Tax Audit

 

This is a review or an examination of the books of account of a taxpayer. This is done to ensure that the amount of taxes due from such taxpayer as per the tax laws and regulations are paid by the tax payer when it is due.

Why would a tax authority carryout tax audit?

Generally, tax authority carryout tax audit to ensure that:

Ø  The taxpayer complies with tax laws and regulations.

Ø  The taxpayer pays the correct tax due to the government.

Ø  Taxpayers maintain all relevant accounting records that help the tax authority determine the taxpayer’s correct amount of tax

Ø  Assertions made by taxpayers in their tax forms are correct and reliable.

Ø  All applicable tax laws and regulations have been obeyed.

Ø  Acts of tax evasion is avoided.