For the average individual filer, the chances of getting audited by the IRS sit around 0.4% — roughly 4 returns out of every 1,000. That baseline hides a lot of variation. A wage earner with a single W-2 faces very different odds than a millionaire, a small-business owner filing Schedule C, or someone claiming the Earned Income Tax Credit. Your specific risk depends on how much you earn, what you claim, and whether third parties are reporting income the IRS can match against your return.
The Baseline Audit Rate and Where It’s Headed
The IRS publishes examination data each year in its Data Book. In fiscal year 2022, the audit rate for individual returns was 0.38%, down from 0.41% the prior year.1Internal Revenue Service. SOI Tax Stats – Examination Coverage and Recommended Additional Tax After Examination In fiscal year 2024, the IRS closed roughly 505,500 audits across all return types.2Internal Revenue Service. SOI Tax Stats – IRS Data Book A decade earlier, rates were considerably higher; the drop reflects years of budget tightening and a shrinking workforce of revenue agents.
The near-term direction is uncertain. Congress initially directed billions in new IRS funding through the Inflation Reduction Act, partly to boost enforcement, but proposed rescissions of more than $11 billion could reverse course. The Congressional Budget Office estimated that a $20 billion cut to IRS mandatory funding would reduce federal revenue by $44 billion over the 2024–2034 period because fewer audits means less recovered tax.3Congressional Budget Office. How Changes in Funding for the IRS Affect Revenues With fewer agents, the IRS shifts toward cheaper correspondence audits by mail and away from the complex, high-dollar field examinations that require experienced staff.
Who Faces Higher Audit Odds
High-Income Filers
Earning over $1 million pushes your audit odds well above the national average. For 2022, the audit rate for millionaires had fallen to about 1.1%, down from 1.6% on 2018 returns and 7.2% on 2011 returns. The IRS announced in 2024 that it was targeting sharply higher audit rates for individuals with income above $10 million, aiming for 16.5% by tax year 2026. Whether the agency has the funding and personnel to hit those targets is an open question.
Earned Income Tax Credit Claimants
Claiming the Earned Income Tax Credit puts you in a surprisingly high-audit category. The IRS examines roughly 0.8% to 1% of EITC returns each year, a rate that rivals or exceeds the millionaire audit rate in recent years.4Internal Revenue Service. Statement for Updated Audit Rates TY 19 Most of these audits focus on whether the children claimed meet the residency, relationship, and age requirements.5Taxpayer Advocate Service. EITC Audits Will Once Again Begin – Proactively Responding to an EITC Audit Is Crucial Getting it wrong carries lasting consequences: an EITC claim the IRS determines was fraudulent triggers a ten-year ban on claiming the credit, and a reckless or intentional disregard of the rules carries a two-year ban.6Office of the Law Revision Counsel. 26 USC 32 – Earned Income
Self-Employment and Schedule C Filers
Filing a Schedule C draws more IRS attention than a straightforward W-2 return. Self-employed taxpayers are audited at several times the rate of typical wage earners, partly because business returns offer more opportunities to blur the line between personal spending and deductible expenses. Travel, meals, vehicle use, and home office deductions are frequent audit targets. If you claim them, keep contemporaneous records: receipts, mileage logs, and a clear separation between personal and business use. The IRS won’t take your word for it.
Digital Asset Holders
Cryptocurrency and digital asset activity is getting significantly harder to leave off a return. Every individual tax return now asks whether you received, sold, or exchanged digital assets during the year, and answering incorrectly is itself a red flag. Starting January 1, 2026, brokers must report the cost basis of digital asset transactions to the IRS on the new Form 1099-DA.7Internal Revenue Service. Digital Assets The IRS will have third-party data to compare against your return the same way it already matches W-2s and 1099s. Omitting crypto gains that a broker reported is a fast path to an automated inquiry.
How the IRS Decides Which Returns to Audit
The DIF Score
The IRS scores every individual return through the Discriminant Function system, known internally as DIF. The algorithm compares your numbers against statistical norms for filers in similar income brackets and occupations. The further your return deviates from those norms, the higher your DIF score, and the more likely a human reviewer will take a closer look. The IRS has broad statutory authority to examine any books, records, or other data relevant to determining the correctness of a return.8Internal Revenue Code. 26 USC 7602 – Examination of Books and Witnesses The DIF score is one of the primary tools for deciding where to aim that authority.
Information Matching and the CP2000 Notice
Before a human agent gets involved, IRS computers automatically cross-reference the income and deductions on your return against third-party documents: W-2s from employers, 1099s from banks and brokerages, 1098s from mortgage lenders. When the numbers don’t match, the system generates a CP2000 notice proposing changes to your return. A CP2000 isn’t technically an audit, but it functions like one — the IRS is telling you it found a discrepancy and expects an explanation.
If you receive a CP2000, you have 30 days to respond (60 days if you live outside the United States). You can agree and pay, disagree and provide supporting documentation, or partially agree if only some of the proposed changes are correct. Ignoring the notice leads to an automatic assessment of the proposed tax, plus penalties and interest.9Internal Revenue Service. Topic No. 652 – Notice of Underreported Income – CP2000 The same is true for a formal audit notice: silence lets the IRS assess the tax automatically, and once the collection process starts, options narrow quickly.
What “Getting Audited” Actually Looks Like
When the IRS opens a formal audit, it takes one of three forms, and the format tells you a lot about the seriousness of the issue. Every audit starts with a written notice by mail. The IRS does not open an audit by phone or email.
- Correspondence audit: the most common type, accounting for over 70% of all audits. The entire process is handled by mail. The IRS questions one or two specific line items and asks you to send documentation. Most wrap up within three to six months.10Taxpayer Advocate Service. Lifecycle of a Tax Return – Correspondence Audits
- Office audit: you’re asked to visit a local IRS office for a face-to-face review. A revenue agent examines your return in more detail and may ask about several financial topics. Less common, reserved for situations that can’t be resolved through documents alone.
- Field audit: the most intensive format. A revenue agent comes to your home or business to examine books, records, and assets directly. Field audits typically involve business returns or high-net-worth individuals and can take a year or longer to complete.
With budget constraints pushing the IRS toward lower-cost enforcement, the share of correspondence audits is likely to stay high while office and field audits remain historically low. That matters for your odds: if you’re a typical wage earner, the realistic scenario is a letter questioning one item, not a revenue agent at your door.
How Long the IRS Can Come After You
Your exposure isn’t permanent — usually. The general statute of limitations gives the IRS three years from the date you filed your return to assess additional tax.11Office of the Law Revision Counsel. 26 US Code 6501 – Limitations on Assessment and Collection If you filed before the April deadline, the clock starts on the actual due date, not the date you filed early. Three exceptions stretch or eliminate that window:
- If you leave out more than 25% of the gross income shown on your return, the IRS gets six years. Overstating your cost basis on a sale, which reduces your reported gain, counts as an omission too.11Office of the Law Revision Counsel. 26 US Code 6501 – Limitations on Assessment and Collection
- If you filed a false or fraudulent return with intent to evade tax, there is no statute of limitations. The IRS can audit that return at any time.12Internal Revenue Service. Time IRS Can Assess Tax
- If you never filed a required return, the three-year clock never starts. The IRS can assess the tax whenever it gets around to you.12Internal Revenue Service. Time IRS Can Assess Tax
So the practical picture: for a filer whose return is straightforward and matches the third-party data the IRS already has, audit odds are low and the window closes in three years. For a high earner, an EITC claimant, a Schedule C filer, or someone with unreported digital asset gains, the odds are meaningfully higher — and if income was substantially understated or a return was never filed, the IRS has far longer to notice.