Revenue audits and other compliance interventions

In an evolving audit landscape, the right advice is crucial

Revenue audits and other compliance interventions can seriously disrupt your business – and today, they’re more frequent and complex than ever.

New e-auditing techniques adopted by Revenue have created additional challenges. E-audits involve the interrogation of businesses' electronic records, making it easier for Revenue to detect non-compliance.

As a result, the risks and penalties associated with Revenue audits have never been higher. They include:

  • Identification of additional tax liabilities
  • Payment of interest and tax geared penalties
  • Publication as a tax defaulter

Successfully managing and resolving these interventions relies on strong relationships with Revenue and a thorough understanding of both tax legislation and the Code of Practice for Revenue Audit and other Compliance Interventions.

Revenue compliance intervention, Tax services — PwC Ireland.

"44% of audits performed by Large Cases Division in 2016 involved e-Audits, yielding almost €12m."

Revenue Commissioners Annual Report 2016April 2017

What types of compliance interventions do Revenue carry out?

Revenue carry out both audit and non-audit compliance interventions. Non-audit interventions can also be disruptive, and are often the pre-cursor to an audit.

What is a Revenue audit?

This is usually carried out at the taxpayer’s premises and involves a detailed review of the relevant books and records to determine the level of compliance for each tax head under audit. More commonly, audits span multiple tax heads and focus on more than one period.

What is an aspect query?

This is typically a short, targeted intervention for the purpose of checking a particular risk identified by Revenue. An aspect query can be conducted by telephone, secure-email, letter or visit and may include a request for documentation.

What is a profile interview?

This is broader than an aspect query and is typically carried out where wider risks have been identified by Revenue. The profile interview will take place at the taxpayer’s premises, following which a decision will be taken as to whether to proceed with a Revenue audit.

What can you do to prepare for a Revenue audit?

Revenue audits, aspect queries and profile interviews can all be a serious drain on a company’s valuable resources. Preparing for and resolving these interventions effectively allows you to focus on your business, reduces the impact on your resources and minimises the final settlement.

You can minimise disruption to your business by staying informed of the changing Revenue practices and procedures and taking proactive steps to avoid disputes. By undertaking regular self-reviews, you can identify tax underpayments in advance of an audit and avail of reduced penalties. This will also help you to satisfy key obligations under the Directors' Compliance Statement and Cooperative Compliance Frameworks, both of which require companies to carry out annual self-reviews.

Where Revenue audits do occur, you should review your compliance under each tax head, disclose any underpayments identified and seek to bring the audit to a close as quickly as possible.

By doing so, you can avail of reduced penalties as set out in the Code of Practice for Revenue Audit and other Compliance Interventions.

What are the stages in a Revenue audit?

The Revenue audit process involves a number of important milestones. To ensure that these milestones are achieved, our experience shows that the process is more manageable if it is broken down into key phases.

The audit process infographic, revenue compliance intervention — PwC Ireland.

How can PwC help you prepare for a Revenue audit?

PwC's dedicated Revenue audit team, which consists of specialists from all tax heads, ex-Revenue officials and data scientists, has extensive experience helping clients through complex, multi-tax head audits. Our defined audit methodology means that we can minimise your monetary settlement with Revenue, while preventing undue disruption to your business.

We can guide you through all stages of the compliance intervention process by:

  • project managing the complete audit/compliance intervention process
  • carrying out pre-audit reviews/self-reviews to identify key risk areas involving the use of e-audit technology
  • assisting in the collation and preparation of large datasets requested by Revenue
  • assisting in the preparation of a qualifying disclosure
  • negotiating with Revenue in order to minimise the settlement of tax/interest and the mitigation of tax geared penalties
  • engaging with Revenue on contentious matters to expedite the audit process
  • advising you on the technical merits of an appeal and assisting in the preparation of documentation for submission to the Tax Appeals Commission 

Contact us

Pat Mahon

Partner, PwC Ireland (Republic of)

Tel: +353 1 792 6186

Stephen Merriman

Partner, PwC Ireland (Republic of)

Tel: +353 1 792 6505

Aidan Lucey

Director, PwC Ireland (Republic of)

Tel: +353 1 792 5833

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