Thursday, 20 January, 2022

Individuals: what to do in the event of a tax audit?

No, it doesn’t just happen to others. Each year, the administration checks around 900,000 personal tax files. Among them, maybe yours. If ever this “quack” happens one day, following these few golden rules will reduce the impact.

Keep a low profile

Notice to the wealthiest households: the richer they are, the more they will attract the curiosity of the tax authorities. The administration primarily targets “high stakes” financial files. That is to say, owners of assets exceeding 1.3 million euros, and those whose income exceeds 270,000 euros per year. “The tax authorities are also more attentive to taxpayers who declare or pay late,” adds Pierre Fernoux, professor of tax law at the University of Paris II. You have been warned: discretion requires setting an example.

Respond to mails

There is no point in ignoring the tax letters. On the contrary. If you do not respond within 30 days to a request for clarification or correction, the administration will consider you to be “in bad faith.” »The price: a penalty of 40% automatically. Fiscal autism is expensive and in addition, it is counterproductive. “The administration has all the tools to overcome your stubbornness. If she wants to force you, she will do it, ”warns Pierre Fernoux. And later asserting your possible “good faith” will then be impossible.

Play in good faith

If you receive an audit notice, please cooperate. Why ? Because if you really made an error or an omission, correcting the situation yourself will already reduce the default interest by half. And in addition, depending on the leniency of the controllers, you can greatly reduce your penalties. “We can go as far as not applying a penalty if we show our good faith,” even advance Pierre Fernoux.

Defend and negotiate

Too many taxpayers imagine that they cannot challenge tax adjustments. But it’s wrong ! A good tax lawyer can sometimes find flaws that will bring down the whole procedure. However, the sums involved must be worth it. The prices of good lawyers can go up from 400 to 1,500 euros per hour. To end a check, you can also suggest a transaction. You agree not to challenge the tax amendment in court and in exchange, the administration may grant you a reduction in penalties. A win-win deal!


Tax fraud