Getting a jump on 2012 taxes

[Krlilies]

<p>Who is most likely to cheat?
Sole proprietors in the rich suburbs of Los Angeles, San Francisco, Houston, Atlanta, and Washington, DC.

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.</p>

<p>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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Each tax return is assigned a score. The higher your score, the more likely you are to get audited because, according to the IRS, the more likely you are cheating on your taxes. The score is called the Discriminant Inventory Function, or DIF. A high DIF score does not guarantee you are a tax cheat but the IRS claims it’s reliable. </p>

<p>DIF scores can vary across industry… For example, people who owned construction and real estate rental companies were more likely to have high scores. Lawyers, accountants and architects and people who provided other professional services were more likely to have low scores.

“Areas with high concentrations of small business owners who were very unlikely to cheat on their taxes” were the Aleutian Islands in Alaska, West Somerville, Mass., Portersville, Ind., and the Bronx neighborhood Mott Haven in NY.
[AP</a> Exclusive: Likely Tax Cheats Flock South, West - TheStreet](<a href=“http://www.thestreet.com/story/11895003/1/ap-exclusive-likely-tax-cheats-flock-south-west.html]AP”>http://www.thestreet.com/story/11895003/1/ap-exclusive-likely-tax-cheats-flock-south-west.html)</p>