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FAQ - Revenue Audit

Faqs - Revenue Audit

  1. What is a Revenue Audit?
  2. How are taxpayers selected for audit?
  3. What form will the audit take?

1 What is a Revenue Audit?

A Revenue audit is a cross-check of the information and figures shown by you in your tax returns against those shown in your business records.

Revenue audit covers the following types of tax returns:

  • Income Tax, Corporation Tax or Capital Gains Tax returns

and/or

  • The returns submitted in respect of VAT, PAYE/PRSI or Relevant Contracts Tax (RCT).

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2 How are taxpayers selected for audit?

Revenue use three methods of selection. These are:

Screening tax returns:

The vast majority of audit cases are selected in this way. Screening involves examining the returns made by a variety of taxpayers and reviewing their tax compliance history. The figures are then analysed in the light of trends and patterns in the particular business or profession and evaluated against other available information.

Projects on business sectors:

From time to time, projects are conducted to examine tax compliance levels in particular trades or professions. The returns for a large number of taxpayers in a particular sector are screened in detail and a proportion of these are selected for audit.

Random selection:

This is in addition to the first two methods. It means that all taxpayers have a possibility of being audited. Each year, a small proportion of audit cases is selected using this method.

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3 What form will the audit take?

Typically, an audit involves a series of steps, as follows:

  • On arrival, the auditor identifies himself or herself to you and explains the purpose of the audit. An indication of the length of time he or she expects to spend on your premises is also given.
  • You are given an opportunity to disclose to the auditor any inaccuracies in your tax return
  • The auditor will examine your books and records to verify that the figures have been correctly calculated and that the tax returns and/or declarations for the different taxes are correct
  • If the auditor finds the returns to be largely correct as is often the case, you will be told so as soon as this becomes clear
  • If the auditor finds that adjustments are required, he or she will quantify the adjustments and the additional tax. The details of how the additional tax arises will be discussed with you and you will also be notified in writing
  • At the final interview, the auditor will ask for your agreement to the total settlement figure
  • Once agreed, the full amount should be paid to the auditor who will issue you with a receipt.

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Testimonials

"I run my own business and after years of struggling with a demanding home life and a hectic work schedule I reached a situation whereby I was functioning poorly with both. I’d missed a couple of VAT payments and had intended to catch up at the end of the year. I missed my own deadlines and tried again to catch-up in the following year. Business became a stressful job of ‘fire-fighting’ each day’s demands, eventually pushing the issue of outstanding taxes out of my mind as much as possible, in order to concentrate on work.

That said, you always know in the back of your mind that these things don’t just go away and that it was just a matter of time before ‘they’ catch up with you. 

After a few years of letting my compliance payments slide altogether, the Revenue made contact with me and gave me an estimate of all PAYE, VAT and tax owed over the years – which ran to over 6 figures- and they wanted the money immediately. I knew I was in big trouble and looked in the Golden pages for an accountant who could help me. The name www.fixmytax.com jumped out of the page and I made contact. I was immediately reassured that they could help me. I was asked for “every bit of paper” concerning the office and all old Revenue correspondence.

The first thing fixmytax.com was to do was make contact with the Revenue on my behalf and assure them that they were handling the situation and that the liabilities were being established, even though it would take time. That took the immediate ‘knock-at-the-door’ shock and worry out of the situation. The coming weeks were spent only dealing with fixmytax, (not the Revenue) answering the odd question by phone and filling in more information for the accountant. Even though this was routine information, I was quite reassured by the fact that they were working on the whole Revenue mess and actually sorting through it for me. This took the panic and stress out of the situation and enabled me to concentrate on work. After a few weeks, accounts and figures had been prepared, which I went over with the accountant.

The accountant had dealt with the Revenue directly on my behalf and he saved over 60% off the original tax bill.

Throughout the process, the fixmytax accountant was hugely supportive to me, dealt directly with the Revenue, reduced the original tax bill considerably and most importantly, had taken the fear out of the situation and given me peace of mind knowing that good progress was being made with the Revenue, rather than hiding from it all.

The cost? Approximately 7% of the money SAVED on the original tax bill!

My Revenue mess caused me huge amounts of anxiety all the time I did nothing to resolve it. In dealing with fixmytax, they took control of the situation and proceeded to do what had to be done. I would not hesitate to recommend them to anyone worried about any aspect of taxation and financial planning for a business.

I now have a good relationship with the Revenue, fixmytax looks after not only the basics of compliance, but also the financial planning and regularly reviews the performance of the business. My business is now stronger and more focussed that ever before simply because of the level of ongoing collaboration and support that I have with fixmytax. They are the proverbial “good accountant” that every business needs.

My most valuable lesson in dealing with fixmytax is that it is far more productive and far less stressful to get a good supportive accountant to do what they do best, leaving me free to do business. Thanks, Patrick!

Satisfied Client, name and address with firm. 

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