Who gets audited by the IRS the most?

Who gets audited by the IRS the most has changed over time, but historically the IRS audits certain groups at higher rates due to complexity, high income, and risk of underreporting. High income earners, particularly those reporting income over $500,000 and especially over $10 million, have significantly higher audit rates than average because larger dollar amounts are at stake and returns are more complex. Self-employed individuals and small business owners filing Schedule C with business income are audited more frequently, especially those reporting large expenses relative to income, claiming 100 percent business use of vehicles, or reporting persistent losses that suggest a hobby not a business. Cash intensive businesses like restaurants, bars, and salons also face higher audit rates. Taxpayers claiming Earned Income Tax Credit have historically been audited at relatively high rates due to complexity and improper payment concerns. People with large charitable deductions relative to income, offshore accounts, cryptocurrency transactions, and complex investment transactions also face higher scrutiny. Overall audit rates are low, under 0.5 percent for most taxpayers, but risk increases with high income, self-employment, large deductions, and discrepancies between reported income and third party information returns.