You can be audited more than once. Although overall examination coverage remains low, the IRS’s procedures, statutes of limitation, and modern analytics make repeat contact a real possibility—mainly if a first audit produced adjustments, revealed filing gaps, or flagged patterns now targeted by LB&I campaigns or AUR information‑return matching. The 2024 IRS Data Book reports that 505,514 audits were closed in FY 2024, with overall coverage rates of approximately 0.40% for individual returns and 0.66% for corporate returns. High-income and large-entity coverage is significantly higher, and the agency plans sizable rate increases for these groups by Tax Year 2026.
A prior audit materially increases the likelihood that other years or related tax returns will be examined. Examiners are required to perform “Required Filing Checks,” which include analyzing and, when warranted, retrieving prior, subsequent, and related returns. IRS policy designates this as a “primary responsibility” in every audit, and agents must document why they did not expand if adjustments were proposed or if large, unusual, or questionable items appear in other years. Thus, a first audit that identifies issues often leads to additional audits in subsequent years or entities under the same control.
Baseline Coverage—and Why Certain Taxpayers See Repeat Exams
Coverage is uneven. For Tax Year 2020 individual returns, the IRS reports an 8.8% coverage rate for taxpayers with total positive income of $10 million or more, compared with 2.3% for those with $1 million to under $5 million. By contrast, coverage for middle-income filers is a fraction of one percent. Corporations overall were covered at 0.66% and individuals at 0.40% across Tax Years 2014–2022, but these averages mask the agency’s strategic focus on high-risk segments.
That focus is intensifying. In May 2025 update to its Strategic Operating Plan, the IRS announced it expects by Tax Year 2026 to nearly triple the audit rate for large corporations with assets over $250 million to 22.6% (from 8.8% in 2019), increase the rate for large, complex partnerships (assets over $10 million) ten‑fold to 1% (from 0.1% in 2019), and lift the rate for individuals with total positive income over $10 million to 16.5% (from 11% in 2019). The IRS reiterated that it does not plan to increase audit rates for small businesses and taxpayers with income under $400,000. These planned increases, combined with the mandatory filing‑check rules, naturally raise the odds that a taxpayer in a targeted cohort will face more than one examination.
If you have substantial income, utilized sophisticated tax planning structures, or have undisclosed foreign accounts, you may be in the IRS crosshairs. Seek support and guidance from our dual-licensed Tax Attorneys & CPAs by calling the Tax Law Offices of David W. Klasing at 800-681-1295 or clicking here to schedule a reduced-rate initial consultation.
How a First Tax Audit Leads to a Second
The most common path to a second high-risk tax audit is expansion from the first. If an examiner proposes adjustments, identifies badges of noncompliance, or detects mismatches during comparative analyses, the IRM directs the agent to evaluate other years and related returns (for example, partner/partnership, shareholder/S corporation, owner/sole proprietorship, or payroll and excise returns). The agent must document the analysis and the decision, and SB/SE field examiners must use Lead Sheet 200 for multi-year and related returns. In short, the first audit is not a silo; it is a gateway to a broader compliance review.
LB&I campaigns also drive repeat examinations. Campaign pages frequently state that examinations will cover the campaign year “and any related and subsequent year returns.” When a return is selected under a campaign (for example, IRC §965 transition tax or life insurance reserve campaigns), teams are instructed to examine related and subsequent years and identify other material issues. That directive, coupled with LB&I’s AI-assisted selection of large partnerships beginning in 2023 and expanding thereafter, increases the probability that once a large filer is in scope, it will remain under scrutiny across multiple years.
Information Returns, AUR, and Research Selections
Even if you have been audited, third-party information matching can trigger a new contact. In FY 2024, the IRS received almost 4.6 billion third-party information returns (about 93.9% electronically), and the Automated Underreporter (AUR) program closed nearly 1.2 million cases. CP2000/AUR notices are not formal audits; however, unresolved discrepancies can be routed to Examination, which may result in another review of the same taxpayer, often for a different year.
Occasionally, selection is purely research-driven. Under the National Research Program (NRP), the IRS examines a statistically valid, random sample of returns to measure compliance and recalibrate DIF/UIDIF scoring models. NRP selection is independent of perceived risk, so a taxpayer previously audited for cause can later be chosen again at random for research. TIGTA confirmed the randomness of NRP selection for recent studies, and the IRM describes NRP as stratified random sampling with examinations that follow standard procedures while capturing extra data.
Statutes of Limitation Make Later‑year Audits Common
A closed audit does not immunize other years. The general assessment statute is three years from filing, extended to six years if the taxpayer omits more than 25% of their gross income (or certain foreign asset omissions exceeding $5,000), and is unlimited in cases of fraud or when no return is filed. The statute can also be extended by written consent (Form 872), and special rules apply to partnership adjustments under the BBA and numerous international information‑return failures. These windows allow the IRS to open or reopen examinations of other periods even after one year has passed.
When a Second Audit Turns Criminal
If an examiner develops firm indications of fraud, the procedure requires consultation with a Fraud Technical Advisor and, where criteria are met, referral to clandestine IRS Criminal Investigation (CI) on Form 2797. CI pursues cases with strong prospects for conviction. In FY 2024, CI initiated 2,667 investigations, referred 1,794 for prosecution, obtained 1,669 indictments/informations, and recorded 1,571 convictions; 75.7% of those sentenced were incarcerated in some form. Those figures translate to a conviction-to-indictment ratio of roughly 94%, underscoring the importance of early containment and preservation of privilege once fraud indicators emerge.
If you know or suspect that you are the target of an IRS or California criminal tax investigation, contact the dual licensed Civil and Criminal Tax Defense Attorneys & CPAs at the Tax Law Offices of David W. Klasing. If IRS Special Agents have contacted you, don’t wait. Call us at 800-681-1295 or complete our online contact form here to schedule a reduced-rate initial consultation. Let us help you navigate the complexities of your case and achieve the best possible outcome.
California State–Federal Spillovers Can Produce “Second” and “Third” Audits
Federal and California state agencies (FTB, CDTFA, EDD) share data extensively. Under IRC §6103(d) and the IRS Governmental Liaison programs (including the Governmental Liaison Data Exchange Program, GLDEP), federal audit results and other return information are transmitted to state tax agencies, and states reciprocate with data used to identify federal noncompliance. California state requires taxpayers to report final federal changes within six months; failure to report extends California’s assessment period, and timely reporting gives the FTB two years to issue an assessment (four years if reported late; unlimited if not reported). As a practical matter, a federal adjustment often begets a state audit, and a state finding can be relayed back to the IRS, prompting a new high-risk federal tax audit.
So What Are the Real “Chances” of Being Audited Twice?
There is no single percentage. The chances depend on (i) who you are (income, assets, and entity type), (ii) what the first exam found, (iii) whether the return falls within a targeted campaign or shows patterns flagged by analytics, (iv) how much statute remains open (including any consents you signed), and (v) whether federal–state data exchanges or information‑return mismatches generate new leads. For a mid-income individual with clean results, the odds of a repeat audit remain low, given the roughly 0.40% overall individual coverage rate. For high-income individuals, large corporations, and large partnerships—mainly where a first exam produced adjustments—the odds are materially higher and are poised to increase under the IRS’s FY 2025 SOP update.
Contact the Tax Law Offices of David W. Klasing if You Are Facing—or Want to Avoid—A Second IRS Audit
At The Tax Law Offices of David W. Klasing, our team of dual-licensed Tax Attorneys and CPAs is purpose-built to stop a prior audit from snowballing into new years, state spillovers, or, at worst, a life-altering criminal tax investigation. We run a privileged, examiner-style review of all still‑open years and related returns, mirror the IRS Required Filing Checks to see what an agent would “pick up,” reconcile books to filed returns, and preempt third-party mismatches before they feed AUR or Examination. We maintain a strictly civil engagement by preserving attorney–client and work-product protections, and engaging accountants under Kovel, while coordinating federal and California state tax exposure—particularly FTB and CDTFA follow-ons—to deliver a single, integrated resolution focused on damage control, finality, and business continuity.
If historical exposure exists, our dual-licensed Tax Attorneys and CPAs at the Tax Law Offices of David W. Klasing design proactive solutions that cap civil liability and avert criminal risk: ERC clean‑ups, employment‑tax pyramiding and trust‑fund exposure, worker‑classification disputes, partnership issues under the BBA and LPC, CAP participation questions, international items (subpart F/GILTI, foreign tax credits, withholding), digital‑asset reporting, and listed/TOI transactions such as micro‑captives. We negotiate closing agreements, manage high-risk eggshell and reverse-eggshell audits to avoid IRS-CI referrals, and efficiently sequence statute closures.
If you have already been audited—or you suspect the IRS or a California state tax agency is lining up another year—contact the Tax Law Offices of David W. Klasing before anyone communicates with the government. We will deliver a comprehensive risk assessment, a timeline to close remaining exposures, and a step-by-step plan to help you avoid repeat examinations. Contact the Tax Law Offices of David W. Klasing for a reduced-rate initial consultation HERE or call us at 800-681-1295.
