In order to uphold the integrity of the tax code, Revenue operates a framework of compliance interventions to provide a consistent and graduated response to taxpayer behaviour. They provide extensive opportunities for taxpayers to get things right and to voluntarily correct mistakes. They conduct risk-focused and proportionate interventions in response to identified risks of possible non-compliance.
There are 3 levels of Compliance Intervention. The following paragraphs briefly explain each Level and what you should do if you are notified of an intervention. Any notification of an intervention will clearly state whether the Intervention is at Level 1, 2 or 3.
Level 1
Level 1 Compliance Interventions are designed to assist taxpayers in being voluntarily compliant. Under a Level 1 Intervention, taxpayers can address any compliance matters through Self-Correction or by making an Unprompted Qualifying Disclosure as appropriate.
Level 2
Level 2 Compliance Interventions may be conducted as either a Risk Review (generally a review of a single tax issue) or a more in-depth Audit of your tax affairs. A Level 2 Notification will set out the taxes and periods under examination. Following notification of a Level 2 Intervention, you cannot avail of Self- Correction or make an Unprompted Qualifying Disclosure.
However, you can still address compliance issues, mitigate penalties, if applicable and avoid publication as a defaulter by making a Prompted Qualifying Disclosure within 28 days of the notification and by cooperating fully throughout the intervention.
If you wish to make a prompted qualifying disclosure and require more that the 28 days’ notice provided by the notification letter, you can contact Revenue within 21 days of the notice to seek an additional 60 days in which to submit a prompted qualifying disclosure.
A Risk Review is deemed to commence 28 days after the date of the notification letter. An Audit commences once Revenue begins examining your books and records. In the case of an Audit, a taxpayer may make a prompted qualifying disclosure on the day of the audit but prior to the examination of the books and records by Revenue.
Level 3
Revenue Investigation is the Level 3 Compliance Intervention and usually commences with effect from the date of notification. There is no opportunity to make a Qualifying Disclosure but penalties may still be partially mitigated where you cooperate fully with the investigation.
What you should do when you receive notification of a Revenue Compliance Intervention?
You should carefully note the level and scope of the intervention, review your records and consider whether you should submit either a Self-Correction or a Qualifying Disclosure in conjunction with your accountant.