Revenue audits are an essential component of any self-assessment tax system. It is not possible for Revenue to review every return under every tax-head of every taxpayer. For this reason, Revenue must try to audit returns and taxpayers where there is the greatest chance that an error may have occurred. Revenue introduced a revised Code of Practice for Revenue audits which is effective from 14 August 2014 and significantly revises the previous 2010 Revenue audit code.
It is now estimated that less than 5% of all Revenue audits are selected randomly. This is because Revenue are now much more targeted in selecting which taxpayers to audit. Advancements in IT and the better use of available information have enabled this approach. In other words, if you have been selected for a Revenue audit, there may well be a good reason! This guide outlines how Revenue audits work in practice. It also contains a range of tips for dealing with audits and highlights many common tax risks (as well as some opportunities).