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The IRS publishes statistics regarding the percentage of returns that have been examined by type of return. Not surprisingly, some taxpayers have a greater chance of being audited than others according to the latest statistics. Let\u2019s take a look at some stats:<\/p>\n
The majority of audits, 74.8%, were conducted via correspondence, and the remaining 25.2% were conducted in the field.<\/p>\n
Overall audit rate: <\/em>The overall audit rate is .5%, but the audit rate of individual returns is .6%.<\/p>\n Corporate audit rates<\/em>:<\/p>\n .9% for all corporate returns, excluding s-corporations<\/p>\n 8.1% for large corporations with assets of $10M or more<\/p>\n .2% for s-corp returns<\/p>\n Individual audit rates:<\/em><\/p>\n 2.4% for returns with business income and gross receipts of $100,000 to $200,000<\/p>\n 3.2% for returns with positive income of $1M or more<\/p>\n .2% for returns with income lower than $200,000, no Earned Income Tax Credit, no business income or rental income.<\/p>\n If you read the footnotes of the statistics, it appears that 37% of individual returns that were selected for examination were due to a taxpayer claiming the Earned Income Tax Credit (EITC). Also, the statistics do not include several million CP2000 notices that are sent to taxpayers each year when there is a mismatch between what is reported on their tax return and what is reported to the IRS. If those notices were included, then the audit rate would be much higher.<\/p>\n