The sheer number of tax returns to be checked forces the tax authorities to diversify their action and to choose between a summary review and an in-depth audit.

This choice follows a set order. The summary review always precedes the in-depth audit. For this reason, its scope is much broader and its effectiveness less evident.

A near-universal summary review may lead to a specific in-depth audit. In that case, our tax law firm will be able to provide you with the assistance you need.

THE SUMMARY REVIEW

This review must be capable of being carried out without any travel or special investigations on the part of the tax office.

It is thus located in two places: the tax inspector’s office and the taxpayer’s file.

However, its scope may vary.

That is why a distinction is customarily drawn between the formal review (contrôle formel) and the desk audit (contrôle sur pièces).

The formal review

The formal review covers all actions relating to the correction of obvious clerical errors found in tax returns. Consequently, this examination does not concern the accuracy of the data in the return, but only the way in which that data is presented. Thus, for income tax purposes, the formal review is limited to checking the codes entered and examining the documents attached to the return.

The desk audit

Unlike the formal review, the desk audit must be exhaustive. It therefore involves an examination that is both critical and comprehensive.

Every item in the return is checked and compared against all the information and documents held by the tax office.

Given the growth in the number of taxpayers, the authorities have introduced a selective review of tax returns.

They still check whether all taxpayers have actually filed their returns, and any return may, in principle, be audited.

In fact, each year the desk audit covers only a fraction of returns, selected either on the basis of indicators or because of their size.

In practice, this selection of tax returns is an undeniable factor of efficiency, which must nevertheless be seen in the context of the summary review. By definition, this review is quick.

Moreover, it is office-based work carried out using the information held by the tax office. The authorities may need to request additional information from the taxpayer.

THE IN-DEPTH AUDIT

The difference between a summary review and an in-depth audit stems essentially from the resources deployed and the aim pursued in each situation; in an in-depth audit, the tax authorities generally arrive with strong suspicions about the taxpayer, which makes it all the more necessary to be represented by a tax lawyer.

Generally speaking, the in-depth audit is the process of verifying the accuracy and good faith of a tax return by comparing it with external information.

This process may cover all the taxes whose assessment the authorities oversee. There is thus, for example, a review of registration duties (droits d’enregistrement), focusing in particular on the value declared by the person liable.

In certain cases, however, the authorities require close cooperation from the taxpayer. This is commonly referred to as a tax audit (vérification).

For this reason, this procedure is far more inquisitorial in nature, which moreover explains the formalities that surround it, for the benefit of the taxpayers being audited.

In this respect, a distinction can be made between the audit of accounts (vérification de comptabilité) and the adversarial examination of personal tax situation (examen contradictoire de la situation fiscale personnelle).

Our tax law firm can assist you.