The Treasury Department should hire and empower a high-quality outreach team with a 

clear mandate to reach target populations—for both green credits and low-income 

worker/family credits. The outreach team should identify clear and measurable goals for 

what constitutes an equitable distribution of IRA benefits, and should drive an outreach 

and engagement strategy that builds backwards from concrete coverage targets. Metrics 

should prioritize beneficiaries that are from (in the case of individual credits) or serving in 

(in the case of commercial credits) low-income and historically marginalized 

communities. The Department should measure and report on the racial and 

demographic focus of various outreach activities to ensure outreach efforts are 

equitable; and make dynamic adjustments as needed to ensure equity.

● The Treasury Department, through its outreach team, must have regular and ongoing 

engagement with affected communities, as well as with a range of organizations and 

leaders that are led by and operate in communities of color. More broadly, Treasury 

should consider co-creating outreach and engagement strategies in concert with 

community organizers who are engaging in outreach strategies to ensure that Americans 

know and understand the Inflation Reduction Act and what it means for them. Treasury 

and IRS should require lived experience in marginalized and underserved communities 

as a key consideration in assembling the federal outreach team.

. 

● The Treasury Department should leverage existing government entities in a governmentwide outreach push—especially for low-income worker/family credits. Based on 

successful pilots during the pandemic,2 the IRS should continue to communicate directly 

with households who have not filed, based on its robust non-filer data. This should 

include direct mail with clear and simple calls to action; and pilot programs regarding the 

possibility of the IRS communicating directly via text message or other mediums. In 

addition, IRS should leverage interagency coordination with federal agencies that have 

2 For public data on the possible impact of these pilots, see GetCTC Report 2021, p. 61.
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been expanding their outreach, including the Small Business Administration, Commerce, 

Energy, EPA, and Education. Consider leveraging existing federal resources in 

communities, such as Post Offices. In addition, based on the success of CTC and 

stimulus outreach via state benefits agencies, Treasury and/or IRS should run a 

comprehensive program to engage state agencies and support them in doing robust tax 

benefits outreach to their beneficiaries.

● The Treasury Department should ensure outreach messaging and strategy is inclusive—

for both green credits and low-income worker/family credits. This requires designing 

outreach methods and materials—especially for green credits and Direct file—that 

center and authentically engage historically marginalized communities across income, 

race, and geographic location as well as civic organizations representing those 

constituencies; and co-create these methods and materials in concert with community 

power building organizations and organizers. The Department should target specific at 

risk populations, by creating materials and strategies that explicitly include populations, 

like low-income people who do not file taxes, who my not know or believe that they are 

intended beneficiaries of relevant programs, to reassure this population that they can 

and should file. In addition, the Department should create multilingual outreach 

materials, including at least the seven languages other than English prioritized by the 

IRS, as well as multi-format materials for differently-abled populations.

● The Treasury Department should pay particular attention to developing an outreach 

strategy to enable renters to take maximum advantage of the benefits available under 

the Inflation Reduction Act. This is particularly important given the racist history of 

redlining and ongoing housing market discrimination, which has led to a persistent and 

growing 30-point gap between Black and white homeownership rates. Expressly 

attending to renters is necessary to help mitigate the potential for property owners to 

overwhelmingly benefit from green credits in ways that exacerbate this persistent racial 

inequity.

● The Treasury Department should engage organizations that have built trust in 

communities of color and other historically underrepresented communities, as partners 

in outreach design and implementation—for both green credits and low-income 

worker/family credits.(engaging community organizations with trust in communities of 

color). This should include the following: 

○ Community based power building organizations. Example organizations include 

Color of Change, Working Families Party, Faith in Action, Center for Popular 

Democracy, Community Change.

○ BIPOC industry organizations that represent and promote BIPOC business 

leaders, and have access to a large network of such leaders across the country. 

Example organizations include the National Association of Black Accountants 

(NABA), Real Estate Executive Council, National Black MBA Association 
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(NBMBAA), National Urban League, U.S. Black Chamber of Commerce, U.S. 

Hispanic Chamber of Commerce, Asian American Chamber of Commerce, 

National Minority Supplier Development Council, National Black Nurses 

Association.

○ Culturally significant media outlets that speak to current issues in the Black 

community and have large followings. Examples include the ReidOut, The 

Breakfast Club, local radio stations.

○ Historically Black Colleges and Universities.

○ Fraternal and sororal organizations. Example organizations include Delta Sigma 

Theta, Alpha Kappa Alpha, Zeta Phi Beta, Omega Psi Phi, Kappa Alpha Psi, Phi 

Beta Sigma

○ BIPOC climate groups. Example organizations include the Chisholm Legacy 

Project, Black Owners of Solar Services.

○ Utility companies, which have detailed data on where LMI customers live

○ Alaska Native tribes, tribal nonprofits, and Native corporations, including 

organizations that enhance and advance the voice of the Alaska Native 

community, and have an unmatched network of tribal, tribal non-profit, and 

Native corporation leaders across Alaska. Example organizations include Alaska 

Federation of Natives (AFN), ANCSA Regional Association (ARA), Alaska Native 

Village Corporation Association (ANVCA), and the Alaska Tribal Administrators 

Association (ATAA).

○ Elected officials of color and their representative organizations, especially 

including elected officials of color at the local/municipal level.

The Inflation Reduction Act Subcommittee offers the following recommendations to facilitate a 

strong and enduring focus on equity-linked outcomes and outcomes for low-income populations, 

helping policymakers dynamically adjust program choices, and helping advocates identify 

important new areas of work, by providing regular, comprehensive, and publicly-available 

reports on critical outcomes of relevance to an equitable implementation of the IRA:

● The Treasury Department should prepare and publish an annual public report to 

Congress and other stakeholders on key coverage outcomes of relevance to an 

equitable implementation of the IRA. This should include the publication of reliable and 

robust coverage rates of key family and worker credits (including EITC and CTC), and 

characteristics of the uncovered populations.3 Coverage should be reported along key 

3 Further details available in Code for America’s proposal for Annual Report on Refundable Credits.
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axes of heterogeneity, including households with and without children, households in 

phase-in, plateau, and phase-out income ranges of the credit, households who did 

versus did not file a return, and households who are versus are not required to file. 

Published data should be adjusted for the issue of children who are claimed by the 

“wrong” household, which could account for a majority of the reported EITC participation 

gap.4 Published data should draw on data from IRS (including information returns), 

Census, and SSA (Numident).

● In addition, the Treasury Department should publish characteristics of the recipients of 

green credits, including demographic characteristics of the communities commercial 

recipients operate in, relative to the estimated universe of eligible claimants.

● The Treasury Department should publish robust data on IRS processing times for 

returns and other key processes (e.g., identity verification processes, or resolutions of 

duplicate dependent claims). In all data, the Department should examine and report 

heterogeneities by income band; race and ethnicity (using imputed data based on 

names and zip codes, as needed); and English proficiency (using imputed data and/or 

evidence from Schedule LEP filings).

● Finally, the Treasury Department should publish additional real-time reporting, as 

feasible. Real-time data publications are necessarily more limited, especially due to the 

risk of compromising taxpayer privacy with small-batch updates to aggregate data. Still, 

Treasury and IRS should seek to release headline statistics where possible, so as to 

help build momentum and drive outreach campaigns.

***

The Subcommittee on Internal Hiring and Culture offers the following recommendations to 

promote procurement systems, processes, and practices that afford a substantial return on 

investment for taxpayers and business owners over and above the material requirements of the 

product or service being procured, including opportunities for supply chain diversity, job 

creation, and opportunities to reduce the racial wealth gap:

● The Treasury Department should ensure that procurement systems, policies, and 

practices create a level playing field for small businesses and businesses owned by 

people of color and women, by: 

○ Collecting relevant, reliable, disaggregated data on outcomes of the agency’s 

procurement practices and compare outcomes for small businesses and 

businesses owned by people of color based on availability in the marketplace. 

Treasury can test the efficacy of the Office of Minority and Women Initiatives 

(OMWI) prototype approach to procurement equity analysis to compare 

4 See Code for America’s proposal for Annual Report on Refundable Credits, page 4.
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designated underrepresented business groups to the relevant government 

contracting market. This data collection and analysis level will better ensure that 

the internal procurement practices are narrowly tailored to address disparities 

around race, ethnicity, and gender, as required by the Supreme Court for race 

and gender-conscious procurement practices. This practice also maximizes 

Treasury's ability to respond to the governmental responsibility for socioeconomic and geographic distributional equity in the delivery of the benefits of 

government spending. Moreover, a procurement equity analysis not only 

addresses barriers of intentional and unintentional discrimination in a legally 

defensible manner, but also provides an opportunity for Treasury to ensure the 

overarching value proposition of supply chain diversity, competitiveness, and job 

creation.

○ Providing interpretation and translation of materials, resources, and services to 

those with limited English proficiency (LEP) at the same level of services 

received by individuals who are not LEP.

○ Auditing a representative sample of procurement practices to determine and 

correct the impact of network exclusion on small businesses and businesses 

owned by people of color. Audit findings should identify if race-blind procurement 

practices result in unintended barriers for all businesses including businesses 

owned by people of color, women, and non-minority businesses. A level playing 

field must be a non-zero-sum game, and must ensure that all businesses, 

regardless of the race, ethnicity, or gender of the business owner, have the ability 

to compete in a fair procurement process.

○ Investigating the unintended impact of cumbersome compliance practices and 

identifying opportunities to simplify and streamline the compliance requirements 

for these businesses. This can include unbundling projects and offering 

procurement opportunities that are right-sized for the available small businesses, 

and creating a more streamlined onboarding process and compliance tools. The 

procurement systems and processes for the Treasury should not impose undue 

burdens on small businesses and businesses owned by people of color. 

Compliance with federal regulations is an important part of government 

contracting. Streamlining these practices through electronic tools and accessible 

specialized training (e.g., webinars, etc.) is much needed to support participation 

by small and diverse businesses with Treasury Department contracting 

opportunities.

● The Treasury Department should invest in new and leverage inter-agency resources for 

capacity building for small businesses and businesses owned by people of color to 

compete for opportunities to do business with the Department of Treasury by:
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○ Building out a comprehensive approach for capacity building that leverages the 

resources of the Office of Minority and Women Inclusion (OMWI) of the Federal 

Reserve, the Office of Small and Disadvantaged Business Utilization (OSDBU) of 

the Treasury, Small Business Administration (SBA), and the Minority Business 

Development Agency (MBDA) is recommended as a wrap-around capacity 

building approach for Treasury. A wrap-around approach that leverages the 

existing federal resources can be utilized to build the capacity of small and 

emerging businesses, providing the training and technical assistance that is 

available within the federal network. Treasury can catalog these resources and 

make them available through their outreach and education efforts, particularly for 

new market entrants.

○ Maximizing the agency’s Mentor/Protégé program, successfully deployed in the 

Treasury Bank by OMWI and the Bureau of Fiscal Services (BFS), as a 

mechanism for capacity building for small and diverse businesses and also for 

breaking down the barriers of exclusionary networks. This model, in which the 

protégé firm gets training, technical assistance, and business counseling from a 

prime contractor or large business that is already providing services to the 

government agency, offer the opportunity for new small and diverse businesses 

entering the federal contracting space to connect directly, or through their 

mentor, with procurement and contracting officers to demonstrate their capacity 

to deliver quality products and services and to build the network relationships 

needed that will ultimately enable these firms to compete as prime contractors on 

large projects.

*** 

The Subcommittee on Research and Data Equity offers the following recommendation to ensure 

that all IRS programs operate in a manner that is free from bias and promotes racial equity, and 

that IRS publishes statistics such that it is transparent to the public whether this is the case: 

● The Internal Revenue Service should revise Form 990 to request information on how, in 

the aggregate, board members of tax-exempt organizations self-identify by race and 

ethnicity in line with the Race of Principal Owners, Ethnicity of Principal Owners, and 

Middle Eastern or North African ancestry of Principal Owners, requirements under the 

State Small Business Credit Initiative. IRS has reported that, in 2019, nearly 300,000 

tax-exempt organizations file under Section 501(c); these organizations manage more 

than $5.5 trillion of assets and spend more than $2 trillion annually (with the majority on 

program services). Unfortunately, the IRS lacks any data on racial disparities in the 

management of tax-exempt entities, making impossible the necessary transparency. 

Such information would enable the IRS to produce statistics that would increase 

transparency of the regulation of the tax-exempt sector. Researchers could also use 

such data to understand better how the tax-exempt sector serves communities and 

supports racial equity, at both the federal and state level.