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September 18, 2015


Audits Are Becoming More and More Rare in the U.S.

Nobody wants to be audited by the IRS, but most taxpayers have had nightmares of an agent showing up at their door, asking a lot of questions about their tax returns. While it is natural to worry about an audit, the reality is that audits are increasingly rare.

As CBS News reports, in 1963, the IRS audited about 5.6 percent of taxpayers. Fifty-two years later, that rate has dropped to less than 1 percent. This is due to declines in the IRS workforce, changes in the tax code, and other factors.

While the odds of an audit are slim for everybody, it appears that your income level affects the chances the IRS will launch one against you. The higher your income, the more likely there will be an audit. Individuals with adjusted gross income of over $10 million are audited nearly 30 percent of the time. By comparison, no more than .82 percent of taxpayers with adjusted gross income of $100,000 or less get audited.

When audits do occur, they are unlikely to be field audits, during which an agent conducts a face-to-face examination. These days, the vast majority of audits are conducted via written correspondence. While still unpleasant, it may be less stressful to face a letter than an IRS agent.

Despite all of this, no taxpayer can guarantee that they will never be subject to an audit. An audit can be unpleasant, but it is not the end of the world. With the help of a tax attorney, you can resolve the issue and move on with your life.