IRS audits are at a record low and could drop even more

Audit rates by the Internal Revenue Service (IRS) have fallen to their lowest levels since at least 1950 and can drop further if the Trump administration cuts the agency’s staff.

According to a New York Times analysis, fewer than 0.5% of individual tax returns were audited from 2020 to 2023—down about two-thirds since 2010. 

Back in 1980, the audit rate exceeded 2%; in 1960, it topped 3%.

According to the analysis
Audits have declined for all income brackets. For households earning $100,000–$500,000, the audit rate fell from 1.1% in 2010 to just 0.2% by 2019. Those making over $10 million saw audit rates fall from 21.5% to 11%. Corporate and partnership audits have also dropped significantly.

IRS staffing cuts play a key role
The steep decline is largely due to staff reductions. The IRS workforce shrank by 20% from 2010 to 2020. While the Biden administration hired 20,000 workers under the Inflation Reduction Act, the Trump administration is now pushing for up to 50% cuts.

Experts estimate such cuts could cost the government $350 billion to $2.4 trillion over a decade.

Lower audit rates mean less revenue
The IRS collected $11 billion from 2010 audits but just $4.5 billion from 2019 personal audits so far.

Research shows audits influence taxpayers for years, meaning fewer audits could increase evasion, especially among high earners—deepening the federal deficit.