How to: Prepare for a Revenue Audit
The best way to avoid being selected for an audit or review is to get yourself off the Revenue’s risk radar. If you are selected for a review, there are still things you can do to reduce the time, cost and tax exposure.
- Plan ahead: The time to start planning for a Revenue Audit is well before the letter arrives. You wouldn’t wait until the day you get your holidays to book your hotel. Don’t wait for the Revenue letter to arrive to start plan for a possible Revenue audit.
- What if you are selected for Revenue audit? Once the letter arrives there is one thing you can’t do – ignore it. Be proactive. Start dealing with it straightaway.
- Narrow your focus: Check the tax year or period selected. Concentrate on that. Revenue reviews tend to relate to a specific time period and even to a specific tax type in that time period.
- Should you ask to defer the audit? Definitely – if it clashes with your busy work period, pre-booked holidays or would put an undue strain on you and your staff pulling the information together in the timeframe given.
- Get a pre-visit review done: No matter how organised you are there will be things you may have overlooked when filing your tax returns, both good and bad. Get your accountant or tax advisor to go over your books. The good will help offset the bad.
- Summarise: All the work you will do in the weeks before the Revenue Auditor arrives is very useful and not just for them. You will find out a lot about your business and how well the books are being kept. Uncertainty is removed. You will know where you stand and can face the tax inspection meeting with confidence.
- Write your speech: Now you can direct the meeting and set the tone. You are ready to argue your case and defend yourself if necessary.
- Stay in control: By planning ahead, you will have been well prepared long before the letter arrives. Preparation removes uncertainty. You will know before the Revenue Auditor turns up exactly how to deal with them, and that is half the battle!
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