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Founded by a former IRS Agent

The IRS Targets California and Colorado Residents for Audits

April 17, 2015

The IRS Targets California and Colorado Residents for Audits

Ever wonder which citizens are most likely to be audited just because they live in a particular state? You’re about to find out.

new study suggests, the IRS targets residents of California and Colorado more than any other state. Neither California or Colorado, however, are among the top states to be audited at the state level. This is according to a study done for the 2013 tax year, which analyzed nearly 1.5 million tax returns nationwide.

It is believed that California residents are targeted simply because they’re home to the most IRS branch offices of any state. One might think the IRS would go easy on them for their hospitality right? Wrong. They are simply easy lunch. It is believed that Colorado residents are targeted because of their high rate of second-home rentals, which leaves more room for error since those returns are more complex. Here are the top five states to be audited by the IRS:

  • California
  • Colorado
  • Nevada
  • Vermont
  • Missouri

Just because residents of some states are more likely to be audited than others, doesn’t mean everyone else can sleep easy. Anyone can be audited for any number of reasons, even if you believe you’ve done everything right. Receiving and audit notification can be scary, stressful, and frustrating, but there is help. Vardan Pogosian provides IRS audit representation services for people who want to get through the audit process the smoothest way possible. Aside from the IRS, here are the top five states that audit their residents:

  • New York
  • Massachusetts
  • Alabama
  • Delaware
  • Michigan

To lower your individual chances of being audited, don’t try to cut any corners or take advantage of credits or deductions you know you don’t qualify for. It is also important to report all of your income. One of the best ways to limit mistakes is to stay organized. Keep track of receipts, bank statements, income statements, and other supporting documentation. It is recommended to hold on to your supporting documentation for at least 18 months after you file your return.

If you live in one of the high risk states and you’re completely stressed out, move to North Dakota. North Dakota residents are the least targeted for audits by either the IRS or state. If that’s not enough to ease your mind, there is more good news:

  • Individual tax audits fell to 0.86 percent in 2014, the lowest rate in nine years
  • Individual tax audits have dropped an estimated 162,000 from 2013
  • Individual tax audits have dropped an estimated 339,000 from 2010

The decline is partly due to budget cuts, but it is good news nonetheless.

Vardan Pogosian is a CPA in Glendale, California who provides IRS tax audit representation. If you receive a letter from the IRS, please contact our office for a free one hour consultation with Glendale’s best CPA, Vardan Pogosian.

It’s time to schedule an appointment with Pogosian Nazaryan & Company.