revenue audit

wexandproud

a friend of mine had a revenue audit about 7 years ago and had no major problem, he was claiming food expenses for his commercial fishing vessel and this was accepted by the revenue inspector. the same guy is being audited again and the revenue auditor has said that under no circumstances are food expenses being accepted and has given him a demand for about 18k for the last 2 years and told him if he doesent pay she will go back further.. can they imtimidate him in this way or indeed panalise him for doing what was accepted before....there is nothing to hide in the accounts but its just the stress of it

Mr. Incognito

Seek professional advice.

Thats their job. Food is a legitimate expense on a commercial fishing vessel.

The_Bot

Best to seek specific professional advice on this.

While I have never dealt with a Revenue audit in the context of fishing or sea-going concerns, when it comes to any contentious issue during an audit I would question Revenue's basis for the position they have taken, see if they are correct/incorrect in their analysis and if there are any alternative interpretations (i.e. favourable to the taxpayer). This is where a professional’s knowledge of tax law and practice will add value (as well as Revenue audit experience)

There are a lot of "grey" areas in Irish tax law and Revenue's interpretation is not necessarily the right one. If two separate auditors have taken opposing views on the same issue (even though separated by 7 years), I would certainly be doing my own homework on the issue to look for any weakness in the current auditors approach.

However, your friend should be prepared for the outcome that the current auditor is correct and that he has had the benefit of 7 years worth (with 2 being adjusted for) of tax deductions that were not correctly due.

A Revenue auditor can open prior years if a material issue has arisen in course of an audit that warrants opening prior periods. If it transpires that 7 years worth of deductions were incorrectly taken, an adjustment for 2 years out of 7 might be a deal worth taking.

wexandproud

The_Bot wrote: »

Best to seek specific professional advice on this.

While I have never dealt with a Revenue audit in the context of fishing or sea-going concerns, when it comes to any contentious issue during an audit I would question Revenue's basis for the position they have taken, see if they are correct/incorrect in their analysis and if there are any alternative interpretations (i.e. favourable to the taxpayer). This is where a professional’s knowledge of tax law and practice will add value (as well as Revenue audit experience)

There are a lot of "grey" areas in Irish tax law and Revenue's interpretation is not necessarily the right one. If two separate auditors have taken opposing views on the same issue (even though separated by 7 years), I would certainly be doing my own homework on the issue to look for any weakness in the current auditors approach.

However, your friend should be prepared for the outcome that the current auditor is correct and that he has had the benefit of 7 years worth (with 2 being adjusted for) of tax deductions that were not correctly due.

A Revenue auditor can open prior years if a material issue has arisen in course of an audit that warrants opening prior periods. If it transpires that 7 years worth of deductions were incorrectly taken, an adjustment for 2 years out of 7 might be a deal worth taking.

problem seems to be with his current accoutant, he is unwilling to argue or discuss it at all with revenue and we are just trying to gather as much info and opinions as we can. if we can find out if other fishing vessels have claimed food expenses or been dissallowed from doing so it would be a big help. we have spent the afternoon on revenue web site and there is some guidelines there about an audit and consistancy so we will see what happens. i know what you mean about 2 years adjustment, but if she is wrong , its in all the future years he will loose out

The_Bot

wexandproud wrote: »

problem seems to be with his current accoutant, he is unwilling to argue or discuss it at all with revenue

Has he explained why not? That doesn't sit right with me. No professional advisor of any reasonable standard would not seek to get the best result he can for his client during a Revenue audit.

wexandproud

The_Bot wrote: »

Has he explained why not? That doesn't sit right with me. No professional advisor of any reasonable standard would not seek to get the best result he can for his client during a Revenue audit.

he is starting to get the feeling there is a skeleton in the closet with the accoutant and revenue, as soon as this is over he will change accoutant as he is not a happy camper, i am also involved in the fishing industry and am going through an audit aswell with no issues yet, after 10 weeks, and no mention of food expenses,so it will be interesting to see what happens

strongback

The_Bot wrote: »

Best to seek specific professional advice on this.

While I have never dealt with a Revenue audit in the context of fishing or sea-going concerns, when it comes to any contentious issue during an audit I would question Revenue's basis for the position they have taken, see if they are correct/incorrect in their analysis and if there are any alternative interpretations (i.e. favourable to the taxpayer). This is where a professional’s knowledge of tax law and practice will add value (as well as Revenue audit experience)

There are a lot of "grey" areas in Irish tax law and Revenue's interpretation is not necessarily the right one. If two separate auditors have taken opposing views on the same issue (even though separated by 7 years), I would certainly be doing my own homework on the issue to look for any weakness in the current auditors approach.

However, your friend should be prepared for the outcome that the current auditor is correct and that he has had the benefit of 7 years worth (with 2 being adjusted for) of tax deductions that were not correctly due.

A Revenue auditor can open prior years if a material issue has arisen in course of an audit that warrants opening prior periods. If it transpires that 7 years worth of deductions were incorrectly taken, an adjustment for 2 years out of 7 might be a deal worth taking.

From my experience of an audit this is very good advice. In my case I didn't feel the auditor understood my industry fully and and took a bit of a flyer at a couple of things on which he wasn't able to follow through on.

The audit was easily the worst experience I have had in nearly 7 years in business and it was hard not to take some of the accusations personally as they question you integrity and honour. In the end I had to pay out less than 1000 euros but many expense claims were disallowed or severely chopped. I certainly would never again expect the Revenue to be fair and reasonable in their approach to an audit. My best advice is to get a good accountant who will just be as blunt and as stone wall as the Revenue.

The experience has led me to consider whether I want to be involved in a business as a director. I genuinely felt degraded by the Revenue as I sat in an interview room having my honesty questioned over and over again. In the end they found nothing except a token few hundred quid. A horrible experience and for what?

2ndcoming

All investigations are the same, if you're brought in on suspicion of a crime by the Gardaí it wouldn't be a comfortable experience either. Investigators have to play a hard line or they'd never uncover the actual scammers.

Nature of the beast unfortunately.

strongback

2ndcoming wrote: »

All investigations are the same, if you're brought in on suspicion of a crime by the Gardaí it wouldn't be a comfortable experience either. Investigators have to play a hard line or they'd never uncover the actual scammers.

Nature of the beast unfortunately.

I don't see any reason an audit should need to resemble a Garda interview.

At least the common criminal is innocent until proven guilty. In an audit it is done the opposite way around.

barneystinson

strongback wrote: »

I don't see any reason an audit should need to resemble a Garda interview.

At least the common criminal is innocent until proven guilty. In an audit it is done the opposite way around.

That sounds entirely at odds with Revenue's Customer Charter and the Code of Practice for Revenue Audit. Presumption of honesty is clearly set out there.

strongback

barneystinson wrote: »

That sounds entirely at odds with Revenue's Customer Charter and the Code of Practice for Revenue Audit. Presumption of honesty is clearly set out there.

Presumption of Honesty

You can expect:

To be treated as honest in your dealings with Revenue unless there is
clear reason to believe otherwise and subject to Revenue’s
responsibility for ensuring compliance with tax and customs law.


The bolded words are very open to interpretation. Very "sketchy" stuff and accusations based on "shots in the dark" are suggested leaving the audited in a position that they must prove their compliance. After compliance on an issue is demonstrated another "shot in the dark" is thrown out there and pursued with even greater vigour. Rinse and repeat until you lose the will to live such is the intensity in the room.

TOMP

I dont know anything about the fishing industry, but normally somebody at work in an office or factory would not be able to claim the cost of their meals while at work. Why is it different on a boat?

srsly78

People in an office and factory can get free or subsidised food from a staff canteen if their employer chooses (like Google does). This is allowed so long as it is provided to all employees.

Why is it different on a boat?