Investigation Matters

Interview

Generally, the inspector will request an interview with the proprietor(s) of the business and will often suggest that this takes place at the business premises. The Revenue has no legal right to insist on an interview; the Practitioner must decide with his client if they accept the Revenue view that an interview is the quickest way to reach a satisfactory conclusion and, if so, whether it should be held at the business premises, the Practitioner's office or the Tax Office.

The inspector will cover the following matters in his interview brief:

Reason for Interview

• no reason has to be given for enquiring into a return
• a reason should be sought to ensure that the inspector's concerns are not groundless or easily answered

Nature of the business

• the precise nature and scope of the business activities
• changes in the nature of the business in the years under review
• problems due to inexperience, competition, etc

Records

• what records are kept, who writes them up and when
• how closely cash is controlled; does a cash flow test reveal irregularities
• what record is kept of cash Drawings
• are the records discredited by information provided by a third party
• is any ancillary income (eg. wig work for a local theatrical group) correctly recorded

Critical Review of business results

• matters arising out of the review of the accounts
• the adequacy of any private use adjustments
• information needed to review the ratio of purchases to takings (see Performance indicators: Main performance indicator)
• technical adjustments required by tax law

Critical review of private side

• matters arising out of the review of the private side
• information about personal and private expenditure

Further Action

• further information needed to complete the business economics review (see Investigation matters: Business Economics Exercise)
• further information needed to complete the Means Test
• payment on account of further liabilities
• programme for providing further information