Cases identified as having risk aspects by the Revenue REAP system could be subject to Revenue visits under a change in audit approach in the South West Region commencing this month. Notifications of such interventions are not audit notifications, and do not constitute “prompting” for the purposes of computing penalty mitigation.

For the past several months, Revenue have been issuing what they term “aspect enquiries” on cases which their REAP system has identified may be problematic. These aspect enquiries were not audits as such, but more in the nature of a tie breaker to identify which taxpayers would be subject to the full rigours.

Under a new system, being piloted in the South West district, letters will issue requesting a meeting with three weeks notice to discuss risk items highlighted by the REAP system. The letter will identify the risk factors to be discussed. The letter will also clarify when the Revenue intervention becomes “prompted” for penalty mitigation purposes – this is helpful as it has not always been clear in the past whether or not an intervention constituted an audit.

We understand that as part of this new Revenue approach, any existing open audits are to be concluded as quickly as possible by the officers involved in the new project. It would also seem that unless Revenue possess some hard evidence to the contrary, qualifying disclosures arising from the system will be accepted and the scope of the audits will not be extended. Several hundred cases will be involved, under a time limit of 12 weeks from the date of issue of the risk letter to the conclusion of any audit, if an audit is indeed required.

Audit Cases outside the scope of the new scheme are to be unaffected. The new Revenue project commences this week.