May 2024

Sideman Tax Alert: IRS Plans Major Increase in Audit Rates


On May 2, 2024, the IRS released an update on its Strategic Operating Plan which includes among its main objectives to “Focus expanded enforcement on taxpayers with complex tax filings and high-dollar noncompliance to address the tax gap.”  

Specifically, the IRS “anticipates increasing audits on the wealthiest taxpayers, large corporations and large, complex partnerships by sizable percentages for tax year 2026” with nearly triple audit rates on certain large corporations, ten-fold audit increases on certain large, complex partnerships and an increase in audit rates “by more than 50% on wealthy individual taxpayers with total positive income over $10 million, with audit rates going from an 11% coverage rate in 2019 to 16.5% in tax year 2026.”

These ramped up audit efforts are a continuation of the IRS’s recent efforts to narrow the over $600 billion “tax gap” through issuing compliance letters to high income non-filers and focusing on employee retention credit claims, among other actions.

The tax dispute lawyers at Sideman & Bancroft have extensive experience handling IRS audits and criminal investigations, as well as providing tax resolution services.  If you have questions, please contact Sideman & Bancroft Tax Group leader Steve Katz at: (415) 392-1960 or email