Revenue Administration: Taxpayer Audit--Use of Indirect Methods
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Summary:
This technical note examines the use of indirect methods in a taxpayer audit. Indirect methods involve the determination of tax liabilities through an analysis of a taxpayer’s financial affairs utilizing information from a range of sources beyond the taxpayer’s declaration and formal books and records. Assessments are often based on circumstantial evidence indicating a reasonable estimate of the taxpayer’s correct liability. This note describes why tax administrations need to use indirect audit methods. Indirect audit methods commonly used by tax administrations are elaborated. The legislative requirements for the use of indirect audit methods are also analyzed.
Series:
Technical Notes and Manuals No. 2010/005
Subject:
Administration in revenue administration Auditing Expenditure National accounts Personal income Public financial management (PFM) Revenue administration Tax administration core functions
English
Publication Date:
April 14, 2010
ISBN/ISSN:
9781455238101/2075-8669
Stock No:
TNMEA2010005
Pages:
13
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