Probability of Being Audited by the IRS (Annual)

The IRS audited approximately 0.38% of individual tax returns in the 2022 fiscal year, the lowest rate in decades due to reduced IRS funding and staffing. However, audit rates vary dramatically by income level: taxpayers earning over $1 million face audit rates of about 1.1%, while those claiming the Earned Income Tax Credit (EITC) face rates around 0.8%.

Common audit triggers include large deductions relative to income, unreported income (the IRS receives copies of your W-2s and 1099s), excessive business losses, large cash transactions, foreign bank accounts, home office deductions, and mathematical errors. Self-employed individuals face higher audit rates than W-2 employees.

To reduce audit risk: report all income accurately (the IRS matches what you report against what payors report), keep thorough records and receipts, use tax preparation software or a qualified CPA, be reasonable with deductions, and file electronically (paper returns have higher error rates). If audited, respond promptly, provide requested documentation, and consider hiring a tax professional or enrolled agent to represent you. Most audits are correspondence audits handled by mail.