NYC Taxpayers Get Audited More Than Most Of The State

NEW YORK — Taxpayers in four New York City boroughs face a higher likelihood of a dreaded federal tax audit than much of the rest of the state, a new report shows.

The Internal Revenue Service has audited taxpayers in Manhattan, Brooklyn, Queens and The Bronx more frequently than the national rate of 7.7 audits per 1,000 tax filings, according to an interactive map published by ProPublica.

Only two more of New York State's 62 counties have audit rates higher than the nation as a whole, the map shows: The Hudson Valley suburbs of Rockland and Westchester counties.

An estimated 9.1 of every 1,000 tax returns in The Bronx got audited, the highest rate in the city, according to ProPublica. Manhattan had the next-highest rate of 8.9 audits per 1,000 returns, followed by Brooklyn with 8.5 and Queens with eight.

Taxpayers in Westchester County, just north of the city, saw 8.2 audits for every 1,000 returns, while Rockland County had an audit rate of 7.9, the map shows.

Staten Island is the only New York City borough to see fewer audits than the nationwide rate. Some 7.3 of every 1,000 returns in Richmond County gets audited, according to the map. That's on par with Long Island's Suffolk County and just below Nassau County, which has a rate of 7.7.

ProPublica's map is based on a recent study authored by Kim Bloomquist, who served as senior economist with the IRS’ research division for two decades. That study was published first in Tax Notes.

The map shows a stark geographic divide in who gets audited and who doesn’t. By and large, the IRS audits counties in the South at a much higher rate than those in the North. That’s especially true in rural Humphreys County in Mississippi. The county has just an estimated 8,342 residents — 76 percent of whom are black — and sees 11.8 audits per 1,000 residents.

It’s no accident the IRS targets the county, the authors wrote. Last year, Pro Publica reported that the IRS audits recipients of the Earned Income Tax Credit at higher rates than all but the very wealthiest. The EITC helps working people with low or moderate income by reducing the amount of tax they owe. Some people even get a refund.

“In a baffling twist of logic, the intense IRS focus on Humphreys County is actually because so many of its taxpayers are poor,” the authors wrote. “More than half of the county’s taxpayers claim the earned income tax credit, a program designed to help boost low-income workers out of poverty.”

Robert Marvin, a spokesman for the IRS, told Patch in a statement Tuesday that the agency plays “a critical role” in providing financial help to low-income households. Each year, more than 9 million adults and kids are lifted above the poverty level as a result of the EITC.

To ensure the process remains fair for all taxpayers, the IRS targets returns that have the “highest likelihood of noncompliance,” he said. Audits are doled out using a scoring system based on risk. The selection process applies the same business rules, filters and scoring to every return 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,” Marvin said.

The IRS regularly reinforces its expectations about fairness and integrity when creating or changing the process for selecting returns for audit, he said and all agency workers are informed of the “fair and equitable treatment of taxpayers under the law.”

The audit rates were estimated by combining audit coverage rates in the yearly IRS Data Book with county tax return data. The rates are based on the years 2012 to 2015.

The study comes as many Americans brace for smaller-than-expected refund checks following the passage of the Tax Cuts and Jobs Act. Those concerns may prove to be overblown, though.

On March 22, the latest cumulative IRS statistics showed the average refund was $2,915, just $10 less than the same period in 2018. The total number of refunds, meanwhile, dropped 2.6 percent.

Patch national staffer Dan Hampton contributed to this report.