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 2021. The IRS completed 15.8 million compliance activities, including sending more than 12 million math error notices. Graphic on the right shows the amount of recommended additional tax and assessments for fiscal year 2021, totaling $40.9 billion. Field exams accounted for $22 billion of this total.

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

Highlights of the Data

  • The exam coverage rate for Tax Year 2017 (the most recent year outside the statute of limitations period) of individual taxpayer returns reporting total positive income (TPI) of $10 million or more was 5.8 percent. The rate for taxpayers with TPI of $5–10 million was 3.1 percent, and 1.8 percent for those with TPI of $1–5 million (Table 17XLSX).
  • In Fiscal Year (FY) 2021, the IRS closed 738,959 tax returns examinations, resulting in nearly $26.8 billion in recommended additional tax (Table 18XLSX).
  • The IRS closed 2,362,596 cases under the Automated Underreporter Program in FY 2021, resulting in almost $10.3 billion in additional assessments, and the IRS closed 402,809 cases under its Automated Substitute for Return Program, resulting in $3.9 billion in additional assessments (Table 22XLSX).

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 2011-2019XLSX
Table 18: Examination Coverage: Recommended Additional Tax, and Returns with Unagreed Additional Tax, After Examination, by Type and Size of Return, Fiscal Year 2021XLSX
Table 19: Examination Coverage: Returns Examined Involving Protection of Revenue Base, by Type and Size of Return, Fiscal Year 2021XLSX
Table 20: Examination Coverage: Returns Examined Resulting in Refunds, by Type and Size of Return, Fiscal Year 2021XLSX
Table 21: Examinations of Tax-Exempt Organizations, Employee Retirement Plans, Government Entities, and Tax-Exempt Bonds, by Type of Return, Fiscal Year 2021XLSX
Table 22: Information Reporting Program, Fiscal Year 2021 XLSX
Table 23: Math Errors on Individual Income Tax Returns, by Type of Error, Fiscal Year 2021XLSX
Table 24: Criminal Investigation Program, by Status or Disposition, Fiscal Year 2021XLSX

Data for all years

 


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