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10 Myths About IRS Audits

8

It's a Common Occurrence

filing tax extension
T. McKnight looks over forms as she prepares to file for a tax extension in New York City, 2007. Mario Tama/Getty Images

Audits don't happen as often as one would think. In fact, according to IRS examination statistics, the agency only audited 1.0 million returns filed in 2017. While that may seem like a lot, it's really only 0.59 percent of the 196 million returns filed the previous year [source: IRS].

Here are the 2017 audit statistics, according to the IRS:

  • 2.04 percent of the people who had no adjusted gross income were audited.
  • 0.69 percent of those who earned less than $25,000 were audited.
  • 0.48 of the people who earned between $25,000 and $50,000 were audited.
  • 0.54 percent of the people who earned between $50,000 and $75,000 were audited.
  • 0.45 percent of the people who earned between $75,000 and $100,000 were audited.
  • 0.44 percent of the people who earned between $100,000 and $200,000 were audited.
  • 0.53 percent of the people who earned more than $200,000 but less than $500,000 were audited
  • 1.1 percent of people who between $500,000 and $1,000,000 were audited.
  • 2.21 percent of people who earned between $1,000,000 and $5,000,000 were audited.
  • 4.21 percent of people who earned between $5,000,000 and $10,000,000 were audited.
  • 6.66 percent of the people who earned more than $10,000,000 were audited

So, no, audits are not a common occurrence at all. Some speculate that they will happen even less often as the agency continues to lose funding and, as a result, employees. The IRS budget has been reduced by 20 percent between 2010 and 2018 [source: CBO]. This makes it more difficult for the IRS to keep up with its workload and to audit as many people as it might like to [source: Ellis].

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