Boston, Minneapolis, Miami among most audited cities in the US

Samuel Stebbins

24/7 Wall Street

Published 1:51 PM EDT Sep 15, 2019

Using data on tax returns and audits compiled by tax analysis website Tax Notes, 24/7 Wall St. reviewed audit rates in 382 metropolitan areas to identify the most audited city in each state. It is important to note that four states – Delaware, New Hampshire, Rhode Island and Vermont – have only one metro area, and as a result, the city listed is the most audited by default. 

Many might assume that wealthier Americans are more likely to be audited than low-income Americans. After all, higher incomes mean greater revenue for the IRS and perhaps higher potential of errors on 1040 forms. The opposite, however, appears to be true. Poverty is more common in 37 of the 50 cities on this list than it is across the respective state as a whole. In many of the cities on this list, poverty is a bigger problem than it is anywhere else in the state.

This is no coincidence. Many low-income households claim the earned income tax credit, or EITC, a program designed to ease financial hardship for the working poor. According to a 2018 report released by ProPublica, a nonprofit investigative publication, EITC recipients are disproportionately targeted for audit to better ensure no one is unfairly taking advantage of the system. Further reinforcing evidence of the trend, only 13 cities on this list have a higher median annual household income than the median nationwide of $57,652. 

1. Alabama: Mobile

• Audits per 1,000 tax returns: 8.69 (state: 8.20)

• Median household income: $45,802 (state: $46,472)

• Poverty rate: 19.3% (state: 18.0%)

• Adults with a bachelor’s degree: 23.0% (state: 24.5%)

2. Alaska: Anchorage

• Audits per 1,000 tax returns: 6.99 (state: 7.02)

• Median household income: $80,724 (state: $76,114)

• Poverty rate: 8.5% (state: 10.2%)

• Adults with a bachelor’s degree: 31.0% (state: 29.0%)

3. Arizona: Yuma

• Audits per 1,000 tax returns: 9.25 (state: 7.87)

• Median household income: $43,253 (state: $53,510)

• Poverty rate: 19.7% (state: 17.0%)

• Adults with a bachelor’s degree: 14.3% (state: 28.4%)

4. Arkansas: Pine Bluff

• Audits per 1,000 tax returns: 8.75 (state: 8.16)

• Median household income: $38,547 (state: $43,813)

• Poverty rate: 23.4% (state: 18.1%)

• Adults with a bachelor’s degree: 15.4% (state: 22.0%)

5. California: El Centro

• Audits per 1,000 tax returns: 9.71 (state: 7.96)

• Median household income: $44,779 (state: $67,169)

• Poverty rate: 23.8% (state: 15.1%)

• Adults with a bachelor’s degree: 14.3% (state: 32.6%)

6. Colorado: Pueblo

• Audits per 1,000 tax returns: 7.76 (state: 7.36)

• Median household income: $42,386 (state: $65,458)

• Poverty rate: 19.8% (state: 11.5%)

• Adults with a bachelor’s degree: 21.7% (state: 39.4%)

7. Connecticut: Bridgeport-Stamford-Norwalk

• Audits per 1,000 tax returns: 8.17 (state: 7.39)

• Median household income: $89,773 (state: $73,781)

• Poverty rate: 8.8% (state: 10.1%)

• Adults with a bachelor’s degree: 46.5% (state: 38.4%)

8. Delaware: Dover

• Audits per 1,000 tax returns: 7.37 (state: 7.31)

• Median household income: $57,647 (state: $63,036)

• Poverty rate: 13.0% (state: 12.1%)

• Adults with a bachelor’s degree: 23.5% (state: 31.0%)

9. Florida: Miami-Fort Lauderdale-West Palm Beach

• Audits per 1,000 tax returns: 8.74 (state: 8.21)

• Median household income: $51,758 (state: $50,883)

• Poverty rate: 16.1% (state: 15.5%)

• Adults with a bachelor’s degree: 30.6% (state: 28.5%)

10. Georgia: Albany

• Audits per 1,000 tax returns: 9.39 (state: 8.40)

• Median household income: $40,612 (state: $52,977)

• Poverty rate: 25.7% (state: 16.9%)

• Adults with a bachelor’s degree: 19.5% (state: 29.9%)

11. Hawaii: Kahului-Wailuku-Lahaina

• Audits per 1,000 tax returns: 7.60 (state: 7.39)

• Median household income: $72,743 (state: $74,923)

• Poverty rate: 10.0% (state: 10.3%)

• Adults with a bachelor’s degree: 26.3% (state: 32.0%)

12. Idaho: Idaho Falls

• Audits per 1,000 tax returns: 7.79 (state: 7.69)

• Median household income: $54,663 (state: $50,985)

• Poverty rate: 11.5% (state: 14.5%)

• Adults with a bachelor’s degree: 27.5% (state: 26.8%)

13. Illinois: Danville

• Audits per 1,000 tax returns: 7.67 (state: 7.49)

• Median household income: $44,930 (state: $61,229)

• Poverty rate: 19.8% (state: 13.5%)

• Adults with a bachelor’s degree: 14.6% (state: 33.4%)

14. Indiana: South Bend-Mishawaka

• Audits per 1,000 tax returns: 7.52 (state: 7.31)

• Median household income: $48,681 (state: $52,182)

• Poverty rate: 16.5% (state: 14.6%)

• Adults with a bachelor’s degree: 26.7% (state: 25.3%)

15. Iowa: Sioux City

• Audits per 1,000 tax returns: 7.35 (state: 7.03)

• Median household income: $54,474 (state: $56,570)

• Poverty rate: 12.9% (state: 12.0%)

• Adults with a bachelor’s degree: 21.7% (state: 27.7%)

16. Kansas: Wichita

• Audits per 1,000 tax returns: 7.33 (state: 7.30)

• Median household income: $53,953 (state: $55,477)

• Poverty rate: 13.9% (state: 12.8%)

• Adults with a bachelor’s degree: 30.0% (state: 32.3%)

17. Kentucky: Bowling Green

• Audits per 1,000 tax returns: 7.79 (state: 7.76)

• Median household income: $46,716 (state: $46,535)

• Poverty rate: 18.7% (state: 18.3%)

• Adults with a bachelor’s degree: 25.1% (state: 23.2%)

18. Louisiana: Monroe

• Audits per 1,000 tax returns: 8.92 (state: 8.39)

• Median household income: $39,904 (state: $46,710)

• Poverty rate: 24.2% (state: 19.6%)

• Adults with a bachelor’s degree: 22.8% (state: 23.4%)

19. Maine: Lewiston-Auburn

• Audits per 1,000 tax returns: 7.29 (state: 7.17)

• Median household income: $49,538 (state: $53,024)

• Poverty rate: 14.3% (state: 12.9%)

• Adults with a bachelor’s degree: 22.1% (state: 30.3%)

20. Maryland: Salisbury

• Audits per 1,000 tax returns: 7.54 (state: 7.36)

• Median household income: $56,283 (state: $78,916)

• Poverty rate: 13.3% (state: 9.7%)

• Adults with a bachelor’s degree: 25.8% (state: 39.0%)

21. Massachusetts: Boston-Cambridge-Newton

• Audits per 1,000 tax returns: 7.28 (state: 7.24)

• Median household income: $81,838 (state: $74,167)

• Poverty rate: 10.0% (state: 11.1%)

• Adults with a bachelor’s degree: 46.4% (state: 42.1%)

22. Michigan: Niles-Benton Harbor

• Audits per 1,000 tax returns: 7.73 (state: 7.40)

• Median household income: $47,132 (state: $52,668)

• Poverty rate: 17.2% (state: 15.6%)

• Adults with a bachelor’s degree: 26.7% (state: 28.1%)

23. Minnesota: Minneapolis-St. Paul-Bloomington

• Audits per 1,000 tax returns: 7.01 (state: 6.99)

• Median household income: $73,735 (state: $65,699)

• Poverty rate: 9.4% (state: 10.5%)

• Adults with a bachelor’s degree: 40.5% (state: 34.8%)

24. Mississippi: Jackson

• Audits per 1,000 tax returns: 8.76 (state: 8.86)

• Median household income: $49,381 (state: $42,009)

• Poverty rate: 18.5% (state: 21.5%)

• Adults with a bachelor’s degree: 29.7% (state: 21.3%)

25. Missouri: Joplin

• Audits per 1,000 tax returns: 7.93 (state: 7.57)

• Median household income: $45,913 (state: $51,542)

• Poverty rate: 15.9% (state: 14.6%)

• Adults with a bachelor’s degree: 21.6% (state: 28.2%)

26. Montana: Missoula

• Audits per 1,000 tax returns: 7.32 (state: 7.43)

• Median household income: $49,412 (state: $50,801)

• Poverty rate: 15.9% (state: 14.4%)

• Adults with a bachelor’s degree: 42.6% (state: 30.7%)

27. Nebraska: Grand Island

• Audits per 1,000 tax returns: 7.48 (state: 7.16)

• Median household income: $54,479 (state: $56,675)

• Poverty rate: 12.3% (state: 12.0%)

• Adults with a bachelor’s degree: 20.3% (state: 30.6%)

28. Nevada: Las Vegas-Henderson-Paradise

• Audits per 1,000 tax returns: 7.73 (state: 7.64)

• Median household income: $54,882 (state: $55,434)

• Poverty rate: 14.6% (state: 14.2%)

• Adults with a bachelor’s degree: 23.3% (state: 23.7%)

29. New Hampshire: Manchester-Nashua

• Audits per 1,000 tax returns: 6.91 (state: 6.91)

• Median household income: $75,777 (state: $71,305)

• Poverty rate: 8.6% (state: 8.1%)

• Adults with a bachelor’s degree: 36.5% (state: 36.0%)

30. New Jersey: Trenton

• Audits per 1,000 tax returns: 7.65 (state: 7.52)

• Median household income: $77,027 (state: $76,475)

• Poverty rate: 11.3% (state: 10.7%)

• Adults with a bachelor’s degree: 41.5% (state: 38.1%)

31. New Mexico: Las Cruces

• Audits per 1,000 tax returns: 8.66 (state: 8.13)

• Median household income: $39,114 (state: $46,718)

• Poverty rate: 27.9% (state: 20.6%)

• Adults with a bachelor’s degree: 27.4% (state: 26.9%)

32. New York: New York-Newark-Jersey City

• Audits per 1,000 tax returns: 7.97 (state: 7.82)

• Median household income: $72,205 (state: $62,765)

• Poverty rate: 13.8% (state: 15.1%)

• Adults with a bachelor’s degree: 38.7% (state: 35.3%)

33. North Carolina: Rocky Mount

• Audits per 1,000 tax returns: 8.63 (state: 7.87)

• Median household income: $41,593 (state: $50,320)

• Poverty rate: 19.1% (state: 16.1%)

• Adults with a bachelor’s degree: 17.2% (state: 29.9%)

34. North Dakota: Grand Forks

• Audits per 1,000 tax returns: 6.81 (state: 6.98)

• Median household income: $52,377 (state: $61,285)

• Poverty rate: 15.5% (state: 11.0%)

• Adults with a bachelor’s degree: 30.8% (state: 28.9%)

35. Ohio: Toledo

• Audits per 1,000 tax returns: 7.33 (state: 7.23)

• Median household income: $48,284 (state: $52,407)

• Poverty rate: 17.8% (state: 14.9%)

• Adults with a bachelor’s degree: 26.4% (state: 27.2%)

36. Oklahoma: Lawton

• Audits per 1,000 tax returns: 7.95 (state: 7.82)

• Median household income: $49,608 (state: $49,767)

• Poverty rate: 16.6% (state: 16.2%)

• Adults with a bachelor’s degree: 21.5% (state: 24.8%)

37. Oregon: Grants Pass

• Audits per 1,000 tax returns: 7.95 (state: 7.35)

• Median household income: $40,705 (state: $56,119)

• Poverty rate: 18.6% (state: 14.9%)

• Adults with a bachelor’s degree: 17.6% (state: 32.3%)

38. Pennsylvania: Philadelphia-Camden-Wilmington

• Audits per 1,000 tax returns: 7.51 (state: 7.19)

• Median household income: $66,285 (state: $56,951)

• Poverty rate: 13.1% (state: 13.1%)

• Adults with a bachelor’s degree: 36.2% (state: 30.1%)

39. Rhode Island: Providence-Warwick

• Audits per 1,000 tax returns: 7.16 (state: 7.26)

• Median household income: $61,536 (state: $61,043)

• Poverty rate: 13.0% (state: 13.4%)

• Adults with a bachelor’s degree: 31.0% (state: 33.0%)

40. South Carolina: Florence

• Audits per 1,000 tax returns: 8.71 (state: 8.02)

• Median household income: $40,888 (state: $48,781)

• Poverty rate: 20.6% (state: 16.6%)

• Adults with a bachelor’s degree: 21.0% (state: 27.0%)

41. South Dakota: Rapid City

• Audits per 1,000 tax returns: 7.27 (state: 7.34)

• Median household income: $52,683 (state: $54,126)

• Poverty rate: 13.0% (state: 13.9%)

• Adults with a bachelor’s degree: 28.3% (state: 27.8%)

42. Tennessee: Memphis

• Audits per 1,000 tax returns: 8.63 (state: 7.92)

• Median household income: $50,194 (state: $48,708)

• Poverty rate: 18.9% (state: 16.7%)

• Adults with a bachelor’s degree: 27.2% (state: 26.1%)

43. Texas: McAllen-Edinburg-Mission

• Audits per 1,000 tax returns: 9.86 (state: 8.13)

• Median household income: $37,097 (state: $57,051)

• Poverty rate: 31.8% (state: 16.0%)

• Adults with a bachelor’s degree: 17.8% (state: 28.7%)

44. Utah: St. George

• Audits per 1,000 tax returns: 7.69 (state: 7.24)

• Median household income: $55,175 (state: $65,325)

• Poverty rate: 14.2% (state: 11.0%)

• Adults with a bachelor’s degree: 28.1% (state: 32.5%)

45. Vermont: Burlington-South Burlington

• Audits per 1,000 tax returns: 6.81 (state: 7.10)

• Median household income: $65,476 (state: $57,808)

• Poverty rate: 10.4% (state: 11.4%)

• Adults with a bachelor’s degree: 43.4% (state: 36.8%)

46. Virginia: Virginia Beach-Norfolk-Newport News

• Audits per 1,000 tax returns: 7.53 (state: 7.55)

• Median household income: $61,889 (state: $68,766)

• Poverty rate: 12.2% (state: 11.2%)

• Adults with a bachelor’s degree: 30.8% (state: 37.6%)

47. Washington: Yakima

• Audits per 1,000 tax returns: 7.92 (state: 7.23)

• Median household income: $47,470 (state: $66,174)

• Poverty rate: 19.0% (state: 12.2%)

• Adults with a bachelor’s degree: 15.9% (state: 34.5%)

48. West Virginia: Beckley

• Audits per 1,000 tax returns: 7.63 (state: 7.44)

• Median household income: $41,141 (state: $44,061)

• Poverty rate: 18.5% (state: 17.8%)

• Adults with a bachelor’s degree: 17.1% (state: 19.9%)

49. Wisconsin: Milwaukee-Waukesha-West Allis

• Audits per 1,000 tax returns: 7.20 (state: 6.93)

• Median household income: $57,531 (state: $56,759)

• Poverty rate: 14.5% (state: 12.3%)

• Adults with a bachelor’s degree: 34.5% (state: 29.0%)

50. Wyoming: Casper

• Audits per 1,000 tax returns: 7.15 (state: 7.14)

• Median household income: $59,400 (state: $60,938)

• Poverty rate: 9.9% (state: 11.1%)

• Adults with a bachelor’s degree: 22.8% (state: 26.7%)

Methodology

To identify the city in each state where you are most likely to be audited, 24/7 Wall St. analyzed data on tax returns and audits, originally compiled by Tax Notes, on the metropolitan statistical area (MSA) level. Weighted averages for audit rates were calculated using American Community Survey (ACS) 2017 5-Year Estimates for population on a county level.

Median household income, poverty rates and educational attainment by MSA and state also came from the ACS.

24/7 Wall Street is a USA TODAY content partner offering financial news and commentary. Its content is produced independently of USA TODAY.

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