What to do when dealing with a tax audit.
If you were ever called in for a tax audit, keep in mind that:
1.) The business is yours, make sure your accountant fully understands the tax compliance of your company.
2.) Choose a representative who fully understands the tax compliance of your business when dealing with the tax auditor.
3.) If you face a tax auditor who claims that you did something wrong, ask them how you did wrong and how much the tax and penalties are, but don’t sign anything until you have checked with a tax expert. If you have done wrong, close the case with maximized tax saving.
4.) If you disagree with the assessment made by the tax auditor, you have the right to appeal to the Commission of Appeals (form P.S.6) within 30 days starting from the day the assessment notice was received.
Should you disagree with the ruling of the Commission of Appeals, you can appeal the decision within 30 days starting from the day the CA ruling was received. Should you fail to appeal within 30 days, you must pay the whole amount of tax, fine and surcharge.
5.) If finally you have to pay tax, you can file a request to pay the tax arrears in installments. However, such payments must meet the requirements set by the Revenue Department.