IRS Planning to Increase Audits of the Wealthy and Corporations by 50% in 2026

The Internal Revenue Service (IRS) is the recipient of approximately $60 billion over a 10-year period as part of the Inflation Reduction Act (IRA) enacted in 2022, which contains “$500 billion in new spending and tax breaks that aim to boost clean energy, reduce healthcare costs, and increase tax revenues.” The IRS plans to increase the audit rate for households with incomes of $10 million and up by 50% for the 2026 tax filing; as well as nearly tripling the audit rate for corporations with at least $250 million in assets. As part of the efforts to reach its goal, the federal agency has increased full-time employees to approximately 90,000 — up from 79,000 in fiscal year 2022, with an end goal of a head count of around 102,500 by the end of this decade. According to 2019 finalized numbers, the IRS audited 11% of the returns from the $10 million-plus household income group, a percentage that the IRS is hoping to increase to 16.5% for 2026 returns; while corporations in the $250 million in assets category will see an audit-rate increase from 9% to 22%, bringing audit rate levels back to around what they were more than a decade ago, before underfunding and waning staff counts.