IRS Remains Focused on Large Businesses and High-Income Individuals: What is Your Audit Risk?

Last year, the Internal Revenue Service (IRS) announced plans to prioritize audits targeting large businesses and high-income individuals. At this point in 2025, the IRS remains focused on achieving these auditing goals. Are you (or is your business) at risk of facing an IRS audit? If so, what can (and should) you do? New York tax audit lawyer Kevin E. Thorn, Managing Partner of Thorn Law Group, explains:

IRS Plans “Sizable” Increase in Audits Targeting Large Businesses and High-Income Individuals

In its announcement last year, the IRS stated that it intends to increase audit rates for large businesses and high-income individuals by “sizable percentages” over the next two years. This includes:

• Increasing audits of large corporations (those with assets of $250 million or more) by nearly 300 percent;
• Increasing audits of large and complex partnerships (those with assets of $10 million or more) by 1,000 percent; and,
• Increasing audits of high-income individuals (those with income of $10 million or more) by more than 50 percent.

These increases will translate to numerous additional audits through the end of 2026. Businesses and individuals targeted in these audits will face substantial liability in many cases—and avoiding unnecessary liability will require an informed and strategic defense.

Preparing for the Possibility of a High-Stakes IRS Audit

With this in mind, for businesses and individuals that are at risk of facing high-stakes IRS audits, a proactive approach is essential. Preparing for a potential IRS audit involves:

• Assessing Compliance – Taxpayers that are at risk of facing IRS audits should work with their tax counsel to assess their filing records and identify any instances (or potential instances) of noncompliance. This includes, but is not limited to, noncompliance related to the use of complex tax shelters.
• Assessing Risk – After assessing their compliance records, taxpayers should then work with their tax counsel to assess their risk of facing additional liability in the event of an IRS audit.
• Evaluating Options – Based on these assessments, taxpayers should evaluate their options for avoiding unnecessary liability. Depending on the circumstances, this may include evaluating their options for targeting a pre-audit resolution.
• Gathering Documentation – In all cases, avoiding unnecessary liability will require the identification, collection and preservation of all pertinent substantiating documentation.
• Targeting a Pre-Audit Resolution if Necessary – When an IRS audit is likely to result in the imposition of additional liability, pursuing a pre-audit resolution can both help mitigate the taxpayer’s liability and reduce the taxpayer’s likelihood of facing IRS scrutiny in the future.  

Contact Us to Schedule a Consultation with New York Tax Audit Lawyer Kevin E. Thorn

If you need to know more about the IRS’ ongoing efforts to target large and high-income taxpayers, we invite you to get in touch. New York tax audit lawyer Kevin E. Thorn has extensive experience representing large corporate clients and high-income individuals in high-stakes federal tax matters. To schedule a consultation with Mr. Thorn, call us at 914-534-6004 or contact us online today.