2022 Explanatory Reporting, Medium Newsroom winner

The Secret IRS Files

About the Project

One extraordinary day, ProPublica received a vast trove of data that disclosed the income taxes paid by thousands of the nation’s wealthiest citizens over more than 15 years. It was the biggest leak of tax information in U.S. history, and we immediately assembled a group of reporters to explore its significance. As the team pored over the reams of numbers, it had a shocking realization. The titans of America’s New Gilded Age had paid a stunningly small amount of taxes. In some years, billionaires like George Soros, Jeff Bezos, Michael Bloomberg and Elon Musk owed not a single dollar in income tax to the U.S. Treasury.

Tax experts and scholars have long understood that the ultrarich don’t pay their fair share of taxes; the disparity is clear in the aggregate data released by the IRS. But the data provided by our anonymous source (or sources) brought to light a pattern that was fully understood only by the ultrarich and their advisers. These billionaires weren’t cheating. They were avoiding the burdens borne by nearly every other wage-earning American using completely legal strategies far beyond the reach of ordinary wage earners.

The trove offered an extraordinary opportunity to trace the century-long battle between lawmakers trying to create a modern state and the titans who had the means to shape the tax code to their advantage. The goal of this series was to use the individual examples of tax avoidance in our data to reveal that larger story.

Almost immediately after acquiring this data, we knew that visual explanations would be critical to our storytelling. The challenge would be to convey unimaginable amounts of wealth, extreme contrasts in scale, and complicated maneuvers by the ultra wealthy.

One of the primary challenges we faced in our series was explaining the scale of this wealth. Our minds are just not equipped to imagine millions, let alone billions, of dollars. But there is a long tradition of graphics – particularly in the science realm – to make extreme differences more relatable. We took inspiration from the classic Charles and Ray Eames “Powers of Ten” video, which zooms out from a lakeside picnic to the outermost galaxies to describe the effect of adding another zero. Our visual reporters flew a drone over a local basketball court and combined it with satellite imagery of the entire New York metro area to demonstrate the difference between one dollar bill and the billions owned by the richest person in the United States: Jeff Bezos.

In our stories, we aimed to put the trove in the largest possible context. That meant moving away from the traditional metric, which focuses on percent of income, or tax “rate” that people pay. Buffett once famously acknowledged that his tax rate was lower than his secretary’s. The data we obtained told a more powerful story, showing that the ultrawealthy could live lavishly without receiving salaries or other income the IRS deems taxable.

Judges Comments

This piece was impactful both in terms of what was reported and the background of how it came together. ProPublica did a great job of studying pages upon pages of tax documents and made them digestible for readers. The use of visuals, including satellite and drone imaging, further enhanced the story. The judges marveled at how ProPublica was able to distill thousands of pages of IRS documents to show how billionaires were paying nothing in federal income tax.