The prospect of being audited by the IRS makes most people feel pretty nervous. Even if you feel you properly pay all your taxes and have nothing to hide, the process can be intimidating.
In the midst of tax season, you may be wondering about the likelihood that you could get audited. As it turns out, where you live in the country can be a big factor in determining your chances to be amongst those taxpayers selected by the IRS for an audit.
ProPublica, a nonprofit news organization whose mission is to expose abuses of power and betrayals of the public trust by government, business and other institutions, analyzed the results of a study originally published in the industry journal Tax Notes, which shows that residents in certain U.S.counties were audited at a disproportionate rate compared to that of the nation as a whole.
Kim M. Bloomquist, who authored the study, served as a senior economist with the IRS’s research division for 20 years. His research shows that more than a third of all audits conducted by the IRS are of recipients of the Earned Income Tax Credit, or EITC, which is intended to reduce the tax burden for low-income workers.
“The the number of audits in each county is largely a reflection of how many taxpayers there claimed the credit, he found,” wrote Paul Kiel and Hannah Fresques, the authors of ProPublica’s report on the study.
Here is the map created by Bloomquist that shows the counties where residents were audited at a higher rate than that of the nation as a whole:
According to the study, the most heavily audited county in all of the United States is Humphreys County, Mississipi, a rural area in the Missippi Delta known for its catfish farms. Residents in Humphreys County have a median household income of just $26,000, and more than a third are living below the poverty line.
“The five counties with the highest audit rates are all predominantly African American, rural counties in the Deep South,” wrote the ProPublica authors. “The audit rate is also very high in South Texas’ largely Hispanic counties and in counties with Native American reservations, such as in South Dakota. Primarily poor, white counties, such as those in eastern Kentucky in Appalachia, also have elevated audit rates.”
In contrast, the states that get audited the least are comprised of mostly middle-income and predominantly white populations, according to ProPublica’s analysis.
For their part, the IRS says neither geography nor race nor income have an influence on who gets audited.
“Fairness and integrity are built into the foundation of our return selection process for audits, which is designed to select returns with the highest likelihood of noncompliance,” the government agency said in an email statement.
“Audit inventory selection uses systemic risk-based scoring criteria,” they went on to say. “The audit selection process applies the same business rules, filters and scoring to all returns to identify potentially non-compliant taxpayers. The selection criteria does not include any components or factors related to the geographic location or ethnicity of the taxpayers.”