The IRS released its Data Book for fiscal year 2024. It’s the 30th anniversary of these annual data books, and it tells us a lot about tax filings, audits, and more. For example, in FY 2024, the IRS collected approximately $5.1 trillion in gross revenues, generating about 96% of the funding that supports the federal government’s operations. Here are some selected highlights (remember 2024 means fiscal year 2024 ending September 30, 2024). This information may seem like just a bunch of numbers, but it shows whether the number of businesses is rising or falling, whether their tax payments are higher, and whether there is greater audit risk for business entities.
Business income taxes
Business income taxes represented 11.1% of total collections. But this percentage does not include taxes paid by owners of pass-through entities; their taxes are part of individual income taxes. Corporate income taxes in 2024 were over $565 billion (up from over $456 billion in 2023).
Over 428,000 refunds were issued to businesses. Since S corporations and partnerships are pass-through entities (with limited exceptions), these refunds went to C corporations.
Business return filings
In 2024, there were nearly 267 million tax returns of all types filed. Of these were:
- C corporations: 2,252,027 income tax returns in 2024 (down from 2,464,836 in 2023)
- S corporations: 6,080,370 income tax returns in 2024 (up from 5,882,030 in 2023)
- Partnerships: 5,100,408 income tax returns in 2024 (almost the same as 5,117,987 in 2023)
- Employment taxes: 33,662,190 employment tax returns (Forms 940, 941, 943, and 945) (down from 36,286,127 in 2023)
- Information returns: Nearly 4.6 billion returns (W-2s, 1099s, etc.)
The Data Book does not call out the number of Schedule Cs filed by sole proprietors and independent contractors.
Note: The Data Book contains a state-by-state break down of filings. For example, California showed the most S corporation income tax returns, followed by Florida, and then New York and Texas.
Audits
The IRS conducts different types of audits. Field audits entail agents going to a business location to examine the books and other documentation. Correspondence audits involve questions through the mail; the vast majority (77.9%) of audits are this type.
In 2024, 0.66% of corporation returns filed were examined by the IRS. But the audit rate varied according to the size of the corporate balance sheet. For example, the rate for a C corporation with balance sheet assets between 0 and $250,000 was only 0.2% and for those with $250,000 to under $1 million it was 0.1%.
The audit rate for S corporations and partnerships was so low that it was not statistically significant.
IRS outreach services
In 2024, the IRS hosted 497 taxpayer outreach events for small business and self-employed taxpayers, many of them virtual. These events attracted 219,654 participants.
The IRS continues to publish its e-newsletter for small businesses. In 2024, there were over half a million subscribers. If you want to subscribe to this newsletter, which is sent via email every other week or so, register here.
Final thought
“Statistical thinking will one day be as necessary for efficient citizenship as the ability to read and write.” ~ H.G. Wells
These numbers from the IRS tell us a little about businesses in the U.S.: how many there are (based on the number of returns filed), how much they pay in taxes collectively, and the extent of their audit risk. Maybe these aren’t the most fun things to think about, but here they are!
Find additional information regarding the IRS and small business in this list of blogs here.
