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Where in the U.S. Are You Most Likely to Be Audited by the IRS? – ProPublica

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Where in the U.S. Are You Most Likely to Be Audited by the IRS? – ProPublica

Humphreys County, Mississippi, seems like an odd place for the IRS to go hunting for tax cheats. It’s a rural county in the Mississippi Delta known for its catfish farms, and more than a third of its mostly African American residents are below the poverty line. But according to a new study, it is the most heavily audited county in America. Where the IRS Audits More Income tax filings in these counties were audited at a higher rate than the nation as a whole.

As we reported last year, the IRS audits EITC recipients at higher rates than all but the richest Americans, a response to pressure from congressional Republicans to root out incorrect payments of the credit. The study estimates that Humphreys, with a median annual household income of just $26,000, is audited at a rate 51 percent higher than Loudoun County, Virginia, which boasts a median income of $130,000, the highest in the country. Kim M. Bloomquist, the author of the study, which was first published in the industry journal Tax Notes, served as a senior economist with the IRS’ research division for two decades. He decided to map the distribution of audits to illustrate the dramatic regional effects of the IRS’ emphasis on EITC audits. Because more than a third of all audits are of EITC recipients, the number of audits in each county is largely a reflection of how many taxpayers there claimed the credit, he found.

To Cut Taxes, Big-Box Stores Use ‘Dark Store Theory’

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To Cut Taxes, Big-Box Stores Use ‘Dark Store Theory’

"Big-box defenders argue that the “sales approach” (what someone recently paid for a similar property) is the best way to determine a building’s value. And in many states, including Wisconsin, sales are supposed to be the first variable in the valuation equation, whenever possible. Therefore, retailers’ lawyers say, a Sam’s Club valued at $11 million is overvalued, because its neighbors are selling for a third of that amount. In a real estate market that’s oversaturated with retail closures, bankruptcies, and vacancies galore, they insist, no one wants a big box store anymore. If you just look at the sales prices, they are often not wrong."

"But assessors say that this misses what gives a functional property its value. Location is everything in real estate—there may be a good reasons why some of those stores went dark. Besides, the market for big boxes is too small to rely solely on sales; construction costs and property incomes also have to be taken into account. And many of these vacant and depreciated properties would need major repairs to achieve a state of “highest and best use,” which would be a more appropriate comparison for an open and fully updated store."

"Besides, there’s something plainly illogical about the argument. “Do you want me to value your house as if it’s closed and boarded up?” said Krause. So, case closed? Not quite. The vast majority of dark store appeals brought by big boxes—many of which ask for write-downs of 50 percent—are being settled for a lower valuation, probably in the ballpark of 85 percent, Thomas Hamilton, a professor of real estate at Roosevelt University, told me. Many assessors strive to be conservative in their estimates, so they usually try to find a happy medium when taxpayers protest. Plus, it’s costly to litigate."