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 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 2013
FY 2014 FY 2015
FY 2016
Total Returns Filed Prior CY 145,819,388 145,236,429 146,861,217 147,964,324
Total Audits Conducted 1,404,931 1,242,479 1,228,117 1,034,955
Percentage Audited 0.96% 0.85% 0.84% 0.7%

 

IRS Audit Rates by Income Level for Individuals (2016)

Percentage of Total Returns Filed
Percentage of Returns Audited
No adjusted gross income
1.7%
3.25%
$1 – $24,999
37.45%
0.8%
$25,000-$49,999
23.21%
0.49%
$50,000-$74,999
13.20%
0.41%
$75,000-$99,999
8.52%
0.52%
$100,000-$199,999
11.72%
0.62%
$200,000-$499,999
3.38%
1.01%
$500,000-$999,999
0.54%
3.62%
$1,000,000-$4,999,999
0.25%
2.06%
$5,000,000-$9,999,999
0.02%
10.46%
$10,000,000+
0.01%
18.79%

 

IRS Audit Rates/Statistics by Tax Filing Type FY 2016

Returns Filed (Prior Calendar Year)
Returns Audited
Percentage Audited
Small Corporation
1,765,733
14,136
0.8%
Large Corporation
67,701
6,453
9.5%
S Corporation
4,688,683
15,869
0.3%
Partnership
3,862,691
14,645
0.4%
Individual 147,964,324 1,034,955
0.7%

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.