# Revenue Audit Any advice



## cremeegg (26 Jul 2011)

I have a Revenue audit coming up next month. I have no major concerns just a general anxiety at being put under the spotlight, and two specific issues.

I have rental income and looking back on my accounts I realise that the interest expense is incorrect and I have deducted too much, also I incurred some repairs expenses but have no receipt for the money I paid the painter.

Any advice or observations would be welcome


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## aoc (27 Jul 2011)

been through 2 audits where i work.. its stressful even if you have nothing to hide. talk to your accountant, they will advise about making a voluntary disclosure when the auditor arrives. they may not check every single invoice, they take a selection of months.. so your painting receipt may go unnoticed...

good luck.. they are very professional and pleasant.


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## J.Ryan (27 Jul 2011)

Did you pay the painter by cheque, if so get a copy of the paid cheque from the Bank and include that as your receipt.

Make a prompted voluntary disclosure regarding the interest,  they will check that.


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## T McGibney (27 Jul 2011)

You will also need to double check previous years returns to ensure that they are correct. 

A prompted voluntary disclosure must cover all the taxpayer's outstanding liabilities, otherwise it is invalid.  

See the Code of Practice for Revenue Audit and seek professional advice if necessary.


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## Gekko (27 Jul 2011)

T McGibney said:


> A prompted voluntary disclosure must cover all the taxpayer's outstanding liabilities, otherwise it is invalid


 
That's incorrect.

It's likely that the OP's "offence" will be categorised as "careless" rather than "deliberate".

Accordingly, the disclosure is only required to deal with the tax(es) and period(s) that are the subject of the audit.

In my view the OP should seek the assistance of an ITI registered tax consultant.


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## T McGibney (27 Jul 2011)

Thanks for the most useful clarification 

From the Code of Practice, pages 21-22



> In addition –
> • all qualifying disclosures (prompted and unprompted) in the  deliberate
> behaviour/deliberate default category of tax default must state the
> amounts of all liabilities to tax and interest, in respect of all
> ...


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## Bronte (2 Aug 2011)

Gekko said:


> Accordingly, the disclosure is only required to deal with the tax(es) and period(s) that are the subject of the audit.
> 
> .


 
If you disclose something in one year would revenue not then be suspicious and check other years?


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## Gekko (2 Aug 2011)

Bronte said:


> If you disclose something in one year would revenue not then be suspicious and check other years?


 
Of course, but the point is what should be disclosed in order for the disclosure to be a "qualifying disclosure" for tax purposes.  If for whatever reason Revenue discover issues in relation to other taxes and periods, the taxpayer shouldn't lose the mitigation he or she has received as a result of the qualifying disclosure.  This wasn't always the case (a new Revenue Code of Practice recently replaced the "old" one).


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## Bronte (4 Aug 2011)

Do you have the new Code of practice Gekko.  

If I understand you correctly it means when you disclose something incorrect on a return and they are leninent on the tax and penalties on that, later if they find something else wrong they cannot go back on the mitigation for that which you have voluntarily disclosed.  But in the past if you disclosed something and they then found something else wrong all bets were off?


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## mandelbrot (4 Aug 2011)

Bronte said:


> Do you have the new Code of practice Gekko.
> 
> If I understand you correctly it means when you disclose something incorrect on a return and they are leninent on the tax and penalties on that, later if they find something else wrong they cannot go back on the mitigation for that which you have voluntarily disclosed. But in the past if you disclosed something and they then found something else wrong all bets were off?


 

http://www.revenue.ie/en/practitioner/code-of-practice-revenue-audit.pdf


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## WizardDr (4 Aug 2011)

How do you know the interest expense is wrong as in have you spotted a mistake?


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## Bronte (5 Aug 2011)

He probably went back to double check his figures and then found it.  In my case once the bank had sent me an incorrect figure for interest.


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## Gekko (5 Aug 2011)

Bronte said:


> Do you have the new Code of practice Gekko.
> 
> If I understand you correctly it means when you disclose something incorrect on a return and they are leninent on the tax and penalties on that, later if they find something else wrong they cannot go back on the mitigation for that which you have voluntarily disclosed. But in the past if you disclosed something and they then found something else wrong all bets were off?


 
Broadly speaking, yes. For cases involving deliberate default (basically fraud/neglect/systematic stuff) all bets are still off.

There's obviously more to it than this but the benefit of a qualifying disclosure is primarily mitigation in relation to "the three Ps" - Penalties, publication and prosecution.  A reduced penalty applies, Revenue won't publish the taxpayer's name and Revenue won't seek prosecution in relation to the offence (although this doesn't mean that other arms of the State won't seek prosecution).


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## confusedpaye (24 Aug 2011)

Hi, hope I'm in right place, I've been notified that revenue are to call to me requesting bank statements for two years and all details relating to my house build.

I'm a PAYE worker i hired a builder to a lot of the work but paid a lot of cash for materials for other works i did myself (painting, attic conversion, i also bought tools etc for my new man garage!!)

I'm a little worried that i dont have enough receipts to show the tax man for these bits, only because i never knew i was supposed to keep them. the builder is fine i've got all his invoices and can show the cheques that pay him.

how much can revenue demand from me? 

thanks


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## Gervan (24 Aug 2011)

I'm a bit confused too. I don't see why revenue would be likely to ask you to pay tax on the costs of building your own house? Perhaps they are after the builder, who didn't declare the cheques that you paid him?


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## Gekko (24 Aug 2011)

Gervan said:


> I'm a bit confused too. I don't see why revenue would be likely to ask you to pay tax on the costs of building your own house? Perhaps they are after the builder, who didn't declare the cheques that you paid him?


 
+1

Did you build a rental property, borrow the money to do so and claim a deduction for interest arising on the loan?


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## J.Ryan (25 Aug 2011)

Did your declared earnings support the cost of the build?

Sometimes the Revenue look at something as simple as lifestyle against reported earnings, another possibility is that a neighbor reported you for spite.

It could be that the builder was being audited and was asked for the source of particular receipts, which just happend to be you.  I was at an audit once for a client many years ago, where the Revenue Official asked for photocopies of 3 or 4 purchase invoices, where he said he was going to audit them also.


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## hastalavista (25 Aug 2011)

confusedpaye said:


> Hi, hope I'm in right place, I've been notified that revenue are to call to me requesting bank statements for two years and all details relating to my house build.
> 
> I'm a PAYE worker i hired a builder to a lot of the work but paid a lot of cash for materials for other works i did myself (painting, attic conversion, i also bought tools etc for my new man garage!!)
> 
> ...



Re to call to me

do you mean at home?

If so they will look for a lifestyle/income mismatch.

I was involved in a Residential property tax audit many years ago where my client asked me to attend when the revenue and the revenue estate agent arrived to inspect the house  as my client had refused to pay the RPT based on their valuation.

I had never been in my client's house and when I arrived the first thing I saw was a Chippendale antique side board, c iep 40,000...

There were paintings etc and when the Revenue guy arrived he lost all interest in the property tax.

It cost my client 100,000


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## mandelbrot (25 Aug 2011)

hastalavista said:


> Re to call to me
> 
> do you mean at home?
> 
> ...


 
Ah it warms the cockles of my heart to hear that! 

Good enough for him.


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## mandelbrot (25 Aug 2011)

Gervan said:


> I'm a bit confused too. I don't see why revenue would be likely to ask you to pay tax on the costs of building your own house? Perhaps they are after the builder, who didn't declare the cheques that you paid him?


 
I'm confused too, it's not an approach I'm familiar with; the request for all the bank statements etc seems to suggest something a bit more than that they're only interested in the builder...


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## shinners (25 Aug 2011)

I work in small accountancy practice, we recently had a  client under audit &  Revenue visted a large number of the clients customers to verify sales invoices & payments. they requested to look at invoices cheque books and bank statements of the clients customers, I think it is a new tactic (Revenue seem to be getting very proactive lately.) to verify information when they dont trust the indiv under audit.  if confusedpaye is not registered as self employed this could be the case.

hastalavista, thats a great story.


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