Poor Mississippi Counties Are Top IRS Targets in Hunt for Tax Cheats

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A new study of IRS practices reveals a tale of two Mississippi counties, with one of the poorest in the state earning the top spot as the most audited in the country, while the second-wealthiest is Mississippi's least audited.

Like all counties in the list, Humphreys County, which lands at No. 1, is a rural and mostly African American county in the Deep South. The other four counties are (in order): Tunica County, Miss.; East Carroll Parish, La.; Coahoma County, Miss.; and Noxubee County, Miss. Tax Notes published this list in a report on Monday.

By comparison, Rankin County has a median household income of more than double that of Humphreys, and is one of the whitest counties in the state—but it is the least audited one. White residents account for 81 percent of its population, while just 17 percent is black—significantly lower than the statewide population, which is 37 percent African American.

The disparity, highlighted in a report published in ProPublica, results from the agency's heavy focus on scrutinizing recipients of earned income tax credit, or EITC, an anti-poverty program that provides refunds to families who work but still have difficulty making ends meet.

Since 2011, budget cuts to the IRS have caused audit rates to fall across the board. For families making between $200,000 and $5 million, they have fallen more than 70 percent, while audit rates for those making $5-$10 million have fallen 57 percent. For EITC recipients, who on average make less than $20,000 a year, though, audit rates have fallen the least, dropping just 36 percent.

A ProPublica analysis in December found that the average EITC recipient is more likely to face an audit than someone making 20 times as much. The report attributes the relentless focus on tax-credit recipients to "consistent pressure from Republicans in Congress" to curtail overpayments

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