What are the chances of being audited? IRS examined 0.6% of all tax returns filed in calendar year 2015, about 0.7% of all individual tax returns were audited and 1.1% of corporate returns. The likelihood of audit increases as AGI (Adjusted Gross Income) increases. Thirty-seven percent of the individual audits were triggered by earned income credits. Audits are increasingly being handled by computers, 24% of the individual audits were handled by revenue agents and the remaining 76% were correspondence audits. In a correspondence audit IRS sends out a letter asking for detail on tax return items and the taxpayer responds. Overall audit rates are down from prior years. Congress keeps cutting the IRS budget and the agency has to do more with less.
Practical next steps
- Note the date on this article. It describes the rules as they stood then, and tax procedure changes.
- Start from the notice you actually received: the number in the top right corner and the date printed on it decide what is still open to you.
- Pull your account transcripts before deciding anything. They show what the IRS believes about your account, which is not always what the letters say.
- If a deadline is running or the amount is significant, have someone read the file before you respond.
Visual guide
Official sources for current verification
- IRS — IRS Audits
- Taxpayer Advocate Service — Audits in Person
- IRS — Accuracy-Related Penalty
- IRS — Taxpayers Can Appeal an IRS Decision
- IRS — Collection Due Process FAQs
- Taxpayer Advocate Service — Collection Due Process
Important notice
This material provides general information, not legal or tax advice. Tax outcomes depend on the facts, procedural history, applicable law, and current agency guidance. Reading this page does not create an attorney-client relationship.
