Unprompted Disclosure

[hunghang]

My business has been selected for audit for all taxes years 2011 & 2012.

While both these years are substantially complete and accurate from a tax point there was an overclaim on expenses made in 2010. If a disclosure is made prior to the commencement of the audit in relation to 2010 will this be treated as an unprompted disclosure when 2010 is presently outside the scope of the audit?

 

[Bronte]

I don't have the answer, but you seriously need an accountant.

 

[Setanta12]

Cannot recall the rules, but if there's nothing in 2011 or 2012 to lead them to look at 2010; you may be in the clear ... for the moment.

But if you 'fess-up, it should do wonders for your audit-risk level.

As Bronte was saying you do need an advisor - opt for a Chartered Tax Advisor from the Irish Taxation Institute (most decent-sized accounting firms will have one employed). One-man-band accountants generally don't. Accountants usually don't know the finer points of tax-law or how to deal with Revenue.

 

[Bronte]

. Accountants usually don't know the finer points of tax-law or how to deal with Revenue.

I would disagree with this, my one man band accountant is excellent and well able to handle audits and indeed revenue. If there is anything he doesn't know he will ensure to inform himself etc. The larger firms can be very expensive and beyond the costs of some people. And you can lose out on personal service.

 

[Setanta12]

I would disagree with this, my one man band accountant is excellent and well able to handle audits and indeed revenue. If there is anything he doesn't know he will ensure to inform himself etc. The larger firms can be very expensive and beyond the costs of some people. And you can lose out on personal service.

Accountants are trained for debits/credits. Some (most) help with tax. But Revenue Audits should be the preserve of properly-qualified people. I speak as both an accountant and a CTA.

(I stand to be corrected on this - in the States, there is a clear demarcation between tax-filings (accountants) and tax-advice (lawyers))

 

[Steven Barrett]

A lot of them are both. I am meeting someone later this morning who is both AITI and ACCA.

There are a huge amount of one person tax specialists too.

But most qualified accountants have the experience in dealing with Revenue and audits to be able to advise you. if they don't, they should refer you on, they don't want to get sued for giving incorrect advice.


Steven
www.bluewaterfp.ie

 

[T McGibney]

Accountants are trained for debits/credits. Some (most) help with tax. But Revenue Audits should be the preserve of properly-qualified people.

Accountants usually don't know the finer points of tax-law or how to deal with Revenue.

Sorry, this is nonsense of the highest order.

As Bronte was saying you do need an advisor - opt for a Chartered Tax Advisor from the Irish Taxation Institute (most decent-sized accounting firms will have one employed).

I speak as both an accountant and a CTA.

You had a naked vested interest in making the first-quoted comment, and you didn't disclose it until challenged. Extremely poor form.

 

[Setanta12]

Sorry, this is nonsense of the highest order.

.... ... ...

You had a naked vested interest in making the first-quoted comment, and you didn't disclose it until challenged. Extremely poor form.

I am very sure I've already identified myself as both on this site already, and also on threads in discussion with the other poster.

I use both qualifications in my line of work - they're separate professions. I have no vested interest here as I don't advertise any services here. (Do you?)

 

[T McGibney]

I certainly wasn't aware that you were a CTA, otherwise I would have pulled you up earlier on this thread.

My own position here is irrelevant, as on this site I have always clearly and fully disclosed my status.

 

[Setanta12]

I certainly wasn't aware that you were a CTA, otherwise I would have pulled you up earlier on this thread.

My own position here is irrelevant, as on this site I have always clearly and fully disclosed my status.

Pulled me up, or contributed to this thread ? I did say in my first post, I couldn't recall all the rules.

You argue that accountants are familiar with tax-law; when do accountants study tax-law? Perhaps you meant rules, procedures, commentary & text books, and guidelines - which gets them by for the most part.

I'm still unsure what vested-interest you seem to suggest I'm touting here.

(In the interests of fairness - I have noted over past few months your own expertise in the areas you comment upon, and do not denigrate that in any way.)

 

[T McGibney]

Pulled me up, or contributed to this thread ? I did say in my first post, I couldn't recall all the rules.

You argue that accountants are familiar with tax-law; when do accountants study tax-law? Perhaps you meant rules, procedures, commentary & text books, and guidelines - which gets them by for the most part.

I'm still unsure what vested-interest you seem to suggest I'm touting here.

(In the interests of fairness - I have noted over past few months your own expertise in the areas you comment upon, and do not denigrate that in any way.)

Over to the mods....

 

[Joe_90]

Accountants usually don't know the finer points of tax-law or how to deal with Revenue.

I would agree that the first part may be true but I think that it's a vast generalisation to say accountants don't know how to deal with Revenue.

 

[Paddy199]

You are selected for 2011 & 2012, they can't go back to 2010 unless they issue a further letter to extend the audit years to 2010, and they would only do that if they have an issue with something in 2011 / 2012.

In my view, if you were to disclose something in 2010 at the commencement of the audit, that would be an unprompted disclosure.

 

[hunghang]

Thank You

 

[Setanta12]

I would agree that the first part may be true but I think that it's a vast generalisation to say accountants don't know how to deal with Revenue.

I'll retract the last part. For 99% of times, accountants do deal adequately with the Revenue.

(My point - perhaps I'm miscommunicating it - is that CTAs are greater tax-experts than accountants (who don't study Tax) for the most part)

 

[mandelbrot]

I don't really see what the big deal is here to be honest - in GENERAL you'd expect a person who has studied for and obtained a specialist tax qualification while working in the field, to have better tax knowledge than someone who has a more general qualification.

Of course in SPECIFIC how good any individual practitioner is on any given area of tax will depend on their experience and overall level of capability, at least as much as their academic qualifications.

To answer the OP's question, I agree with Paddy199, as the period is outside of the scope of the notified audit, and particularly if the issue that is subject of the disclosure is not one that gives rise to a liability in the years under audit.

 

[Bronte]

Thank You

You also ought to ask the following question, particularly since you now have the attention of all most of the accountants on AAM:

"Should I make an unprompted disclosure for 2010"

1) Yes, as you should be an honest tax payer
2) you could chance that it will never be spotted
3) if it's a large amount is it worth the stress of you constantly worrying about it, and them finding it
4) if 2011 and 2012 are squeaky clean there is probably a zero chance of them going back further, and in all likelyhood going forward, once audited once, it's highly unlikely they will go back in the future, prior to 2012
5) if they go back and discover it, they might go checking further, but that's not a problem if you believe this is the only mistake

etc

By the way how come you discovered the error in 2010 now ?

 

[hunghang]

The error arises as a result of the new guidance revenue have issued on allowable expenses and subsistence. If this new guidance was to be applied to 2010 then I have a problem. 2011 & 2012 do not have an issue with expenses as travel was limited and small.

 

[mandelbrot]

Particularly because of the nature of the issue and Revenue's focus on this area, I would certainly advise taking the opportunity to make an unprompted disclosure while it's there if you know there's an issue and you know they are looking at you - if the auditor is any kind of auditor, they will look at the 2010 comparative figures when examining 2011 and if the 2010 expenses are out of line it will beg questions.

So if you take a chance on saying nothing, you risk losing the reduced penalty and the non-publication (depends on amount of the liability) in the event that the auditor extends the scope to 2010.

At the end of the day it is a judgement call based on your own risk appetite, and what you can live with. What does your accountant/tax advisor think?

 

[T McGibney]

A very simple message to the OP: Think long and hard before you label yourself as a tax defaulter. And only do so if you are certain beyond all doubt that you have defaulted on your tax obligations.