IRS Audit Statistics: Rates and Chances of Receiving a Tax Audit

IRS Audit Statistics: Rates and Chances of Receiving a Tax Audit

audit statisticsThe chance of receiving an audit generally changes based upon income level and filing type. Below are IRS statistics that are broken down by individual, income level, and business type. These are the overall numbers provided by the IRS, but realize that there are many factors that go into determining if the IRS is going to audit. IRS audits are rarely random and can be avoided by understanding how the IRS audit process works and what the common red flags are for an audit.


Total Amount of IRS Audits on Individual Tax Returns

 
FY 2009
FY 2010
FY 2011
Total Returns Filed Prior CY
138,949,670
142,823,105
140,837,499
Total Audits Conducted
1,425,888
1,581,394
1,564,690
Percentage Audited
1.03%
1.11%
1.11%

 

IRS Audit Rates by Income Level for Individuals (2009)

 
Percentage of Total Returns Filed
Percentage of Returns Audited
No adjusted gross income
2.13%
2.15%
$1 - $24,999
40.51%
0.90%
$25,000-$49,999
24.31%
0.72%
$50,000-$74,999
13.44%
0.69%
$75,000-$99,999
7.99%
0.69%
$100,000-$199,999
8.69%
0.98%
$200,000-$499,999
2.25%
1.92%
$500,000-$999,999
0.43%
2.98%
$1,000,000-$4,999,999
0.23%
4.02%
$5,000,000-$9,999,999
0.02%
6.47%
$10,000,000+
0.01%
9.77%

 

IRS Audit Rates/Statistics by Tax Filing Type FY 2011

 
Returns Filed (Prior Calendar Year)
Returns Audited
Percentage Audited
Small Corporation
1,931,008
19,697
1.02%
Large Corporation
59,291
10,459
17.64%
Subchapter S
4,444,154
18,519
0.42%
Partnership
3,434,905
13,770
0.40%
Individual
140,837,499
1,564,690
1.11%


Overall the odds that you are going to get picked for an audit is low each year. Generally speaking, the IRS does audit individuals with higher income because they only have limited resources to go after people and they get more bang for their buck going after the higher income individuals. Higher income individuals are also more likely to have things on their tax returns that create IRS red flags than individuals with lower income. Considering the fact that you file a tax return each year and have about a 1% chance each year, it is more likely than not that you will get audited at some point in your life.