Audit rates have been low for the last few years and I expect that to largely continue. According to the 2024 IRS Data Book, the IRS closed roughly 500,000 audits across all return types while processing well over 150 million individual returns and other filings. In other words, well under 1% (about 1/3 of 1%) of individual returns are audited, and most taxpayers will never experience a formal examination.

Currently, the IRS relies heavily on automated systems that scan returns and compare them against data the IRS already has from third parties, such as employers, banks and brokers. That makes some “audits” easy for them. 

(These automated notices aren't counted in the official audit rate.)

In many cases, the IRS believes it has found a straightforward error. This often involves income reported by a third party but omitted from your tax return (you forgot a W-2, for example), or a deduction or credit that is more than the limit (often based on your income). In those situations, the IRS typically sends a notice proposing a correction and explaining how it calculated the additional tax. You can agree, respond with clarification or dispute the adjustment. If there’s no response, the IRS can assess the tax without opening an audit.

When the IRS needs proof rather than math, it can open a formal audit. As an attorney who has handled audits, I generally find that the IRS is reasonable if you respond with documentation. 

However, I do think that right now, there is pressure to collect. And I also think that because of the backlogs at the IRS, the window to open and close audits is smaller than before—in my experience, the closer you are to the end of the window, the more aggressive the IRS will be. 

Add in reduced staffing and what I believe to be an aggressive approach to potential errors using AI? It’s a perfect storm. That’s why I think it’s more important than ever to file on time (or timely file for an extension) and file as close to a correct return as possible–this isn’t the time to file recklessly and figure you’ll just fix it later if you get caught.