Looking at raw numbers alone, less than 1% of filers have been audited by the IRS in recent tax years. For example, the IRS tracked just 0.3% of all filers in the 2021 tax year, based on the most recent data available.
Audit rates are higher for selected groups of taxpayers based on certain characteristics, such as the amount and type of income they report and the specific tax breaks they claim. But even there, with very few exceptions, audits typically affect less than 10% of a given group, and often a much smaller share, less than 1%.
But a lot has changed at the IRS over the past year.
The majority of employees were laid off or retired, including many with experience in enforcement and complex auditing. According to a July 2025 report by the Ministry of Finance’s Inspector General of Tax Administration, just over a quarter of both tax inspectors and tax authorities were among them.
And most of the enforcement funding promised under the Inflation Control Act of 2022 has been canceled, with the Trump administration looking to further reduce IRS funding next year.
At the same time, the agency has modernized outdated systems and increased the use of AI in many areas, including enforcement. “The IRS is using artificial intelligence (AI) and advanced analytics to more accurately identify high-risk areas for noncompliance and fraud,” IRS CEO Frank Bisignano said in written testimony before the Senate Finance Committee earlier this month. Among his goals for the agency are “improving the collection beyond historic standards while promoting strong compliance efforts.”
How will the combination of these major changes affect a filer’s likelihood of being audited in the coming years?
It’s not clear for several reasons, especially: a) Whether this technology will be used responsibly and strategically, as former IRS Commissioner Danny Werfel has stated. b) whether there are a sufficient number of experienced IRS employees to appropriately select and audit returns that the AI identifies as potentially questionable;
Ideally, AI could help the IRS move away from fully compliant tax filers, thereby reducing the rate of so-called “no change” audits. These were audits done by the IRS and they didn’t find anything wrong so you didn’t get any revenue.
It can also help better identify people who are underreporting their income or violating tax laws.
“This will allow the IRS to more efficiently spot noncompliance,” said Barry Johnson, a former chief data and analytics officer at the IRS who specifically oversaw how the IRS used AI.
AI has the ability to search for and identify patterns in tax returns that would take even a human or the IRS’s old statistical models much longer to discover. Identify anomalous returns that may indicate that the filer is mistakenly underreporting income or engaging in outright fraud.
“AI provides a forensic edge for selecting the appropriate returns for audit,” Warfel said. “It’s like buying night vision goggles. It helps you see which returns to choose and where there is tax evasion.”
If AI is used responsibly, more taxpayers with unpaid balances could be contacted, he added.
By responsible, he means the IRS needs to balance “the use of AI with human review, double-checking and making sure the AI is producing reliable output.”
In particular, the use of AI could improve the rate of “correspondence audits,” which are the most typical type of audit pursued by the IRS, as opposed to field or office audits, which are more time-consuming and resource-intensive.
In a correspondence audit, the agency sends a letter to the filer indicating that additional amounts must be paid (or a refund is withheld) based on one or two separate issues noted on the return for a particular single tax year. Filers must then pay or take other action if they wish to dispute the assessment.
But if the agency goes further with its correspondence audits, Werfel said, it will need to ensure it has enough trained staff to respond to questions from affected filers.
The same goes for when AI uncovers more complex filing issues that may require on-site or office audits.
At the moment, there may be a shortage of experienced enforcement staff, given how much expertise has been leaked in the last year. “I don’t think AI will replace the employees who are gone. We still need experts to meet with taxpayers, go through their books and records, and conduct audits to determine if their tax returns are accurate,” said Johnson, now a non-resident fellow at the Urban-Brookings Tax Policy Center.
Another reason why it is difficult to predict what audit rates will be is the AI itself. It’s developing so rapidly that in the future it may be able to do even more than it does today.
“When you make a decision to be proactive, bend or break the rules, look at the IRS’ capabilities not just now, but in the years ahead,” Werfel said. “It is difficult to know what kind of monitoring and evaluation capabilities AI will have…The true paradigm shift that AI represents could mean that the situation in 2028 and 2029 will be very different.”
Also worth remembering. A government agency can conduct an audit for at least three years from the date you file your return, but longer in some circumstances, such as when the agency suspects fraud.
