The IRS Is Changing: Are You More Likely To Be Audited in 2025?

The IRS is changing in 2025, and one of the main concerns is whether audits are increasing. With ongoing technology upgrades and new enforcement initiatives, the question is: Are you more likely to be audited by the IRS in 2025?

Let’s talk about the IRS audit rates, red flags, and how to reduce your chances of an IRS audit.

What Is the Likelihood of an IRS Audit in 2025?

Despite all of the concerns, the average taxpayer has a very low chance of being audited by the IRS.

According to the IRS’s most recent data:

• Roughly 1 in 260 taxpayers are audited, which is a 0.38% chance.
  
  
• Audits are done via mail, not in person.
  
  
• High earners, those who claim certain credits or deductions, have a higher chance of being audited.
  
  

Fact: For taxpayers who earn below $200,000 and file a straightforward return, their audit chances are very low.

Why IRS Audits Could Become More Common

Recently, the IRS had staffing issues and budget cuts. But things are changing for the IRS in 2025:

New Funding from the Inflation Reduction Act

Tens of billions of dollars in funding were recently designated to the IRS. These funds are targeted toward modernizing systems and enforcement.

Hiring More Agents

The IRS has created new jobs for auditors and data analysts – over 20,000 new positions. These new agents are meant to improve compliance and investigate tax fraud.

Better Technology

In 2025, AI and data analytics tools will be used to identify suspicious returns.

Translation: Technology and structured enforcement are higher, but the chances of an audit are low. IRS structural changes are more likely to impact high-income earners and small businesses.

Red Flags to Avoid an IRS Audit: What May Trigger an IRS Audit?

Certain behaviors are more likely to trigger an IRS audit. Here is a list of common IRS audit triggers:

How Do I Reduce My IRS Audit Risk?

While listed as red flags, the behavior above is in no way against the law. The key is proper documentation. To stay in the clear and minimize any issues:

• Keep good records of income, receipts, expenses, and charitable donations
  
  
• Double-check the numbers to avoid errors with tax software or a professional
  
  
• Work with a tax pro if your tax return is complex
  
  
• Report all income, including crypto, freelance work, PayPal, and Venmo

Tip: If you receive a 1099 form, the IRS also gets a copy of that form. Always report it.

What Happens If You Are Audited By the IRS?

There are three separate types of IRS audits:

1. Mail Audit – You receive a letter from the IRS asking for proof of income or deductions.
   
   
2. Office Audit – You visit a local IRS office with your documents in hand.
   
   
3. Field Audit – The IRS visits your home or business.
   
   

Most audits are solved by submitting documentation to the IRS. After successful form submission, you may get a refund adjustment, owe more to the IRS, or see no changes.

FAQ for an IRS Audit – 2025 Edition

Q: Am I more likely to get audited if I use tax software (e.g., TurboTax)?
A: No, online tax software typically reduces filing errors, which lowers your risk of being audited by the IRS.

Q: If I claim the standard deduction, will it reduce my audit risk?
A: Potentially, the more items deducted increase the complexity of your filing. More complex filings tend to have a slightly increased chance of being audited by the IRS.

Q: Should I avoid deductions to avoid audits?
A: No, just be accurate and honest. Claim your deductions with documentation if you are entitled to them.

Need More Help with Tax Filing or IRS Notices?

If you're unsure how to file with the IRS or have already received an audit notice from the IRS, Tax Attorneys of America can help you through the process. We specialize in:

• Filing back taxes
• Negotiating payment plans
• Resolving IRS penalties
• Taxpayer audit defense
  
  

Contact us today for a free consultation and get peace of mind.