IRS Audit Rate by Income 2026: $250K, $1M, $10M and Estates
Some links pay us a referral fee; each one says so. Disclosure
Quick Answer
For tax year 2021, the latest year the IRS has finished with, it examined 0.2% of individual returns with total positive income of $200,000 under $500,000, 0.6% at $500,000 under $1,000,000, 0.9% at $1,000,000 under $5,000,000, 3.9% at $5,000,000 under $10,000,000 and 6.6% at $10,000,000 or more. As of October 31, 2026, those are the figures printed in Table 3-1 of the 2025 IRS Data Book (Publication 55-B, Rev. 4-2026, covering October 1, 2024 to September 30, 2025). The same table gives 2.6% of estate tax returns and 0.1% of gift tax returns for 2021. Rates were higher in earlier years: tax year 2019 shows 0.3%, 0.8%, 1.8%, 3.4% and 11.5% for the same five bands. The Data Book has no cut at $250,000; the band that holds it runs from $200,000 to $500,000. “Total positive income” adds up every positive income line and leaves out losses, so it is not adjusted gross income.
Key Takeaways
- The five bands above $200,000 behaved differently over seven finished years. For tax years 2015 to 2021, the $200,000-to-$500,000 band went from 0.6% to 0.2%, the $500,000-to-$1,000,000 band from 1.2% to 0.6%, and the $1,000,000-to-$5,000,000 band from 2.6% to 0.9%. The $10,000,000-or-more band peaked at 11.5% in 2019 and was 6.6% in 2021.
- A single rate understates the top of the ladder and overstates the middle. Across every return with total positive income of $200,000 or more, 46,027 of 12,368,142 tax year 2021 returns were examined, 0.37%, about 1 in 269 (our arithmetic). Inside that group the odds run from about 1 in 456 at $200,000 to $500,000 to about 1 in 15 at $10,000,000 or more (our arithmetic).
- Tax years 2022 and 2023 are not finished. The table says the shaded years are still inside the normal 3-year statute, so the rate “may increase in future years.” Tax year 2022 already stands at 0.4%, 1.4%, 1.9% and 4.9% for the four bands from $200,000 to $10,000,000, above the final 2021 figures of 0.2%, 0.6%, 0.9% and 3.9%.
- Estate returns are examined far more often than income tax returns, and the rate has fallen: 8.2% for tax year 2015, 4.9% for 2019 and 2.6% for 2021. Gift tax returns are examined about as rarely as returns in the $200,000-to-$500,000 band, 0.1% for 2021. In fiscal year 2025 the 1,067 estate audits closed had $1,094,167 thousand of recommended additional tax, about $1,025,000 per audit (our arithmetic).
- Who audits you depends on the band. Of the audits closed in fiscal year 2025, 14.0% in the $200,000-to-$500,000 band were field exams, against 89.6% at $5,000,000 to $10,000,000 and 90.6% at $10,000,000 or more (our arithmetic). Most audits below $1,000,000 are done by correspondence.
- The Data Book shows a second, larger filter that is not an audit. In fiscal year 2025 the Automated Underreporter program closed 987,460 cases and assessed $5,897,835 thousand of tax and interest, and the forms it matches include Schedule K-1. The audit rates in Table 3-1 do not tell you how many of those notices reached a K-1 investor.
- A cumulative figure circulates that is easy to mistake for an annual rate. The Data Book’s highlights say 7.9% of returns with total positive income of $10 million or more were examined across tax years 2015 through 2023 taken together; the rate for any single finished year was 6.6% to 11.5%.
CSV · 223 rows
IRS audit rate by income, tax years 2015-2023: bands of total positive income, estate, gift, partnership and S corporation returns, and audits closed in fiscal year 2025
223 rows read from Tables 3-1, 3-2 and 3-8 of the 2025 IRS Data Book: the percentage of returns examined for each of nine tax years and eleven return groups, returns filed and examined for 2019 and 2021, audits closed in fiscal year 2025 by field or correspondence, and shares we computed, marked as our arithmetic.
This page answers one question with the IRS’s own table: how often does the IRS audit a return like yours? It is for the investor with $250,000 or more of income who holds K-1 or 1099 income from real estate funds, and for the family that expects to file an estate or gift return. The returns themselves are explained on our pages about K-1 boxes in real estate funds, estimated tax on K-1, REIT and BDC income and Form 706. This one only counts audits.
How to read Table 3-1 before you read any rate
Table 3-1 follows each tax year’s returns for as long as the IRS keeps examining them, so the same year shows a different rate in each annual Data Book. These are the definitions the table itself prints.
| Term in the table | What it means | Why it matters for your reading |
|---|---|---|
| Percentage covered | Closed and in-process examinations, divided by the returns filed for that tax year in that group | It is a share of returns filed, not of audits opened in one year; footnote 4 says “This percentage may increase in future years as additional returns are selected for examination.” |
| Total positive income (TPI) | The sum of all positive amounts shown for the sources of income on the Form 1040 series return, “and thus excludes losses” | A K-1 loss or a large rental loss does not lower the band you are placed in; the band is not your adjusted gross income (our reading) |
| Shaded years (2022 and 2023) | Returns still within the normal 3-year statute of limitations, so the percentage “will increase in future years” | Do not compare 2023’s 5.2% at $10,000,000 or more with 2019’s 11.5%; 2023 is a part-finished count |
| Statute of limitations | 3 years after the return was due, 6 years if income was understated by 25% or more, no limit if the return was filed with intent to commit fraud | Tax year 2021 is “the most recent year outside of the normal statute period,” so 2021 is the last near-final row |
| Tax year, not fiscal year | Rows are by the year of the return; Table 3-2 counts audits closed in fiscal year 2025 whatever the tax year | The two tables answer different questions and should not be divided into each other |
Source: 2025 IRS Data Book (Publication 55-B, Rev. 4-2026), Table 3-1 footnotes 4 and 7 and Notes, saved on October 31, 2026. The cell marked “our reading” is ours.
The ladder: nine tax years, five bands above $200,000
The figures below are the percentages printed in Table 3-1, in the same one-decimal rounding. Where the table prints “less than 0.05%” (its footnote 8) we write “under 0.05%.” The two right-hand columns are not final.
| Total positive income | TY2015 | TY2016 | TY2017 | TY2018 | TY2019 | TY2020 | TY2021 | TY2022 (open) | TY2023 (open) |
|---|---|---|---|---|---|---|---|---|---|
| $100,000 under $200,000 | 0.5% | 0.4% | 0.4% | 0.2% | 0.2% | 0.2% | 0.2% | 0.1% | under 0.05% |
| $200,000 under $500,000 | 0.6% | 0.6% | 0.5% | 0.3% | 0.3% | 0.3% | 0.2% | 0.4% | under 0.05% |
| $500,000 under $1,000,000 | 1.2% | 1.4% | 1.2% | 0.5% | 0.8% | 0.6% | 0.6% | 1.4% | 0.1% |
| $1,000,000 under $5,000,000 | 2.6% | 3.0% | 2.6% | 1.5% | 1.8% | 1.0% | 0.9% | 1.9% | 0.2% |
| $5,000,000 under $10,000,000 | 5.2% | 5.4% | 4.3% | 2.9% | 3.4% | 2.4% | 3.9% | 4.9% | 2.0% |
| $10,000,000 or more | 9.5% | 8.9% | 7.5% | 10.6% | 11.5% | 8.9% | 6.6% | 6.6% | 5.2% |
| All individual returns | 0.6% | 0.5% | 0.5% | 0.4% | 0.3% | 0.3% | 0.3% | 0.3% | 0.1% |
Source: 2025 IRS Data Book, Table 3-1, “Percentage covered,” tax years 2015 to 2023, saved on October 31, 2026. Percentages are of returns filed for that tax year in that group.
Three things stand out. First, every band from $200,000 to $10,000,000 was examined less often for tax year 2021 than for 2015, and the fall is steepest in the $1,000,000-to-$5,000,000 band (2.6% to 0.9%). Second, the $10,000,000-or-more group does not fall in a straight line: 2018 and 2019 are the highest rows in the table. Third, tax year 2022 is already above the finished 2021 row for four of the five bands, and the table says it will rise further. Using 2021 as a floor for the next few years is not safe (our reading).
Averaging the seven finished years gives a steadier number for planning. The simple average of the printed 2015-to-2021 rates is 0.4% at $200,000 to $500,000, 0.9% at $500,000 to $1,000,000, 1.9% at $1,000,000 to $5,000,000, 3.9% at $5,000,000 to $10,000,000 and 9.1% at $10,000,000 or more (our arithmetic, unweighted).
What those percentages mean in odds, from the counts
The printed percentage is rounded to one decimal, which hides the difference at the bottom. The counts in the same table give the unrounded rate for tax year 2021.
| Band, tax year 2021 | Returns filed | Examined (closed plus in process) | Share examined | Odds, about 1 in |
|---|---|---|---|---|
| $200,000 under $500,000 | 9,597,600 | 21,062 (20,305 + 757) | 0.22% | 456 |
| $500,000 under $1,000,000 | 1,779,838 | 10,645 (9,858 + 787) | 0.60% | 167 |
| $1,000,000 under $5,000,000 | 867,592 | 8,174 (6,777 + 1,397) | 0.94% | 106 |
| $5,000,000 under $10,000,000 | 71,862 | 2,771 (2,317 + 454) | 3.86% | 26 |
| $10,000,000 or more | 51,250 | 3,375 (2,680 + 695) | 6.59% | 15 |
| All five bands together | 12,368,142 | 46,027 | 0.37% | 269 |
Source: 2025 IRS Data Book, Table 3-1, tax year 2021 rows: returns filed, closed and in process, saved on October 31, 2026. The “examined” sums, shares and odds are our arithmetic.
An odds figure is an average over a group, not a forecast for one return. Table 3-1 does not say why any return was selected, so no row here tells you what raises or lowers your own chance (our reading).
Estate, gift and pass-through returns
The same table covers the returns an investor with real estate in a partnership or a family estate files. These rows are in a different unit: they are examinations of the entity or the decedent’s return, not of the owner’s Form 1040.
| Return type | TY2015 | TY2016 | TY2017 | TY2018 | TY2019 | TY2020 | TY2021 | TY2022 (open) | TY2023 (open) |
|---|---|---|---|---|---|---|---|---|---|
| Estate tax returns (Form 706 series) | 8.2% | 8.1% | 6.4% | 4.6% | 4.9% | 3.4% | 2.6% | 2.1% | 0.3% |
| Gift tax returns (Form 709) | 0.6% | 0.8% | 0.3% | 0.4% | 0.2% | 0.3% | 0.1% | 0.1% | under 0.05% |
| Partnership returns (Form 1065) | 0.2% | 0.2% | 0.1% | 0.1% | 0.1% | 0.1% | 0.1% | under 0.05% | under 0.05% |
| S corporation returns (Form 1120-S) | 0.2% | 0.2% | 0.2% | 0.1% | 0.1% | 0.1% | 0.1% | under 0.05% | under 0.05% |
Source: 2025 IRS Data Book, Table 3-1, “Percentage covered,” estate, gift, partnership and S corporation rows, saved on October 31, 2026. Footnote 18 says the estate row includes the Form 706 series; footnote 15 says partnerships generally pass profits and losses to their owners.
The estate row is the highest in the table outside the top income bands. For tax year 2019 the count is 1,316 examined (1,310 closed and 6 in process) of 26,750 returns, 4.9% (our arithmetic: 4.92%). Our guides to the estate tax exemption and the annual gift tax exclusion explain which estates file at all. The partnership rows explain little by themselves: a partnership rarely owes tax, so the examination of a fund’s return is not an audit of its investors, and the table does not track how many partner returns an adjustment reached (our reading).
Who audits you: field versus correspondence, fiscal year 2025
Table 3-2 shifts to audits closed in fiscal year 2025, for any tax year. It splits them into field exams, which the footnotes say are “generally performed in person by revenue agents, tax compliance officers, tax examiners, and revenue officer examiners,” and correspondence exams. It also shows the tax the IRS recommended and how many cases the taxpayer did not agree with.
| Band or return | Audits closed in FY2025 | Field share | Recommended additional tax | Per closed audit | Unagreed share |
|---|---|---|---|---|---|
| $200,000 under $500,000 | 35,021 | 14.0% | $503,866 thousand | $14,388 | 4.4% |
| $500,000 under $1,000,000 | 23,004 | 19.2% | $375,623 thousand | $16,329 | 5.1% |
| $1,000,000 under $5,000,000 | 14,913 | 38.0% | $659,073 thousand | $44,195 | 7.3% |
| $5,000,000 under $10,000,000 | 3,741 | 89.6% | $355,766 thousand | $95,099 | 6.8% |
| $10,000,000 or more | 4,060 | 90.6% | $1,132,423 thousand | $278,922 | 7.7% |
| Estate tax returns | 1,067 | 100.0% | $1,094,167 thousand | $1,025,461 | 3.4% |
| Gift tax returns | 760 | 100.0% | $917,098 thousand | $1,206,708 | 5.8% |
Source: 2025 IRS Data Book, Table 3-2, saved on October 31, 2026. Audits closed and recommended tax are as printed (money in thousands of dollars). Field share, per-audit figures and unagreed share are our arithmetic from the same rows; the recommended tax is a proposal, not tax finally assessed or collected.
Two points follow. The reader at $200,000 to $1,000,000 who is audited is most likely to get a letter, not a visit: in the two lowest bands 14.0% and 19.2% of closed audits were field exams (our arithmetic). Above $5,000,000 the proportion turns around, at about nine in ten. And the IRS recommended about $14,000 of extra tax per closed audit in the $200,000-to-$500,000 band and about $279,000 per audit at $10,000,000 or more (our arithmetic). The same footnote adds that “some field examinations may ultimately be conducted through correspondence,” so the split is not a promise that a field case ends with a visit.
In all, the IRS closed 497,621 audits in fiscal year 2025, of all return types, with $26,828,726 thousand of recommended additional tax. The seven rows above account for 82,566 of them (our arithmetic: 35,021 + 23,004 + 14,913 + 3,741 + 4,060 + 1,067 + 760); the rest are lower-income individual returns, corporations, employment tax and other returns.
The filter that is not an audit: matching K-1 and 1099 income
The odds in Table 3-1 do not count mismatch notices. The Data Book reports them in Table 3-8, under the Automated Underreporter program, which it describes as matching “taxpayer income and deductions submitted by third parties” against what the return reports, and then: “an AUR case is created, the taxpayer is contacted, and tax is assessed on any unresolved discrepancy.”
| Item, fiscal year 2025 | Count or amount | Note |
|---|---|---|
| Information returns received | 4,474,519,835 | Includes the 1099 series, Form W-2, Form 3921 and 3922, Form 5498 and Schedule K-1 (partnership, S corporation, and estate or trust distributions) |
| Automated Underreporter cases closed | 987,460 | Footnote 6: closed cases for which a notice was issued to a taxpayer |
| Additional assessments from that program | $5,897,835 thousand | Footnote 7: includes tax and interest |
| Automated Substitute for Return cases closed | 592,773 | A separate program for nonfilers; shown only for scale |
| Audits closed, all return types, in Table 3-2 | 497,621 | For comparison with the 987,460 notices above |
Source: 2025 IRS Data Book, Table 3-8 and Table 3-2, saved on October 31, 2026.
The Data Book does not split these 987,460 cases by income band, by form or by whether a K-1 was involved, so nothing here measures K-1 mismatch risk for a given investor. What it does show is where the larger number of tax letters comes from: about twice as many matching cases as audits closed (our arithmetic: 987,460 divided by 497,621 is 1.98).
What a reader can do with this
If your total positive income is $200,000 to $1,000,000:
- Treat the audit as a mail exercise. In fiscal year 2025, 83.9% of the audits closed in the $200,000-to-$1,000,000 bands were by correspondence (our arithmetic: 30,130 + 18,576 = 48,706 of 58,025). Keep the K-1, 1099 and closing-statement files that support each line a notice could ask about.
- Check that each K-1 and 1099 amount you report matches the form the payer filed. The table shows that the matching program is the bigger source of notices.
If your total positive income is $1,000,000 or more:
- Plan for field work. Above $5,000,000 about nine in ten closed audits are field exams. The records that matter are the ones that support the largest items on the return: basis, passive-loss and real estate professional claims (see real estate professional status) and depreciation studies (see cost segregation).
- Remember the clock. A return is generally open for 3 years after the due date, or 6 years if income was understated by 25% or more.
If you will file an estate or gift return:
- Expect a real chance of examination on a Form 706 and keep the valuation file. The 2021 rate of 2.6% is close to final; the 2015 rate was 8.2%. The path from the return to the heir’s basis is on our date-of-death appraisal page.
This is analysis of public documents, not investment, legal or tax advice.
FAQ
Update alert · free
An email when the irs audit rate data numbers change
When a rate, rule or filing behind this page changes: what changed, the one number that matters, and the source to check it yourself.
Sources, read and saved on October 31, 2026: Internal Revenue Service Data Book, 2025 (Publication 55-B, Rev. 4-2026), covering October 1, 2024 to September 30, 2025, Tables 3-1, 3-2 and 3-8 and the Highlights of the Data (irs.gov/pub/irs-pdf/p55b.pdf). Shares, odds, averages and per-audit figures are our arithmetic from those tables, with the assumptions stated. This is analysis of public documents, not investment, legal or tax advice.
Keep reading.
- 0121 min read
BlackRock Municipal Credit Alpha (MUNEX): Assets Down 84%
BlackRock Municipal Credit Alpha, an unlisted muni interval fund, offers to buy back 7.5% by Nov 6, 2026. NAV is $11.48; net assets fell 84% in two years.
- 0220 min read
Bluerock High Income Credit Fund (IIMAX): Nov 3 Repurchase Offer
Bluerock High Income Institutional Credit Fund (IIMAX) offers to buy 5% on Nov 3, 2026. The last three offers were prorated: 47%, 23% and 22% filled.
- 0316 min read
Clearlake Private Markets Fund: $1,000 Minimum, 5.17% Annual Cost
Proposed Clearlake interval fund, $1,000 minimum: the fee table (5.17%, 4.67%, 4.42%), the waiver, 3.50% load, bonus shares and when you could first sell.