Annual Probability of IRS Audit (General Population)

The overall IRS audit rate for individual tax returns has declined significantly, from about 1.1% in 2010 to approximately 0.4% in 2023 (about 580,000 audits out of 152 million individual returns). Budget cuts reduced IRS enforcement staff by about 30% between 2010 and 2020, contributing to the decline.

Audit rates vary dramatically by income level. For returns under $50,000, the audit rate is about 0.3%. For returns between $200,000 and $1 million, it's about 0.6%. For incomes over $1 million, it jumps to about 2-3%. Self-employed individuals (who file Schedule C) face higher audit rates of about 1-2% due to the greater opportunity for unreported income. EITC claimants have historically faced disproportionately high audit rates (about 1.1%) relative to their income levels.

The Inflation Reduction Act of 2022 allocated $80 billion in additional IRS funding over 10 years, with a significant portion dedicated to enforcement. The IRS has stated that enhanced enforcement will focus on high-income earners, large partnerships, and complex returns rather than taxpayers earning under $400,000. The most common audit triggers include unreported income, large charitable deductions, home office deductions, significant business losses, and mathematical errors.