How often do people get audited?

How often people get audited is relatively rare for most taxpayers, with audit rates well below one percent for average filers. For the general population filing individual income tax returns, the IRS audit rate has been around 0.2 to 0.5 percent in recent years, meaning about 2 to 5 out of every 1000 returns are audited, down from about 1 percent a decade ago due to budget cuts and staffing. Audit rates vary significantly by income and return type, for taxpayers earning under $200,000 the audit rate is about 0.2 percent, for those earning $500,000 to $1 million it is about 1 percent, and for those earning over $10 million it can be 5 to 8 percent or higher. Self-employed individuals filing Schedule C with business income over $100,000 are audited more frequently, around 1 to 2 percent. Earned Income Tax Credit claimants have historically had higher audit rates around 1 percent. Most audits are correspondence audits done by mail, not in-person. For businesses, audit rates are also low except for large corporations which are audited almost annually. So for a typical W-2 employee with straightforward return, audit is very uncommon, while complex, high income, or cash business returns are audited more often.