For six years, Californians have been the most favored recipients of IRS audits, according to IRS statistics. Although audit rates have dropped nationwide over the last few years, California residents have not experienced the slow down. Los Angeles County is recognized as the most audited location in the nation.
The IRS insists that it does not single out residents of California, and instead points out that a large number of high incomes, self employment and cash-based businesses trigger audits, and California seems to have the needed mix.
Listed below are other trends found in data collected by Syracuse University's Transactional Records Access Clearinghouse.
- High income taxpayers in Los Angeles are audited three times more frequently than the national average.
- Residents of California with incomes under $25,000 were audited in person at twice the national rate.
- Tax evasion and "willful failure to file" prompted most criminal filings in Los Angeles.
IRS's Most-Audited Districts
- Los Angeles County
- North Central Midwest (Minnesota, North Dakota, South Dakota)
- Southern California
- Northern California
- Manhattan (New York City)
- Central California
IRS's Least-Audited Districts
- New Jersey
- Virginia/West Virginia