Beware – Revenue Commissioners are coming your way !

Over 90% of revenue audits are selected for a reason, meaning the chances of a random Revenue Audit is small. However recently Revenue are getting a lot smarter in their approach as we highlight with examples below;

1. Town Blitz’s

As an example in recent weeks a team of Revenue Officials descended on the town of Balltinglass, Co.Wicklow. They collected names, addresses and telephone numbers from every flyer from notice boards in shops and shopping centre’s in the town. They also visited retail businesses and pubs in the town and collected z readings from their tills. In the days following they followed up every one of the flyer telephone numbers they had collected. The result was 80 businesses were caught by Revenue for taxes, interest and penalties and in some cases prosecution and orders to cease trading. Examples of the businesses caught were in the following areas landscapers, hairdressers, child minders, grinds providers, music and dance, handymen, painters, cleaners, horse riding, motor driving etc. What they also found was that some of these were also drawing welfare. This is an approach which we are told Revenue will continue with over the coming years in other towns.

2. Targeting of Specific Sectors in Specific Locations

As an example Revenue are currently targeting the top 500 property investors in Kildare. They sent out a request for a information on all property acquisitions and disposals the investors had ever made. They are looking to examine if any taxes were underpaid including capital gains taxes, capital acquisitions taxes, income taxes etc. They are cross checking the information they get back with information they already have both externally and internally. They are also going through all stamping records. Taxpayers are told if they don’t co-operate they will automatically receive a full Revenue Audit. We have been told by Revenue they are delighted with the ‘take’ so far.

3. Random Letters of Request

Revenue have substantially increased the level of letters of request being sent to tax payers on a random basis. These letters just ask questions and look to see if the Taxpayers responds with information. They are told they are been given the opportunity to disclose information in an unprompted manner which will help them if they ever receive a Revenue Audit. Revenue have told us they were surprised with the high level of tax they receive by this route.

They are also targeting back up from certain allowances and claims on income tax returns such as medical expense claims. They tell us this often leads to errors and further issues with returns which invariably leads to additional tax liabilities.

4. Targeting of Professional Practice Clients

We’re told that certain accounting practice client bases are being targeted as Revenue have found ongoing errors with some practices work.

5. Unannounced Visits

This is something Revenue have always done but we believe it is something which they are stepping up on.

6. One-Off Houses and Extensions

We understand in the last 12 months Revenue have increased the number of staff on the road travelling around and calling on sites where work is been undertaken. This is in relation to one off houses, extensions, refurbishments, painting jobs, roofing jobs etc. Again this is something Revenue always had a certain presence in but we are told they now believe more and more work is happening in the black economy and as a result have increased their resources in this area.

7. Concerts, Sporting Events, etc

Last weekend a dozen tax inspectors joined the crowds attending weekend’s Prince concert in Malahide, North Co Dublin. They focused on stall operators and their employees about their taxes.

Revenue is targeting the black market or cash businesses as part of an investigation into its growth during the recession. Similar probes have been carried out at Slane, Oxegen and Electric Picnic as well as several sporting events.

Tax Compliant Taxpayers have very little to worry about. However if anyone needs advise on any of the above or any tax compliance matter please contact either Pat Sutton or Patrick O’Rourke, of O’KellySutton, Chartered Accountants Kildare.