Revenue Audit Any advice

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cremeegg

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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
 
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.
 
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.
 
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.
 
T McGibney said:
A prompted voluntary disclosure must cover all the taxpayer's outstanding liabilities, otherwise it is invalid
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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.
 
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
taxheads and periods, where liabilities arise, as a result of deliberate
behaviour, that were previously undisclosed

• in the case of a prompted qualifying disclosure in the careless
behaviour/gross carelessness/insufficient care category of tax
default, the qualifying disclosure must state the amounts of all
liabilities to tax and interest in respect of the relevant taxhead
and periods within the scope of the proposed audit
• in the case of an unprompted qualifying disclosure in the careless
behaviour/gross carelessness/insufficient care category of tax default,
the qualifying disclosure must state the amounts of all liabilities to
tax and interest in respect of the taxhead and periods that are the
subject of the unprompted qualifying disclosure.
2.7.1 Related Liabilities
The auditor may also pursue related liabilities for taxheads or periods that
not within the initial scope of the audit and the benefits of prompted
disclosure will be extended to these liabilities.
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Gekko said:
Accordingly, the disclosure is only required to deal with the tax(es) and period(s) that are the subject of the audit.

.
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If you disclose something in one year would revenue not then be suspicious and check other years?
 
Bronte said:
If you disclose something in one year would revenue not then be suspicious and check other years?
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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).
 
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?
 
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?
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http://www.revenue.ie/en/practitioner/code-of-practice-revenue-audit.pdf
 
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.
 
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?
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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).
 
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
 
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?
 
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?
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+1

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

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
Click to expand...

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
 
hastalavista said:
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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Ah it warms the cockles of my heart to hear that! :D

Good enough for him.
 
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?
Click to expand...

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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