IRS Audit Rates
| Sole Proprietors | 2007 Audit Rate |
| Income under $25,000 | 1.3% |
| $25,000 to $100,000 | 2.0% |
| $100,000 and over | 6.2% |
| Partnerships | 0.4% |
| S Corporations | 0.5% |
| C Corporations | |
| Assets under $250,000 | 0.8% |
| $250,000 to $1 Million | 1.3% |
| $1 Million to $5 Million | 1.7% |
| $5 Million to $10 Million | 3.0% |
IRS uses computer generated “DIF” Scores
IRS decides who to audit by plugging the information from your tax return into a complex formula to calculate a “discriminate function” (DIF) score. Tax returns with a high DIF have a far higher chance of being audited.
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