What Revenue might be looking for if you get a tax audit?
Every self-employed person can be subject to a revenue audit at any time. Having had an audit does not necessarily mean that you are not likely to have another one for a considerable period of time.
Revenue audits are not an absolute certainty but they are a virtual certainty. Most people have a great fear of revenue audits and probably with justification if they have something to hide. Even if they do not have something to hide it can be a very stressful experience.
That said, revenue auditors are generally handpicked and trained to execute the task in a pleasant, calm but business-like manner and will at all times endeavour to avoid argument or aggravation.
The revenue auditor will generally insist on holding the audit at the farmer's residence or farm office, which in itself will reveal a certain style and standard of living.
At the commencement of the audit the farmer will be offered the opportunity to declare any unrecorded sales, income or expenses inappropriately claimed.
A declaration at this stage may minimise the imposition of penalties.
Such a declaration is called a Qualifying Disclosure. The auditor will commence the audit with a long series of questions that will cover everything about the farm business to the personal circumstances of the farmer.