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Revenue Administration: Taxpayer Audit--Use of Indirect Methods
Author:
International Monetary Fund
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Series:
Technical Notes and Manuals
Volume/Issue:
Volume 2010: Issue 005
Language:
English
Publication Date:
14 Apr 2010
DOI:
https://doi.org/10.5089/9781455238101.005
ISBN:
9781455238101
ISSN:
2075-8669
Pages:
13
Keywords:
TNM; receipt; taxable income; audit program; method; administration; auditor; customs declaration; declaration of income; taxpayer audit; tax audit methods; indirect methods; indirect audit methods; indirect method; taxpayer audit--use; taxpayers figure; taxpayer claim; taxpayer challenge; taxpayer's book; cash expenditure method; method assessment; answers to question; risk taxpayer; Personal income; Administration in revenue administration; Tax administration core functions; Auditing
Legal-disclaimer:
This Technical Guidance Note should not be reported as representing the views of the IMF. The views expressed in this paper are those of the authors and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.
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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.
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Cover Technical Notes and Manuals
Technical Notes and Manuals
ISSN:
2075-8669
Publisher:
International Monetary Fund