Tax Audit
The tax audit is a formal examination of a taxpayer’s financial records, tax returns, transactions, and supporting documents by a tax authority to determine whether the taxpayer has correctly declared and paid the taxes due.
Taraba State Internal Revenue Service (TIRS), the main objectives are:
1. Verify tax declarations – Compare taxpayers’ returns with their actual income, payroll, sales, or business activities.
2. Detect underpayment – Identify taxes that were incorrectly calculated or not fully paid.
3. Identify tax evasion and non-compliance – Detect concealed income, false deductions, undeclared employees, or other irregularities.
4. Verify records – Examine invoices, receipts, payroll records, bank-related evidence where lawfully obtainable, accounting records, contracts, and other relevant documents.
5. Assess additional tax liabilities – Where discrepancies are established, determine the additional tax, interest, or applicable penalties.
6.Improve voluntary compliance – Encourage taxpayers to maintain proper records and comply with tax laws.
7.Protect government revenue – Ensure that taxable economic activities within the State are properly captured.
Typical Tax Audit Process
Taxpayer selection → Audit notification → Review of records → Field/desk examination → Reconciliation → Audit findings → Tax assessment → Taxpayer response → Resolution/objection → Payment or enforcement
Key Tax Audit Areas for a State IRS
PAYE and employment income
Withholding tax where applicable under State jurisdiction
Business premises and related State levies
Direct assessment of individuals/self-employed persons
Consumption-related taxes assigned to the State under applicable law
Taxpayer registration and TIN verification
Tax returns and payment reconciliation
Tax clearance verification
Compliance with filing and payment obligations