Offers in compromise got harder to win
The IRS received 38,797 offers in compromise in fiscal 2025, up 15.5% from 33,591. It accepted 5,464, down from 7,199.
That works out to about 14 accepted for every 100 received, down from about 21. The total accepted fell from $163.4 million to $98.1 million. These are yearly counts, so an offer accepted in 2025 may have been sent in earlier.
An offer in compromise is a proposal by a taxpayer to the federal government that would settle a tax liability for payment of less than the full amount owed. Absent special circumstances, an offer will not be accepted if the IRS believes the liability can be paid in full as a lump sum or through a payment agreement.
If you’re weighing an offer, start with what the offer letters mean and the payment plan calculator.
Source: IRS Data Book 2025, Table 4-1, Delinquent Collection Activities, Fiscal Years 2024 and 2025
Investigations of people who didn’t file nearly quadrupled
The IRS opened 2,501,667 new delinquency investigations in fiscal 2025, about 3.9 times the 639,143 it opened in fiscal 2024. Open investigations at year end grew from 2,050,877 to 3,234,815.
A delinquency investigation is opened when a taxpayer does not respond to an IRS notice of a delinquent return.
A letter about a missing return is the start of this process. See CP59 and LT16.
Source: IRS Data Book 2025, Table 4-1, Delinquent Collection Activities, Fiscal Years 2024 and 2025
Liens and levies rose. Seizures stayed rare.
The IRS filed 214,099 notices of federal tax lien in fiscal 2025, up 8.7%. Levies the IRS requested on third parties rose 8.1% to 339,137.
Seizures went the other way: 50 in fiscal 2025, down from 71.
Represents the number of seizures conducted by the Field Collection program.
See the guides to Letter 3172 (lien filed) and LT11 (final notice before levy).
Source: IRS Data Book 2025, Table 4-1, Delinquent Collection Activities, Fiscal Years 2024 and 2025
Millions of people are on IRS payment plans
The IRS set up 3,160,047 new installment agreements in fiscal 2025. At year end, 4,870,810 taxpayers had one, up from 4,642,420. The IRS collected $17.88 billion from accounts in installment agreement status.
Penalties and interest continue to accrue until the balance due has been paid in full.
Estimate your options with the payment plan calculator.
Source: IRS Data Book 2025, Table 4-1, Delinquent Collection Activities, Fiscal Years 2024 and 2025
Failure-to-pay penalties: many assessed, fewer removed
For individuals, estates and trusts, the IRS recorded 24,251,980 failure-to-pay penalty assessments in fiscal 2025, totaling $12.09 billion. It recorded 3,149,546 abatements, totaling $5.03 billion.
That is about 13 abatements for every 100 assessments, but they aren’t always the same penalties.
Abatements of penalties included here were recorded in FY 2025 regardless of the tax year to which the penalties may apply.
The IRS may approve an abatement of a penalty for: IRS error; reasonable cause; administrative and collection costs not warranting collection of penalty; discharge of penalty in bankruptcy; and the IRS’s acceptance of partial payment of assessed penalty.
Estimate yours with the penalty calculator.
Source: IRS Data Book 2025, Table 4-2, Civil Penalties Assessed and Abated, Fiscal Year 2025
Low earners are audited more than the middle
For tax year 2021, the IRS examined 0.3% of individual income tax returns. Returns with income under $25,000 were examined at 0.5%. Returns with $25,000 to $50,000 were examined at 0.2%, and returns with $100,000 to $200,000 at 0.2%. Returns claiming the earned income tax credit were examined at 0.7%.
Tax Year 2021 is the most recent year outside of the normal statute period.
Later tax years show lower rates for now, because audits of those years are still being opened.
The percentage of audits of returns filed for relatively recent tax years may appear low because as of the end of the fiscal year, relatively few examinations had been opened or closed yet.
Got an audit letter? Start with Letter 566.
Citing these numbers
Reporters and writers are welcome to use these numbers. Please cite the IRS Data Book table named under each section, and link to this page: https://whatismyirsletter.com/irs-statistics.
Figures checked against the IRS spreadsheets on October 29, 2026. General information only, not legal advice.