According to a recent analysis of IRS records, audits are more likely to occur in poor, rural communities, especially in the South. This occurs because the IRS return selection process is designed to select returns with the highest likelihood of noncompliance, and this often involves the Earned Income Tax Credit (EITC), which is sometimes claimed in error in these areas.
Counties in the state of Mississippi win the prize for the most-often-audited returns. Wisconsin’s Calumet County ranks third out of ten U.S. counties with the lowest IRS audit rate. Washington County ranks fourth lowest.
Due to IRS spending cuts, audit rates for millionaires have declined by half since 2010, the report states. Corporate audits are also on the wane.