IRS Data Study
Partnership Audit Rate: IRS Data Study (2026)
The headline number: the partnership audit rate is near zero. For Tax Year 2023, the IRS examined fewer than 0.05% of the roughly 4.58 million partnership (Form 1065) returns filed — fewer than 1 in 2,000. S corporations were examined at the same near-zero rate.
Key findings
- For Tax Year 2023, the IRS examined fewer than 0.05% of the roughly 4.58 million partnership (Form 1065) returns filed.
- For Tax Year 2023, the IRS examined fewer than 0.05% of the roughly 5.44 million S corporation (Form 1120-S) returns filed.
- Both pass-through entity types — partnerships and S corporations — were examined at essentially the same near-zero rate.
- A rate below 0.05% means fewer than 1 in 2,000 of these returns was selected for examination.
- These are among the lowest examination rates of any return type reported in the IRS Data Book.
- The IRS has announced plans to increase scrutiny of large, complex partnerships, so future-year rates may rise.
The figures: pass-through examination coverage, Tax Year 2023
| Return type | Form | Returns filed (approx.) | Examination rate |
|---|---|---|---|
| Partnerships | Form 1065 | 4.58 million | Fewer than 0.05% |
| S corporations | Form 1120-S | 5.44 million | Fewer than 0.05% |
Source: IRS Data Book, Table 3-1 — examination coverage for Tax Year 2023 returns. Figures rounded.
What this means in plain English
A "pass-through" entity — a partnership or an S corporation — doesn't pay income tax itself. Instead, its profits and losses "pass through" to the owners' personal returns, where the tax is actually paid. These two return types make up a huge share of all business filings: together, more than 10 million Form 1065 and Form 1120-S returns were filed for Tax Year 2023.
Out of those millions, the IRS examined only a sliver. A partnership audit rate "below 0.05%" means that for every 2,000 partnership returns filed, fewer than one was selected. For a small business owner, the practical takeaway is simple: in recent years, the odds of any single pass-through return being audited have been very low.
Why so low? Pass-through returns are complex, and auditing them has historically taken a lot of skilled examiner time. IRS examination staffing has fallen for years. When you put a small, stretched audit workforce against millions of complicated returns, the coverage rate drops toward zero.
But "low" is not the same as "no risk" — and the trend may not last. The IRS has publicly said it intends to step up examinations of large and complex partnerships, the kind with many partners and big balance sheets. If you run one of those, today's near-zero rate is a snapshot, not a promise. Clean books, filed returns, and defensible positions are still your best protection. If your return is the one that gets pulled, the IRS can look at multiple years and assess additional tax, penalties, and interest.
For context on how this compares to other taxpayers, see our studies on the corporate audit rate and the IRS audit rate for high-income taxpayers.
Got a partnership or S-corp exam letter?
Even at near-zero odds, examinations do happen — and the worst response is to face one alone. Send us the letter. An experienced tax professional will explain exactly what the IRS is asking and what your options are — free, confidential, no pressure. Learn more about IRS audit representation.
Methodology & source
All figures in this study come directly from the IRS itself. We used IRS Data Book, Table 3-1 — "Examination Coverage and Recommended Additional Tax After Examination, by Type and Size of Return" — for Tax Year 2023 returns. You can review the primary source here: IRS Data Book, Table 3-1 (Examination Coverage).
Return counts are rounded to the nearest hundred thousand (partnerships ≈ 4.58 million Form 1065; S corporations ≈ 5.44 million Form 1120-S). Examination rates are reported as "fewer than 0.05%," consistent with the IRS source. We did not estimate, model, or supplement these numbers with any outside data. Examination rates for recent tax years can rise as the IRS continues open audits, so the figures reflect coverage reported to date.
Cite this study: Clarity Tax Relief, "Partnership Audit Rate: IRS Data Study (2026)." Based on IRS Data Book, Table 3-1 (Tax Year 2023). Available at Partnership Audit Rate: IRS Data Study (2026).
Journalists and researchers are welcome to quote the key findings above with attribution and a link back to this page. Explore more in our IRS tax data studies library.
Partnership audit rate: questions, answered
What is the partnership audit rate?
For Tax Year 2023, the IRS examined fewer than 0.05% of the roughly 4.58 million partnership (Form 1065) returns filed. That is fewer than 1 in 2,000 returns — among the lowest examination rates of any return type, according to IRS Data Book Table 3-1.
Are S corporations audited more than partnerships?
No. For Tax Year 2023, the IRS examined fewer than 0.05% of the roughly 5.44 million S corporation (Form 1120-S) returns filed — essentially the same near-zero rate as partnerships. Both pass-through entity types are examined at very low rates.
Why is the partnership audit rate so low?
Pass-through returns are complex and historically labor-intensive to audit, and IRS examination staffing has fallen for years. The result is a near-zero rate today. The IRS has announced plans to increase scrutiny of large and complex partnerships, so these figures may rise in future years.
Does a low audit rate mean I don't need to keep good records?
No. A low audit rate is not the same as no risk. If your partnership or S corporation is selected, the IRS can examine several years and assess additional tax, penalties, and interest. Clean books and filed returns are still the best protection.
This guide is general information, not tax or legal advice for your specific situation. Eligibility for IRS programs depends on individual facts and circumstances; no outcome is guaranteed.