Which business structure is most likely to get audited by the IRS? CPA Fred Passelli breaks down the latest audit rates by entity type — so you know where you actually stand.

Audit rates covered (2026 data):

• W-2 / Standard 1040: ~0.1%–0.4% (very low)

• LLC / Sole Prop (Schedule C): ~2%–4% — the highest of all

• Partnership / S-Corp: ~0.1%–0.2% (lowest)

• C-Corp: ~0.4%–0.5%

• Why rates spike once you cross $500K and $10M in income

The takeaway: don't choose your entity based on audit odds alone — but if you're a Schedule C filer, keep clean books, work with a CPA, and track every deduction.
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Disclaimer: For educational purposes only; not tax, legal, or financial advice. Audit rates are approximate and change over time.

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