IRS Turns Up the Heat on High-Income Earners in 2026

If you earn more than $400,000, your tax return may be under closer scrutiny. Backed by funding from the Inflation Reduction Act (IRA), the IRS has been ramping up enforcement on high-income individuals, particularly those making $1 million or more, and especially those earning $10 million or more, who face a projected 16.5% audit rate through 2026.

 

Although over $20 billion in IRA enforcement funding has been rescinded, IRS enforcement continues with the help of AI and data-matching tools, allowing the agency to spot discrepancies and patterns faster than ever before. IRS Commissioner Werfel has also reiterated a pledge: no increased audit rates for filers below the $400,000 income threshold .

 

So what is the IRS focusing on now?

 

Common IRS Audit Triggers for High-Income Filers

  1. Lifestyle doesn't match reported income. Private jets, luxury homes, or large-scale spending may prompt a "lifestyle audit" if reported income doesn’t align. The IRS uses data analytics to flag returns where income seems inconsistent with spending patterns.
  2. Charitable deductions over 60% of AGI. Donations that exceed 60% of your Adjusted Gross Income, especially non-cash items or appreciated assets, can raise red flags. If you claim significant deductions without appraisals or required documentation, expect scrutiny.
  3. Complex business structures. Pass-through entities (such as partnerships or S corps) are increasingly under review. IRS data shows audits of large partnerships rose by over 50% post-IRA, especially those with $10M+ in assets, which now face audit rates over 1%.
  4. Offshore accounts and foreign income. Failing to file FBAR (FinCEN Form 114) or Form 8938 can result in penalties of $10,000 or more per violation. The IRS continues to prioritize unreported foreign assets, particularly for high-net-worth filers with international holdings.

How Boeshaar Law Can Help

 

Attorney Robert Boeshaar brings 25+ years of tax law experience, including 14 years as an IRS attorney. He understands how audits are built and how to dismantle them.

 

We assist individuals and small businesses with:

  • IRS audit and appeal defense
  • Pre-filing legal review of complex returns
  • Strategic responses to IRS notices or enforcement actions

Clients frequently achieve outcomes such as penalty abatements , manageable payment plans , or even full audit resolution , reflecting our proven track record and client testimonials.

 

Protect Yourself from Costly Mistakes

 

Whether you’re filing soon or already under audit, here are some smart steps:

  • Keep excellent records. Retain receipts, valuations, donation letters, FBAR filings, and anything that supports your return.
  • Know the norms. Compare your deductions to IRS averages for your income level.
  • Review before filing. Complex returns deserve expert attention, especially if you own multiple entities, donate large gifts, or earn foreign income.
  • Leverage free IRS resources. IRS Publication 17 is a helpful guide for understanding current filing rules.

If your return is under the microscope or you’d rather not wait to find out, our team is here to help you navigate IRS enforcement with clarity, strategy, and confidence.

 

Feel free to book your confidential consultation today and take the first step toward resolution.