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Top 10 states for IRS tax audits

On Behalf of | Apr 12, 2016 | Tax Audits

Georgia residents may be happy to know that they do not live in one of the top 10 states for federal tax audits. According to a study by, taxpayers who live in Vermont are more likely to be audited by the Internal Revenue Service than people in other states. The second-worst state for federal tax audits is California followed by Nevada, Massachusetts, Delaware, Colorado, New York, New Jersey, Florida and New Hampshire.

The list was compiled by analyzing data from 1.5 million taxpayers who had used an audit defense service after their 2014 federal tax returns were audited. Though it is unclear why taxpayers in certain states face more audits, analysts have made some educated guesses as to the reason. One factor that appears to play a role in the high number of IRS audits is income. Four out of the 10 states with high audit numbers are in the country’s top 20 percent for household income, and eight are in the country’s top 50 percent for household income.

Generally speaking, the more money people make the more likely they are to face a tax audit. In 2014, over 16 percent of taxpayers with annual income over $10 million were audited by the IRS. The IRS may audit high earners more often than lower earners as a way to generate more revenue.

The IRS may audit anyone, even people who do not earn millions of dollars each year. Those who have received notification from the IRS that they are being audited may want to have representation from a tax law attorney in order to try to reach a settlement for the tax dispute.