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

audit statisticsThe chance of receiving an audit generally changes based on 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 many factors 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 typical red flags are for an IRS audit or examination.


Total Amount of IRS Audits on Individual Tax Returns

FY 2014
FY 2015 FY 2016
FY 2017
Total Returns Filed Prior CY 145,236,429 146,861,217 147,964,324 149,919,416
Total Audits Conducted 1,242,479 1,228,117 1,034,955 933,785
Percentage Audited 0.85% 0.84% 0.7%  0.6%


IRS Audit Rates by Income Level for Individuals (2017)

Percentage of Total Returns Filed in Year 2016
Percentage of Returns Audited
No adjusted gross income
1.69%
2.55%
$1 – $24,999
36.47%
0.71%
$25,000-$49,999
23.33%
0.49%
$50,000-$74,999
13.26%
0.48%
$75,000-$99,999
8.59%
0.45%
$100,000-$199,999
12.19%
0.47%
$200,000-$499,999
3.60%
0.70%
$500,000-$999,999
0.58%
1.56%
$1,000,000-$4,999,999
0.26%
3.52%
$5,000,000-$9,999,999
0.02%
7.95%
$10,000,000+
0.01%
14.52%

 

IRS Audit Rates/Statistics by Tax Filing Type FY 2017

Returns Filed (Prior Calendar Year)
Returns Audited
Percentage Audited
Small Corporation 1,771,641 12,157
0.7%
Large Corporation 77,709 6,109
7.9%
S Corporation 4,808,833
15,869
0.3%
Partnership
3,862,691
13,448
0.3%
Individual 149,919,416 933,785
0.6%

Overall the odds that you are going to get picked for an audit is low each year. In fact, audits hit a 10-year low in FY 2017 due to IRS budget cuts. 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. Because you file a tax return each year and have about less than a 1% chance each year, it is more likely than not that you will get audited at some point in your life.