IRS Audit Rates Continue to Decline
Category Percent of Returns Audited
1995 1996 1997 1998 1999 2000
All Individuals 1.67 1.67 1.28 0.99 0.90 *0.49
--- less than $100,000 TPI 1.60 1.58 1.19 0.92 0.86 0.45
--- $100,000 or more TPI 2.97 3.21 2.74 2.01 1.40 0.96
All Corporations 2.05 2.35 2.68 2.09 1.55 1.12
--- less than $100 million assets 1.57 1.88 2.22 1.67 1.16 0.77
--- $100 million or more assets 25.77 25.33 24.29 21.43 19.05 16.30

*For taxpayers with under $25,000 in income, their audit rate was higher -- 0.63% -- than for individual taxpayers generally (0.49%). This was because IRS audit coverage is now dominated by semi-automated Service Center audits -- rather than the more traditional face-to-face ("District") audits. And most of these Service Center audits targeted low income taxpayers since their focus in recent years has been on the earned income tax credit (EITC) program -- a special credit available to low income taxpayers. 

Note:  TPI = Total Positive Income. These figures include IRS audits conducted of taxpayers abroad.

Copyright 2001, TRAC Reports, Inc.