Preparing for a Revenue Audit or Investigation

Did you know that in 2015 the Revenue made 461,000 interventions with taxpayers of which 6,612 were audits? The tax yield on Revenue audits was €327m. Over 65% of those taxpayers audited made settlements with the Revenue.

A Revenue intervention can range from a phone call from a Revenue official, to a letter querying a particular item, to informing a taxpayer of a site visit.

How are taxpayers selected for audit? The Revenue considers a taxpayers compliance history and also analyses the figure submitted against industry and national trends. This allows them to identify areas of risk and inconsistency. In addition Revenue will at time target specific industries, transaction types, or taxpayers e.g. builders or medical consultants. However any taxpayers can be selected for a random audit.

A taxpayer who receives a letter from the Revenue should seek the assistance of their tax advisor. The letter will normally be specific to a particular tax year and to a particular tax. However, Revenue do have the option of enlarging the scope to other years or taxes if they have sufficient grounds to do so.

What to do? Discuss the visit with your tax advisor and identify if there are any discrepancies in your returns. At this point you may wish to make a voluntary qualifying disclosure. In doing so you can limit the amount of overdue interest and penalties that may apply.

The Tax Man can assist you in preparing for a Revenue audit.

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