September 2026

A new Treasury Inspector General for Tax Administration (TIGTA) report is drawing attention to a significant change in IRS enforcement: individual examination starts fell by 30% in fiscal year 2025 compared with fiscal year 2024. Audits of taxpayers with income above $400,000 also declined, falling 27%.

At first glance, that might sound like good news for taxpayers.

But a lower audit rate does not mean taxpayers can stop worrying about compliance. The reasons behind the declineβ€”and what they could mean for future IRS enforcementβ€”are much more complicated.

What Happened to IRS Audits?

According to TIGTA, the IRS lost about 27% of its examination and collection workforce between fiscal years 2024 and 2025. Examination and collection staffing fell from 27,217 employees at the end of fiscal 2024 to 19,612 at the end of fiscal 2025. TIGTA said staffing reductions contributed directly to the decline in examination activity.

As a result, individual examination starts dropped approximately 30%. For taxpayers earning more than $400,000, examinations declined 27%.

Does a Lower Audit Rate Mean the IRS Is Less Focused on Taxpayers?

Not necessarily.

The decline in examinations happened alongside a broader change in IRS staffing and enforcement resources. TIGTA reported that the IRS collected a record $5.3 trillion in federal tax revenue during fiscal 2025β€”13.2% more than in fiscal 2023. Individual income tax collections increased 17% over that same period.

So while examination activity declined, the IRS was still collecting substantial amounts of tax revenue. That distinction is critically important: fewer audits do not mean fewer tax obligations.

What About High-Income Taxpayers?

High-income taxpayers have received considerable attention from the IRS in recent years. However, TIGTA's latest figures show that examinations of taxpayers with income above $400,000 also declined in fiscal 2025.

The decline does not necessarily mean these taxpayers have become a low priority. Instead, TIGTA attributed the broader decline in enforcement activity partly to workforce reductions and the exhaustion of supplemental enforcement funding.

Why Did IRS Enforcement Decline?

There are two major factors highlighted by TIGTA:

  • 1. Workforce reductions: The IRS examination and collection workforce declined substantially during fiscal 2025. By January 10, 2026, staffing had fallen further to approximately 17,517 employees.
  • 2. Enforcement funding changes: The IRS exhausted its remaining enforcement funding from the Inflation Reduction Act on December 31, 2025. With fewer personnel and reduced supplemental funding, enforcement activity declined significantly.

Does This Mean Taxpayers Should Expect Fewer IRS Notices?

Not necessarily. Audits are only one part of IRS enforcement.

TIGTA reported that collection revenue actually increased between fiscal 2023 and fiscal 2025. The report also noted that the IRS resumed automated collection notices that had been paused during the COVID-19 period, increasing activity involving nonfilers and other compliance programs.

That means taxpayers can still encounter IRS collection activity even if examination numbers decline. A taxpayer might never be formally audited and still receive:

  • An IRS balance-due notice
  • A nonfiling notice
  • A request for additional information
  • A collection notice
  • A notice relating to income reported to the IRS by a third party

The Biggest Mistake: Assuming You Are "Safe"

A lower audit rate can create a dangerous misconception:

"The IRS is auditing fewer people, so I don't need to worry."

That is not a sound tax strategy. Taxpayers remain legally responsible for reporting income correctly, claiming only appropriate deductions and credits, filing all required returns, and paying taxes when due. An audit is simply one possible way the IRS identifies compliance issuesβ€”it is far from the only one.

What Should Taxpayers Do?

Instead of trying to predict whether the IRS will audit you, focus on maintaining a return that can withstand scrutiny. Before filing, taxpayers should:

  • Review income reporting: Make sure Forms W-2, 1099, and other income information is properly and completely reflected on your return.
  • Check deductions: Confirm that deductions are legitimate and supported by thorough records.
  • Review credits: Make sure you meet all eligibility requirements before claiming valuable credits.
  • Keep documentation: Maintain receipts, statements, mileage logs, charitable contribution records, and other supporting documents.
  • Respond to IRS notices promptly: Ignoring an IRS notice can create a much bigger problem than the original issue ever would have been.

What This Means for Tax Professionals

For tax professionals, the recent decline in examinations is also worth watching carefully.

A reduction in examination activity today does not necessarily predict future enforcement levels. The IRS's enforcement capacity can change rapidly as staffing, funding, technology, and compliance priorities shift. Tax professionals should therefore continue emphasizing documentation, accurate reporting, and defensible tax positionsβ€”rather than building strategies around the assumption that a client is unlikely to be audited.

The Bigger Picture

The latest TIGTA findings tell a more complicated story than simply "IRS audits are down."

Yes, individual examination starts fell 30% in fiscal 2025. But IRS collections remained at near-record levels, collection activity continued to increase, and enforcement priorities can shift quickly as agency resources change.

For taxpayers, the practical lesson is straightforward:

Don't build your tax strategy around the odds of getting audited. Build it around getting the return right.

A smaller IRS enforcement workforce may reduce examination activity temporarily, but it does not remove the taxpayer's legal responsibility to comply with federal tax law.

Final Takeaway

IRS audits may be downβ€”but your tax obligations haven't disappeared. The smartest approach is still to file accurately, keep thorough records, understand the applicable rules, respond promptly to any IRS notices, and stay prepared.

Because the question isn't simply: "Will the IRS audit me?"

It's: "If the IRS looks at my return, can I support what I reported?"

TaxClearance.Space will continue tracking IRS enforcement, tax-policy changes, and practical developments affecting U.S. taxpayers and tax professionals.

Source: Treasury Inspector General for Tax Administration (TIGTA) findings as reported August 31, 2026.