IRS Audit Statistics: Rates and Chances of Receiving a Tax Audit (2021 IRS Databook)

audit statistics

The 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. The IRS generally provides examination coverage data for tax returns filed 2 years ago. Therefore, the most recent data is for the 2019 Tax Year.

Total IRS Audits on Individual Tax Returns (Tax Years 2016-2019)

 

Tax Year 2016 2017 2018 2019
Individual Total Returns Filed 150,447,029 153,062,634 153,927,628 157,951,815
     Total Audits Closed & In Process 788,090 702,574 493,913 341,845
Percentage Audited in FY 0.52% 0.45%  0.32%  0.22%

 

*Although the IRS data book 2021 and 2020 are out, the actual percentage of individual tax returns examined by the IRS for a specific tax year gets reported by the IRS two years later. Realize because of the 3-year statute of limitations, the percentage of returns audited will increase as other examinations are opened. For example, the 2016 IRS audit data showed an average audit rate of .52% for individual tax returns when previously it was .51%. 

Tax Year 2019 IRS Audit Rates by Income Level for Individuals (Most Recent Data)

Here are recent statistics on IRS audit statistics for the 2019 tax year. The 2nd column represents what percent of tax returns filed make up each income level. The 3rd column, or Percentage of Returns Examined, illustrates for each income level, what percentage of returns were audited. 

 

Income Level
All Individual Returns Filed for Tax Year 2019
Percentage of Returns Examined
No adjusted gross income
.52%
0.78%
$1 - $24,999
31.19%
0.37%
$25,000-$49,999
24.04%
0.18%
$50,000-$74,999
14.33%
0.11%
$75,000-$99,999
9.18%
0.10%
$100,000-$199,999
14.46%
0.12%
$200,000-$499,999
4.92%
0.10%
$500,000-$999,999
.82%
0.30%
$1,000,000-$4,999,999
.36%
0.60%
$5,000,000-$9,999,999
0.03%
1.02%
$10,000,000+
0.02%
2.01%

 

IRS Audit or Examination Statistics by Tax Filing Type for Tax Year 2019

 

 
Returns Filed for Tax Year 2019
Returns Audited (in-process and closed)
Percentage Audited
Corporation (except 1120-S) 1,522,958 4,395
0.29%
S Corp 4,940,351
3,182
0.06%
Partnership 4,512,292 1,335.00
0.05%
Individual 157,951,815 341,845
0.22%

 

Overall the odds that a taxpayer will get audited have decreased over the last few years. In fact, examinations are down compared to the previous year. Generally speaking, the IRS does audit individuals with higher income because the IRS has limited resources and they can financially justify 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.

Source: IRS Data Book 2020

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