Utah Ranks Tenth With a Risk Score of 74.7 as 71,850 Gig Workers Paid No Self-Employment Tax
- Jonathan H. Westover, PhD
- 1 hour ago
- 5 min read
KEY HIGHLIGHTS
Utah ranks tenth in the nation with an Under-Reporting Risk Score of 74.7 out of 100, placing it among the most heavily flagged states for IRS enforcement exposure.
71,850 Utah Schedule C filers, representing 27.2% of all in-state gig income reporters, filed self-employment income but paid no self-employment tax.
Utah's QBI deduction claimant rate of 94.1% is the highest of any state in the national top 15 index, indicating near-universal use of income-reduction strategies among the state's Schedule C filers.
Utah's presence in the national top 10 is driven less by an extreme filing-to-tax gap and more by a combination of below-average reported income and the highest QBI deduction take-up rate of any flagged state in the country. With a Risk Score of 74.7 out of 100, Utah ranks tenth nationally, sitting just 0.2 points behind ninth-ranked South Carolina and 3.0 points ahead of eleventh-ranked Arkansas. Its 27.2% filing-to-tax gap and $9,615 average reported income, the fifth lowest of all flagged states, produce a composite risk profile that places Utah firmly within the enforcement priority tier.
According to the analysis by J David Tax Law, which examined IRS Statistics of Income (SOI) Historic Table 2 data for Tax Year 2022, the most recent year with state-level Schedule C and self-employment tax breakdowns available. The study analyzed Schedule C filing counts, reported self-employment income, and self-employment tax payments across all 50 states to build a composite Under-reporting Risk Score (/100) based on two equally weighted factors: average reported income per filer (Income Score, out of 50) and the gap between Schedule C filers and those who actually paid self-employment tax (Gap Score, out of 50).
Utah Ranks Tenth: Top 15 States by Under-Reporting Risk Score
Rank | State | Schedule C Filers | Avg. SE Income Reported | Filing-to-Tax Gap (%) | Risk Score (/100) |
1 | Georgia | 1,290,760 | $6,092 | 39.3% | 100.0 |
2 | Louisiana | 467,650 | $7,427 | 35.9% | 92.1 |
3 | Mississippi | 274,390 | $7,163 | 35.0% | 91.5 |
4 | Florida | 2,781,160 | $10,207 | 33.8% | 83.0 |
5 | Alabama | 427,270 | $9,522 | 32.4% | 82.4 |
6 | Texas | 3,287,340 | $10,537 | 33.3% | 81.5 |
7 | Nevada | 290,350 | $11,660 | 32.6% | 78.0 |
8 | Maryland | 688,190 | $11,034 | 31.4% | 77.6 |
9 | South Carolina | 470,000 | $11,219 | 29.8% | 74.9 |
10 | Utah | 264,100 | $9,615 | 27.2% | 74.7 |
11 | Arkansas | 243,530 | $9,868 | 25.6% | 71.7 |
12 | Oklahoma | 317,810 | $10,616 | 25.7% | 70.3 |
13 | North Carolina | 960,070 | $12,619 | 26.9% | 67.6 |
14 | Michigan | 801,590 | $12,694 | 26.6% | 67.1 |
15 | Virginia | 783,950 | $13,163 | 27.0% | 66.6 |
Utah's risk score of 74.7 places it tenth nationally, just 0.2 points behind South Carolina and well above the 15th-ranked state Virginia at 66.6. Among the top 15 flagged states, Utah records the fifth lowest average reported income at $9,615, lower than both Nevada and Maryland which rank above it, and its 94.1% QBI claimant rate is the highest in the entire index. This combination of low reported income, a material non-payment rate, and almost universal deduction usage makes Utah one of the structurally most distinctive compliance cases in the top 15.
Looking at the study, Jonathan Sooriash, CEO at J David Tax Law, commented:
"The filing-to-tax gap is one of the clearest indicators the IRS uses to identify enforcement priorities. Gig workers who report income on Schedule C but pay no self-employment tax are placing themselves at significant audit risk, particularly as the IRS expands data-matching capabilities. Compliance is not optional; it is the most effective protection against penalties, interest, and extended scrutiny."
Utah vs. Neighboring States: How the Filing-to-Tax Gap Compares
Utah's filing-to-tax gap of 27.2% sits in the middle of its immediate neighbors' range. Nevada, which borders Utah to the west and ranks seventh nationally, carries a higher gap of 32.6%, a full 5.4 points above Utah's. Arizona trails Utah by 2.8 percentage points and Idaho by 4.9 points, while Wyoming records the lowest gap in the group at 21.8%. Notably, Utah's average reported SE income of $9,615 is the lowest of any of its neighboring states by more than $3,000, reinforcing that Utah's compliance risk stems primarily from its income profile rather than from an unusually high non-payment rate.
Regional Disparity: Utah Leads the West in Composite Risk
Region | No. of States | Avg. Risk Score (/100) | Avg. Filing-to-Tax Gap (%) | Highest-Risk State | That State's Score |
South | 16 | 74.7 | 29.7% | Georgia | 100.0 |
West | 13 | 58.8 | 24.2% | Nevada | 78.0 |
Midwest | 12 | 51.4 | 17.5% | Michigan | 67.1 |
Northeast | 9 | 40.9 | 20.2% | Maine | 52.0 |
The West carries an average risk score of 58.8, the second highest of any U.S. region. Utah's score of 74.7 sits 15.9 points above the regional average, making it the West's highest-ranked state in the national index alongside Nevada. Utah's filing-to-tax gap of 27.2% also exceeds the West's implied regional benchmark and is closely aligned with the South's regional average of 29.7%, placing Utah's compliance profile in the same tier as states that anchor the nation's most at-risk region.
Inside Utah: A Breakdown of the State's Schedule C Filing Population
Metric | Count / Value | Share of Schedule C Filers |
Total Schedule C Filers | 264,100 | 100.0% |
Filers Who Paid Self-Employment Tax | 192,250 | 72.8% |
Filers Who Did Not Pay Self-Employment Tax | 71,850 | 27.2% |
QBI Deduction Claimants | 248,420 | 94.1% |
Average SE Income per Filer | $9,615 | N/A |
Total Reported SE Income | $2,539,361,000 | N/A |
Total SE Tax Collected | $569,425,000 | N/A |
Of Utah's 264,100 Schedule C filers, 71,850 reported self-employment income but paid no self-employment tax, a 27.2% non-payment rate that is the tenth highest in the nation. The remaining 192,250 filers paid self-employment tax, generating $569.4 million in SE tax revenue on $2.54 billion in reported income. Utah's defining statistical feature is its QBI deduction claimant count of 248,420, representing 94.1% of all Schedule C filers. This figure means that almost every Schedule C filer in Utah also claimed the QBI deduction, far exceeding any other state in the top 15 and pointing to systematic use of deductions as a defining feature of Utah's gig compliance landscape.
Methodology
Data Source: IRS Statistics of Income (SOI) Historic Table 2, Tax Year 2022, the latest year with state-level Schedule C and self-employment tax breakdowns. (TY 2023 national data was released via Publication 1304 in December 2025, but state-level Historic Table 2 has not been updated beyond TY 2022.)
Scope: Schedule C filing counts and total self-employment income (net of business expenses) across all 50 states and the District of Columbia.
Average SE Income: Total Schedule C income divided by the number of Schedule C filers per state.
Filing-to-Tax Gap: (Schedule C Filers minus SE Tax Payers) divided by Schedule C Filers. Captures filers who reported SE income but owed no SE tax due to losses, deductions, or income below the threshold.
Risk Score (/100): Two equally weighted components:
Income Score (/50): lower average reported income scores higher
Gap Score (/50): larger filing-to-tax gap scores higher
Enforcement Exposure: Top 15 states by composite score were flagged.
● Population Data: U.S. Census Bureau 2024 annual estimates. All IRS monetary values were converted from thousands to per-filer dollar amounts where noted.
Data Sources:
IRS Statistics of Income (SOI), Historic Table 2: https://www.irs.gov/statistics/soi-tax-stats-historic-table-2
IRS Gig Economy Tax Center: https://www.irs.gov/businesses/small-businesses-self-employed/gig-economy-tax-center
U.S. Census Bureau, Annual Estimates of the Resident Population for the United States: https://www.census.gov/data/tables/time-series/demo/popest/2020s-state-total.html
Research Dataset: https://docs.google.com/spreadsheets/d/1e-qzOPXFLxQmgyz7RUzc_nnzsPSAbOsflpOLHdN1zSE/edit?gid=0#gid=0
Research By: https://www.jdavidtaxlaw.com/
J David Tax Law is a nationwide tax law firm that helps individuals and businesses navigate IRS disputes, tax debt resolution, tax litigation, audits, and corporate tax planning, delivering strategic legal solutions for complex tax challenges.
