Tax Audit Process
Tax Audit is an examination of underlying records to determine whether a taxpayer has correctly reported its tax liabilities. Tax audits are more detailed and extensive than other types of examinations such as desk examination, compliance monitoring/reviews. FIRS selects taxpayer for tax audit using multifaceted approach including risk profiling, intelligent information, request for refund, etc. A taxpayer who has been subjected to desk examination or monitoring could still be selected for tax audit. A typical FIRS tax audit process consists of three stages:
1. Pre-Audit Stage: This is the tax audit planning stage and consists among others the following activities: selecting taxpayers; notifying taxpayers of tax audit exercise and selecting tax audit teams. These are all done within FIRS premises.
2. Field Audit stage: This commences on the agreed date in the Taxpayers premises and signifies the beginning of the tax audit cycle. The activities at this stage are highlighted in the table below:
The service of the Assessments and Demand Notices on the Taxpayer signifies the end of the audit cycle.
3. Post Audit Stage: This consists of activities relating to collection and appeal procedure which is not part of the audit cycle and include among others: payments, objections and appeals by taxpayers based on the provisions of tax laws.