Man has a calculator and a notepad to calculate if he's likely to be audited

What are the Odds of Being Audited by the IRS?

Good news, nervous taxpayers! Budget cuts within the IRS have led to a decrease in audits, mainly due to a decrease in auditors. As of 2014, there were only 11,600 revenue agents. If that still sounds like a lot, you’d be pleased to know that figure is a ten-year low, and the number is expected to fall even further.

Even though less than 1% of all taxpaying Americans were audited last year, there are certain factors that will increase your chances of being subject to an audit. High-income earners—and we’re talking millionaire-level highs—makeup only 0.27% of all tax returns. This tiny demographic made up 32.96% of all IRS audits. If you don’t report a gross income at all, you might be out of luck too: people who didn’t report any income made up 5.26% of the audited population. Only 1.83% of taxpayers didn’t report any income.

International filers are more likely to be audited as well. Due to rampant offshore tax evasion, tax returns sent from overseas are prone to further examination. 4.8% of international tax returns were audited in 2014. That’s a modest percentage compared to the audited returns that report expensive assets. Although fewer than 40,000 taxpayers actually submit an estate tax return, 8.4% of them were audited. Owning assets worth $5 million or more will put a target on your back; over 21% of estate returns with assets valued between $5 and $10 million were audited, and 27% of those with a $10 million (or higher) estate were audited.

Last Updated: December 15, 2016

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