Why you might be selected for a Revenue Audit

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Revenue will not disclose the reason for selection but the following factors may be significant in how Revenue’s REAP (Risk, Evaluation, Analysis & Profiling Software) System chooses the revenue customer for audit.

• Late submission of returns
• Poor Gross Margins
• Low profits for industry
• Third party information
• VAT or PAYE discrepancies
• Random Selection
• Industry Specific

A Revenue Audit is a review of tax returns, books and records for accuracy and validity. It can be just for one year under one tax- head but where significant discrepancies occur, Revenue may extend the audit to cover other years and/or taxes.

There are different types of audit that the Revenue may carry out:

• Verification Audit- Request back up to a tax return such as medical expenses
• Desk Audit- conducted from Inspectors Office, by letter or phone, where straight forward issues are involved
• Field Audit- conducted at taxpayers place of business and is a more comprehensive review of books and records

The revenue customer will be notified of the Revenue Audit normally within 21 days.

This notice will include:

• Time and date of the audit
• Details of taxes and years to be covered by audit
• Revenues powers and identify main problem areas
• Information regarding taxpayers rights including the rights to appeal

OSK as agent for the revenue customer will also receive copy of this notice of the Revenue Audit. It is advisable to seek a meeting with ourselves prior to commencement of the audit to discuss the following points:

 Identify main problem areas

• Identify likely queries that may arise
• Identify members of staff who will answer queries
• Identify suitable location for the Revenue audit to be held
• Consider a prompted qualifying disclosure. A prompted voluntary disclosure reduces penalties and avoids publication.

Fiona Guckian is Manager - OSK Audit

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