Tax audit chances greater in L.A., Atlanta, D.C., etc.
Worried the Internal Revenue Service might target you for
an audit? You probably should be if you own a small business in one of the
wealthy suburbs of Los Angeles.
You might also be wary if you're a small-business owner
in one of dozens of communities near San Francisco, Houston, Atlanta or the
District of Columbia.
A new study by the National Taxpayer Advocate used
confidential IRS data to show large clusters of potential tax cheats in these
five metropolitan areas. The IRS uses the information to target taxpayers for
audits.
The taxpayer advocate, Nina Olsen, runs an independent
office within the IRS. She got access to the data as part of an effort to learn
more about why some taxpayers are more likely to cheat than others.
The study also looked at tax compliance in different industries,
and found that people who own construction companies or real estate rental
firms may be more likely to fudge their taxes than business owners in other
fields.
Many of the communities identified by the study are very
wealthy, including Beverly Hills and Newport Beach in California. Others are
more middle class, such as New Carrollton, Md., a Washington suburb, and
College Park, Ga., home to a section of Atlanta's massive airport.
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