KRS Law Firm · Compliance
We Defend Your Interests Before the Tax Authorities
KRS Law Firm’s tax law experts help your business navigate a tax audit without unpleasant surprises.
Practice Area
See Also
Fiscal and tax audits examine how a business meets its obligations under tax law and whether its actual conduct complies with legal requirements. Audit activities should generally be preceded by notice of the intention to start a tax audit. Exceptions apply, notably to audits examining the validity of VAT refunds.
Although the authority conducting an audit bears the burden of proof and must take every step necessary to examine all factual circumstances thoroughly and comprehensively, the taxpayer’s active involvement at every stage is vital to the outcome. This gives the taxpayer a real opportunity to defend their interests.
KRS
01
Representation During an Audit
On a client’s instructions, we provide legal advice and representation during fiscal and tax audits. Our work aims to protect the taxpayer’s rights fully and ensure that the authority respects procedural safeguards.
- Specialist Knowledge of Audit Procedures.
- Effective, Professional Representation Before Auditing Authorities.
- Eliminating the Risk of Errors with Adverse Tax Consequences.
02
How We Work During an Audit
We examine the scope of the audit and the officials’ authority to conduct it. On the client’s behalf, we provide explanations requested by the authorities, prepare submissions addressing the evidence, participate in evidence-taking activities and submit our own evidence applications.
After reviewing the factual and legal findings in the audit report, we raise objections and request additional evidence where appropriate.
Our experience and specialist knowledge of audit procedures, tax proceedings and substantive tax law enable us to represent taxpayers effectively and professionally during audits. We also provide subsequent representation before regional administrative courts and the Supreme Administrative Court.
Working with our firm reduces the burden of dealing with the tax administration, helps clients use all available procedural rights and eliminates the risk of errors with adverse tax consequences.
03
Frequently Asked Questions
Do I need a representative during a tax audit, and how can I stop officials contacting me directly?
The law does not require you to appoint a representative: you may participate in an audit yourself. In practice, however, acting without professional assistance can mean unfamiliarity with the procedures, deadlines and rights available at each stage. Tax authorities have specialist inspectors, so professional support can help balance that expertise. Once a representative is appointed, the authorities must serve correspondence on them. Your advocate or legal adviser handles correspondence and explains complex issues, giving you peace of mind. In a crisis, decisions can become emotional; a representative assesses the matter calmly and strategically.
When Should I Contact an Advocate or Legal Adviser?
Ideally, contact us before your first communication with the auditing authority, as soon as you receive the authorisation to conduct the audit. The earlier a lawyer reviews the documentation, the better they can protect your interests. Waiting until a decision has been issued significantly narrows your options for submitting applications and evidence and using available remedies. Familiarity with case law helps shape arguments in the taxpayer’s favour during the audit rather than only when the case reaches court.
What Does a Lawyer Actually Do During an Audit?
A representative’s work includes:
- Taking over primary contact with the authority.
- Checking that the audit was lawfully initiated and verifying the scope of the authorisation.
- Participating in audit activities and interviews.
- Reviewing reports and submitting objections within statutory deadlines.
- Preparing explanations and documentation requested by the authority.
- Representing the client in appeals and before administrative courts.
- Filing appeals, complaints to regional administrative courts and cassation appeals to the Supreme Administrative Court.
Taxpayers sometimes unwittingly harm their position by giving overly detailed answers to officials’ questions. A lawyer acts as a “filter”, ensuring that the taxpayer does not provide unnecessary explanations that could be used against them.
What Are the Consequences of Mistakes Made During an Audit without Professional Legal Support?
A lack of procedural knowledge can have serious financial and legal consequences, including a tax assessment establishing arrears with interest and, in extreme cases, fiscal criminal liability. Missing the deadline for objecting to an audit report or filing an appeal may mean losing the right to challenge the authority’s findings further.
Can a Lawyer Challenge the Commencement or Conduct of an Audit?
Yes. A lawyer examines whether the audit was initiated in accordance with the Tax Ordinance or the National Revenue Administration Act, in particular whether the audit authorisation is valid, deadlines have been met and the authority has territorial and subject-matter jurisdiction. Formal defects may render the audit findings ineffective or limit their use in tax assessment proceedings.
Are Legal Fees Incurred During an Audit Tax-Deductible?
Generally, yes. Businesses may treat legal fees relating to their operations as tax-deductible expenses, provided they are properly documented and connected with the business. The specific rules depend on the legal structure and taxation method, so it is worth discussing this at the outset. If the audit concerns private matters, such as taxation of a gift or a privately owned property sale, these costs cannot be deducted for tax purposes. Interpretations of the relevant tax rules may change, so the position should always be checked against your particular tax circumstances.
What Practical Benefits Does a Tax Audit Representative Provide?
Once a representative is appointed, tax authorities must serve correspondence on them. Representation is an investment in protecting your assets, helping minimise errors that could cost far more than legal fees. Professional assistance can help with:
- Reducing tax risk.
- Monitoring the authority’s actions.
- Improving your negotiating position.
- Protecting against fiscal criminal liability.
- Shortening the audit or, where beneficial, extending its duration.
Contact
Contact Us
Tell us about your matter — we will analyse it and suggest a practical solution. There is no charge for your initial enquiry, and we will usually respond on the same working day.