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9 Reasons you might be called for a Revenue Audit

Ever wonder why your business has been selected for an inspection? Every year, Revenue become more and more sophisticated in how they operate and who they target for audits.

Updated 7 Aug 2025 | Published 28 Feb 2019

By Gearoid Condon, FCA 3 min read

Limited Companies

Ever wonder why your business has been selected for an audit? Revenue’s Risk Evaluation Analysis and Profiling (REAP) system has become increasingly sophisticated, using data analytics, artificial intelligence, and third-party data sources to identify businesses at risk of non-compliance.
 
While audits are often triggered by obvious red flags, sometimes businesses are selected at random. Here are the nine main reasons why your company might come under Revenue’s watchful eye.
 
 

1. Continuous late filing

 
Revenue expects businesses to file tax returns on time, including VAT, PAYE, Corporation Tax, and Income Tax. If you repeatedly file late, Revenue’s REAP system will flag your business, increasing the likelihood of an audit or inquiry.
 
How to avoid this:
 
  • Stick to your filing deadlines
  • Use Revenue’s ROS system for online submissions
  • Set reminders for key tax dates
 
 

2. Continuous late payment

 
Some business owners mistakenly believe they can file tax returns on time but delay the payment, but this is not the case. Late payments can result in interest charges, and repeated delays may increase the risk of a Revenue audit.
 
Key Takeaway:
 
  • To benefit from extended online filing deadlines, both the return and payment must be submitted together.
  • Avoid unnecessary interest charges by paying on time.
 
 

3. Multiple amendments to Tax Returns

 
Revenue allows businesses to correct errors in tax returns, but frequent amendments could raise concerns. If your company constantly revises submissions, Revenue may suspect inaccurate reporting or undeclared income.
 
 

4. Financial Statements not matching VAT Returns

 
Revenue compares VAT returns with the financial statements filed with the Companies Registration Office (CRO). If reported sales figures differ significantly, this will likely result in an inquiry.
 
If there is a legitimate reason for the difference, ensure your accountant has a clear reconciliation prepared.
 
 

5. Your industry is under review

 
Revenue targets certain industries periodically when it suspects underpayment of taxes.
 
Recent focus areas include:
 
  • Gig economy workers (freelancers, contractors)
  • E-commerce businesses (online stores, digital service providers)
  • Cash-intensive industries (hospitality, retail, construction)
 
Even if you operate transparently, being in a high-risk sector could increase your chances of an audit.
 
 

6. Claiming the Research & Development (R&D) Tax Credit

 
Businesses that claim the R&D tax credit are almost always audited but this audit generally focuses only on the R&D claim rather than the company’s overall tax position.
 
Revenue’s New Approach:
 
  • Since 2023, Revenue requires more detailed supporting documentation for R&D claims.
  • Ensure your company has proper records before claiming this credit.
 
 

7. Third-Party Data Matching – Form 46G

 
Revenue collects information from third-party sources, including banks and digital payment platforms.
 
What This Means is:
 
  • Form 46G requires businesses to declare payments made to third parties (e.g., contractors).
  • If your declared expenses don’t align with reported income, Revenue may investigate.
 
 

8. Anomalies in your Corporation Tax Return

 
Corporation Tax Returns (CT1) can trigger audits for reasons such as:
 
 
If your financial figures appear inconsistent, Revenue may request further clarification.
 
 

9. Random selection

 
Despite Revenue’s data-driven approach, some audits still happen purely at random.
 
Random audits keep businesses on alert for compliance issues. Even if your company operates within the rules, having thorough records reduces stress if selected.
 
 

We can help

 
If Revenue selects your business for an audit, don’t panic but act fast. Contact your local accountant or tax advisor to ensure you’re fully prepared.
 
 

Looking for an accountant?

Contact TaxAssist Accountants for a free, no-obligation consultation to get a fixed fee quote

061 310429

Or contact us
 
 

Updated 7 Aug 2025 | Published 28 Feb 2019

This article is intended to inform rather than advise and is based on legislation and practice at the time. Taxpayer’s circumstances do vary and if you feel that the information provided is beneficial it is important that you contact us before implementation. If you take, or do not take action as a result of reading this article, before receiving our written endorsement, we will accept no responsibility for any financial loss incurred.

Gearoid Condon, FCA

Gearoid is a highly experienced Chartered Accountant with 25 years of expertise in business consultancy, specialising in supporting SME business owners. Gearoid has worked with start-ups and with established businesses to improve the way they run, with particular focus on growth, efficiency, and structuring operations. Through his experience Gearoid has a strong understanding of the tax system and business regulations in Ireland.

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