サービス
Tax Audit Support
If you are subject to a tax audit, we can provide support as your tax representative.
Tax audits are conducted periodically, typically every three to five years, to verify whether past tax returns were accurate. However, it is often not as simple as determining right or wrong. During the audit, we carefully explain the basis of the company’s transactions and provide the tax authorities with a clear and convincing explanation.
In addition to our regular clients, we also offer tax audit support to non-regular clients, both individuals and corporations.
Preliminary Preparation, Routine Preparation
The most important aspect of a tax audit is preparation. When a tax audit is scheduled, it is essential to review all aspects of daily sales and expenses.
Potential issues are examined to confirm the rationale behind how sales and expenses were recorded.
The tax authorities have even published guidelines outlining their basic approach to audits. Generally, audits focus on significant errors, large amounts, or intentional concealment and falsification.
Minor mistakes or small errors are common in any company, and auditors usually do not point out every single one.
Additionally, from the stage of daily transactions before a tax audit, it is crucial to record sales and expenses based on a clear and explainable policy. This approach becomes extremely important during the audit.
On the Day of the Tax Audit (On-Site Inspection)
On the day of the on-site tax audit, the accounting firm will be present to accompany you. During the first part of the audit, the discussion is less about accounting or taxes and more focused on background information, such as personal history, family structure, previous employment, and the nature of the company’s business.
In the latter part, the discussion shifts to specific financial figures, where the accounting firm acts on your behalf to provide explanations.
Basically, company personnel will never be alone with the tax authorities, so you can rest assured.
After the Audit and Filing Amendments
Even after the on-site audit is completed, the investigation may continue through correspondence or phone calls. However, the company itself will generally not meet or speak directly with the tax authorities from this point onward; the accounting firm will handle all interactions until the audit is concluded.
If any issues are identified, corrective filings will be made for the relevant items, and necessary actions will be taken to bring the audit to a close.
FAQ
You cannot refuse a tax audit.
Tax auditors have the authority to examine accounting records and other documents when necessary for the audit (the right of inquiry and inspection).
While a tax audit technically requires the taxpayer’s consent, you cannot refuse or obstruct the audit without a legitimate reason.
As a rule, prior notice is given. However, in certain situations—based on the need to ensure fair taxation—the authorities may conduct an audit without advance notice. Depending on the industry and circumstances, an unannounced visit is possible.
Yes, it is possible. In some cases, it is better to make corrections before the audit, while in others it may not be necessary. We will review the situation as a whole and provide appropriate advice.
There are various perspectives, so there isn’t a simple answer, but the most important factor is whether the expense is related to the business.
In simple terms, an expense is considered business-related if it directly or indirectly contributes to increasing revenue or reducing costs.
We provide comprehensive support in justifying and explaining this point.
OTHER SERVICE
- HOME
- SERVICE - Tax Audit Support