This section of the IRS Data Book highlights the IRS’s compliance efforts. Examinations (audits) of most types of tax returns, information reporting and verification, math error notices, and criminal investigations are critical tools for determining if income, expenses and credits are being accurately reported and to identify and resolve taxpayer errors and identify fraud. These tools ensure that IRS has a presence across all income and asset levels of taxpayers. While the IRS accepts most returns as filed, some are selected for examination using various methods, including random sampling and computerized screening. Most IRS examinations are conducted through the mail (correspondence) or face-to-face (field).

Graphic on the left shows the number of compliance activities completed during fiscal year 2020. The IRS completed 5.3 million compliance activities, including sending almost 1.2 million math error notices. Graphic on the right shows the amount of recommended additional tax and assessments for fiscal year 2020, totaling $22.4 billion. Field exams accounted for $10.1 billion of this total.

View chart details. For additional graphs from this section, download the PDF of this year’s Data Book.

Highlights of the Data

  • The exam coverage rate for Tax Year 2016 (the most recent year outside the statute of limitations period) of individual taxpayer returns reporting total positive income (TPI) of $10 mil¬lion or more was 7.0 percent. The rate for taxpayers with TPI of $5–10 million was 4.2 percent, and 2.2 percent for those with TPI of $1–5 million  (Table 17).
  • In Fiscal Year (FY) 2020, the IRS closed 509,917 tax returns examinations, resulting in more than $12.9 billion in recommended additional tax (Table 18).
  • The IRS closed 942,155 cases under the Automated Underreporter Program in FY 2020, resulting in more than $3.9 billion in additional assessments, and the IRS closed 662,611 cases under its Automated Substitute for Return Program, resulting in nearly $5.6 billion in additional assessments  (Table 22).

Index of Data Book Tables

 

Compliance Presence: Tables 17–24

Table 17: Examination Coverage and Recommended Additional Tax After Examination, by Type and Size of Return, Tax Years 2010–2018
Table 18: Examination Coverage: Recommended Additional Tax, and Returns with Unagreed Additional Tax, After Examination, by Type and Size of Return, Fiscal Year 2020
Table 19: Examination Coverage: Returns Examined Involving Protection of Revenue Base, by Type and Size of Return, Fiscal Year 2020
Table 20: Examination Coverage: Returns Examined Resulting in Refunds, by Type and Size of Return, Fiscal Year 2020
Table 21: Examinations of Tax-Exempt Organizations, Employee Retirement Plans, Government Entities, and Tax-Exempt Bonds, by Type of Return, Fiscal Year 2020
Table 22: Information Reporting Program, Fiscal Year 2020 
Table 23: Math Errors on Individual Income Tax Returns, by Type of Error, Fiscal Year 2020
Table 24: Criminal Investigation Program, by Status or Disposition, Fiscal Year 2020

Data for all years

 


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