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IRS Audit Rates Are Dropping, and Big Earners Couldn’t Be Happier

Audit Rates by Total Positive Income: Although audit rates are declining more rapidly for higher-income taxpayers, the audit rate for lower-income taxpayers claiming the Earned Income Tax Credit is running higher than average. The reason: IRS says it doesn’t have the highly-trained staff needed for high-income audits. EITC audits are easier. Shown: 2019 tax year.

For the wealthy, the IRS says it’s out-gunned.

By CPA Trendlines

The percentage of taxpayers audited by the IRS has been in precipitous decline since 2010, with the steepest decline in – surprise, surprise! – the highest income bracket, according to a new study.

HOISTED from COMMENTS: “It is not the auditors who are to blame. It is the IRS processes that the auditors are following.”

The odds of a taxpayer being audited are astonishingly low, an average of just 0.25% in 2019, way down from 0.9% in 2010.

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Audit rates for brackets between $25,000 and $500,000 are well below average, just 0.17%.