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Tax audit: understand why common mistakes can lead to the identification of even more complex problems
Review of certain points in a tax return may lead the Federal Revenue Office to find other mistakes
Photo: Marcello Casal Jr – Agência Brasil
In October, the Federal Revenue Office released a balance of the Individual Income Tax (Imposto de Renda de Pessoa Física - IRPF) 2021, concerning 2020. There were 36,868,780 submitted returns, and among these, 869,302 needed to go through a tax audit. This corresponds to 2.4% of the total.
Something that usually goes unnoticed about tax withholding is that simple mistakes can create a magnifying glass to deeper problems. That is because the audited tax return will be reviewed more carefully, which can result in the identification of errors and omissions that were not previously perceived in the cross-checking of information.
Main reasons for getting audited
The top reasons that caused tax audits in this edition were:
- 41.4% - Omission of earnings subject to annual adjustment, such as salaries, lawsuits and rental income.
- 30.9% - Tax base deductions, such as medical expenses, contributions to official social security, private social security and alimony.
- 20% - Differences between what is in the Withholding Income Tax Return (Declaração do Imposto sobre a Renda Retido na Fonte - DIRF) and what was declared by the individual, in addition to other items related to DIRF.
- 7.7% - Deductions from the tax due, receipt of accumulated income and difference of information on carnê-leão (monthly income tax) or complementary tax payment.
As can be seen, the main occurrences are related to simple issues, which may have been caused by lack of attention or some information that is not under the taxpayer's control.
Augusto Andrade, partner at DPC and specialist in Individual Taxation, says that the reasons that lead to tax audits, identified by electronic cross-check, are usually generic like that.
But he also warns that, when requesting clarification and additional information from the taxpayer, the Federal Revenue Office may end up finding more complex problems.
“When a person is audited due to a difference in the payment of DARF monthly installments, for example, the Federal Revenue Office requests all proof of tax payment, including DARFs of capital gains. This in-depth review can bring to light other inconsistencies”, he explains.
I am facing a tax audit, what should I do?
The taxpayer has some possible paths:
Correction through an amending tax return.
When taxpayers understand that they have made a mistake or provided incomplete information, they can get ahead and rectify it. But this is only possible when you have not yet received a notice.
Waiting for communication from the Federal Revenue Office.
In this case, the taxpayer will receive a list of documents that need to be presented in a certain period, to explain the pending items.
Presenting proofs and documents of declared values indicated as pending.
In this case, it is necessary to check the guidelines of the DIRPF Processing Statement and formalize a tax audit Digital Process through the e-CAC Portal.
Specialized support helps you avoid problems
“Our guidance is always focused on preventive action, so that all points in the tax return are filed correctly and carefully. In addition, it is worth resorting to specialized support, especially when the taxpayer has a greater volume of goods, investments and has experienced complex tax situations in the calendar year”, says Andrade.
In relation to IRPF 2021, now is the right time for correction. Taxpayers who got audited and are afraid of having committed mistakes among those initially pointed out by the cross-checking of information can count on DPC's support to regularize the situation. Get to know the customer service for Individuals.
How may DPC help your company?
Domingues e Pinho Contadores has a specialized team ready to assist your company.
Contact us by email at dpc@dpc.com.br
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