Auditing rates have crashed in recent years, actually. The odds of being audited are about 1 in 1500 if you don't have more than about $100,000 in income. There's also audits due to "no reported income" and people who have assets well beyond what they're reporting in income, and on people who used to file taxes but they haven't heard from them in years.No clue. I give it to my CPA. He does his thing. I sign. Done.
Interesting (to me anyway) story. Run if you choose. My dad was a doctor. Doctor's are audited on average every 7 years, or at least were in his time. My mom did all his books, accounting and taxes. Audit letter comes from IRS. Says bring A through R or similar long list of records and stuff and be prepared for 2 days. My mom takes it all and goes at 9 the appointed morning. She's home about 11. We asked if she already was on lunch. Nope. Finished. What? The guy spent about 90 minutes looking at her records etc. and said they were the best set he'd ever seen, that she obviously knew more than most of his co-workers, and that she should leave and let him move on to someone they might get more money out of. In 43 years practicing medicine after that my dad was never audited again. I don't know but I suspect that auditor flagged his account saying if my mom signed as preparer to not waste time auditing.
Most of the really nasty audits are on people who make well over $100,000 a year, and usually millionaires on up.
They count as "audits" things as simple as forgetting a tax form on your return and the IRS correcting it for you and sending you a CP2000 letter and saying "We corrected it. Here's what you owe us." People of wage earner level income who get audited, it's usually a CP2000.
Now, where you can run into potential major civil penalties are failure to file, failure to pay, etc. which are civil penalties and interest that can really jack up your tax bill, so you need to file and you need to do it honestly and if you know what's good for you, you'll file by the deadline even if you need to set up a payment program. And stick to the program.
Where it gets criminal, potentially, is if you get a letter or visit from the CID, which means you did something really bad. If you give them a major understatement of your income (which they call substantial under-reporting, which is 25% or more of the income that should have been on the return), but usually they want the money more than they want you in jail. So they'll whack you with another huge penalty and interest.
Prison is for people who deliberately cheat on their taxes, it was egregious, they clearly meant to do it, and honestly if it starts out with civil penalties and you still don't pay, then it could become a criminal matter.
Most people who work for a living are in almost no danger if they wait for all their tax forms, enter them correctly, and only take deductions and credits they are honestly entitled to. If you have questions, the IRS.gov website has information about almost every deduction and credit.
TurboTax sells "audit defense", but most people will never be audited. The "audit defense" doesn't pay your tax bill if you get audited. And all it does is have someone talk about your tax return to the IRS. So if you get a CP2000 letter, those are easy, If you put the income somewhere on the return, choose the option to contest it and speak to an IRS agent and they'll tell you where to go from there. If you messed up, sign and pay if you owe that money.
The IRS will reach out to you through the mail. They never call you, even though the tax return software might ask you to give them your phone number. They never threaten you. They don't have foreign accents. They don't demand Starbucks gift cards and say the police are on their way to send you to prison, send you there for fifty years.
You don't have to ride a magic carpet and beg and plead with the king of the potato people to spare you. (I got that one from Red Dwarf: Quarantine)