How do you handle a tax authority review?

Reviews are a normal part of the system. The tax authority asks questions, sometimes years after the claim was paid,1Source 1A tax authority can review a claim after it has been paid, within time limits set by law: Internal Revenue Code section 6501 (United States); Finance Act 1998 Schedule 18 paragraphs 24 and 46, via HMRC Enquiry Manual EM1510 and Compliance Handbook CH51300 (United Kingdom); Taxes Consolidation Act 1997 section 959AA, via Revenue Notes for Guidance Part 41A (Ireland); Income Tax Act section 152(3.1) and (4) (Canada); Income Tax Assessment Act 1936 section 170, Income Tax Assessment Act 1997 section 355-705 and the ATO, Request an amendment to a business or super tax return (Australia); Tax Administration Act 1994 section 108, via Inland Revenue SPS 20/03 (New Zealand); Income Tax Act 1947 section 74 (Singapore). More detail on your country page. and the business answers them. How the adviser handles that moment decides how much of your time it takes, how well the claim is defended, and what it costs. An adviser with a clear process, the original working papers and the people who wrote the technical case still in place is in a very different position from one who has to start from the file.

A description of the process: who receives the letter, who prepares the response, who attends meetings, and how you are kept informed. A statement that the working papers and the technical case are kept and available. The fee position for review work, whether included or priced. An honest account of what the adviser cannot do, such as pay any tax that becomes due.

An answer that reviews never happen. A process that depends on people who have left or records the adviser does not keep. Review work priced by the hour with no estimate. A letter that says nothing about reviews at all.

• The clause: review and audit support
• The script: asking for a fee cap
• Red flag: review support costs extra. Green flag: review support is in the price
• Claim reduced on review and if your claim is reviewed for your country

Sources

1. A tax authority can review a claim after it has been paid, within time limits set by law: Internal Revenue Code section 6501 (United States); Finance Act 1998 Schedule 18 paragraphs 24 and 46, via HMRC Enquiry Manual EM1510 and Compliance Handbook CH51300 (United Kingdom); Taxes Consolidation Act 1997 section 959AA, via Revenue Notes for Guidance Part 41A (Ireland); Income Tax Act section 152(3.1) and (4) (Canada); Income Tax Assessment Act 1936 section 170, Income Tax Assessment Act 1997 section 355-705 and the ATO, Request an amendment to a business or super tax return (Australia); Tax Administration Act 1994 section 108, via Inland Revenue SPS 20/03 (New Zealand); Income Tax Act 1947 section 74 (Singapore). More detail on your country page.  Back