This puts a focus on high-income earners. The majority of audited returns are for taxpayers who earn $500,000 a year or more, and most of them had incomes of over $1 million. These are the only income ranges that were subject to more than a 1% chance of an audit in 2018.

Does anyone audit the IRS?

Although the IRS audits only a small percentage of filed returns, there is a chance the agency will audit your own. The myths about who or who does not get audited—and why—run the gamut.

Who is most likely to get audited?

Who’s getting audited? Most audits happen to high earners. People reporting adjusted gross income (or AGI) of $10 million or more accounted for 6.66% of audits in fiscal year 2018. Taxpayers reporting an AGI of between $5 million and $10 million accounted for 4.21% of audits that same year.

What do you need to know about an IRS audit?

An IRS audit is a review/examination of an organization’s or individual’s accounts and financial information to ensure information is reported correctly according to the tax laws and to verify the reported amount of tax is correct. Generally, the IRS can include returns filed within the last three years in an audit.

What’s the percentage of tax returns that are audited?

With fewer agents available to perform audits, the agency’s audit rate has been whittled to 0.45% of individual returns in fiscal 2019, the IRS said recently. That compares with an audit rate of 0.9% in the fiscal 2014.

Why are there fewer people auditing the IRS?

Even so, some groups face higher audit rates than others. The tax agency is auditing fewer individual taxpayers not because we’re more honest, but because the IRS is working with fewer employees. The agency’s workforce has dropped from 94,000 workers in 2010 to roughly 78,000 in the most recent fiscal year, according to IRS data.

How long does it take for a tax return to be audited?

The IRS selects returns that are the most likely have errors, based on complex criteria. After you file a return, the IRS usually has three years from that point to start and finish an audit. The IRS starts most tax audits within a year after you file the return, and it finishes most audits in less than a year.