Tax Audit Do’s and Dont’s

February 7th, 2013 by admin

by: carlainspiration |

A tax audit can be very stressful for companies of all sizes. It is so easy for what should be a simple process to be dragged out because of companies being ill prepared. Needless-to-say but the best form of preparation is making sure that your books are always up to date. A monthly or yearly service from a professional tax consultant or accountancy firm goes a long way to being prepared for an audit.

If Revenue has chosen to audit your business then you will need to contact a tax consultant immediately. As mentioned above, ideally you should already have a dependable service provider that can help guide you through the process.

A financial support service such as a tax consultant should be able to provide the following support before the Tax Auditors com knocking on your door:
• Review the information provided by Revenue and brief you on your rights and obligations.
• Carefully review all relevant transactions in the period under review.
• Check that the transactions have been treated correctly in line with legislation and Revenue statements of practice.
• Investigate whether transactions outside the period under review warrant disclosure to Revenue.
• Identify the documents needed to support the deduction being questioned by Revenue.
• Assist you in preparing a written voluntary disclosure.
• Give you helpful advice on the basic dos and don’ts of how to deal with the Revenue Inspectors during the meeting.

Once you have done your preparation for the Audit you will need to keep the following tips in mind on the actual day of the audit. Answer any questions honestly and briefly without arguing. Never give
Revenue more or less information than is requested. If you are evasive and avoid answering what is being asked you will be setting a suspicious tone for the meeting.

Stay calm and do not try to strike up casual conversations. You are representing your company to the authorities and will need to keep a professional tone throughout.

From a documentation perspective you will need to be careful with copies and records of documentation and activities. For example you must never give the tax inspector the only copy of any document. Keep copies of any documentation that you may sign. Make sure that you have all the original documentation available on file whilst only providing copies to the inspector. Lastly you will need to keep your own meeting minute or some sort of record of the audit itself. Keep a list of documents provided, questions asked from both sides and answers for your own reference.

If the support is available to you, why not request to have your tax consultant with you when your company is audited? It may just make the difference between a speedy audit and a drawn-out inquisition.