It is true that an S-corp or partnership is less likely to be audited than a sole proprietorship.  However, the IRS is increasing pass-through entity audits as their computers become more powerefu.  Also, several years ago the IRS was directed to increse trhe audits of pass through entities like S-Corporations and they are still doing this.  However, just because a company is being pulled for audit does not necessarily mean the IRS thinks it did something wrong.  Many companies are pulled at random by the IRS computers that look at different factors to pull sample companies for audit