We have extensive experience in all types of tax authority audits, being one of the few law firms where our attorneys have worked for many years in various divisions of the National Tax and Customs Administration (NAV). This insider knowledge allows us to understand the tax authority’s mindset, procedural protocols, and strategies, enabling us to effectively represent our clients’ interests at every stage of the audit process.
The purpose of a tax audit is not only to verify tax returns and financial records but also to identify potential irregularities and tax shortfalls. A poorly worded statement, a missed deadline for legal remedies, or a delayed response can lead to serious financial consequences. Therefore, it is crucial to engage expert legal representation from the very beginning of the audit process.
The Importance of Compliance Reviews in Tax Audits
In many cases, a tax audit is preceded by a compliance review, during which the tax authority gathers targeted financial and business information about a taxpayer. Although no final determinations are made at this stage, the findings often serve as the basis for a subsequent audit. The tax authority may request statements, review documents, and examine business relationships with other entities.
Many taxpayers mistakenly believe that a compliance review carries no serious consequences since the tax authority cannot impose tax fines during this phase. However, if irregularities are identified and not properly addressed with a strong legal response, it can lead directly to a formal tax audit. Therefore, it is critical that every communication with the tax authority is legally sound and strategically prepared.
Molnár & Márk Law Association helps clients develop well-documented and substantiated legal positions during compliance reviews to prevent the initiation of burdensome tax audits.
The Self-Audit Surcharge Option
Following a tax audit, taxpayers may still have the opportunity to reduce their assessed tax shortfall through a self-audit surcharge. If an error is discovered during the audit, taxpayers may choose to file a self-audit and amend their previous tax returns before the final determination is made.
However, this option is not always available, and tax authorities often impose strict conditions on self-audits. If not executed correctly, a self-audit can lead to penalty surcharges, late payment interest, or even the loss of legal remedies. Therefore, it is essential to have experienced tax attorneys oversee the process.
Molnár & Márk Law Association provides detailed legal guidance on how to utilize the self-audit surcharge effectively, helping clients minimize unnecessary financial burdens and ensure compliance with tax regulations.
Why Is Tax Authority Representation Important?
Tax authority representation plays a crucial role in ensuring a successful outcome in tax audit proceedings. One of the biggest challenges for taxpayers is not fully understanding their rights and obligations or knowing how to challenge tax authority findings effectively.
At Molnár & Márk Law Association, we provide expert tax audit representation, assisting clients in the following areas:
- Handling official correspondence and statements:
We ensure that all communications with the tax authority are legally precise and strategically sound. - Reviewing audit reports and decisions:
We conduct a thorough analysis of the tax authority’s findings to identify the best legal arguments for challenging their conclusions. - Legal remedies and appeals:
We prepare and file appeals against audit determinations, including representation in subsequent litigation if necessary. - Strategic tax planning:
We help clients develop long-term tax strategies that minimize future risks and reduce the likelihood of tax audits.
Tax audits and compliance reviews are an inevitable part of doing business. If not properly managed, they can have severe financial consequences. Errors made during a compliance review can trigger a full-scale tax audit, while the correct use of tax authority representation and self-audit surcharges can significantly mitigate financial risks.
Molnár & Márk Law Association is committed to providing clients with the highest level of legal representation in tax authority proceedings, ensuring legal fairness and effective defense strategies. If you want your tax matters handled by professionals, contact us today! Reach out via our Contact page.