Dáil Éireann debate -
Tuesday, 5 Nov 1996

Vol. 471 No. 1

Written Answers. - Farm Audits.

Kathleen Lynch

Question:

79 Kathleen Lynch asked the Minister for Finance the number of random audits carried out on farmers in each of the years from 1990 to 1995 and in the first nine months of 1996; the number of farmers who were found to be non-compliant on foot of such audits; and if he will make a statement on the matter. [20291/96]

Minister for Finance (Mr. Quinn)

The random audit programme began in 1992. No new random cases were selected in 1993 for audit due to concentration of resources on work related to the tax amnesty and major restructuring of the audit programme. Following is the relevant information in respect of random audits of tax returns from farmers which were initiated in the years 1992, 1994, and 1995 and completed up to 30 September 1996:

Random audits on farmers initiated in years:

	1992	1994	1995
Number of audits closed at 20 September 1996	43	20	12
Number where tax return was accepted	26	17	8
Number producing additional tax yield	17	3	4

Information on random audits initiated in 1996 is not yet available.

In 68 per cent of the completed random audits for the three years in question there was no additional yield and a further 7 per cent produced a yield of £1,000 or less per case. The individual yield from the balance varied from £1,000 upwards but it can be taken that the higheryielding cases, and most of the lower and medium-yielding cases, would have been picked up by targeted audits had they not already been the subject of a random audit.

The vast majority of cases who are selected for audit are selected on the basis of perceived defects in their tax returns or supporting accounts and not on a random basis. The total number of these comprehensive self-assessment audits on the self-employed, including farmers, initiated since inception in 1990 to the end of 1995 was 12,589 (excluding companies). These are in addition to normal PAYE (employers) and VAT audits. The purpose of the random element of the audit programme is to demonstrate to taxpayers that there is a risk of audit for every self assessing taxpayer even where incorrect returns have the appearance of being correct. However, experience suggests that taxpayer behaviour is influenced more by the perception of Revenue's ability to detect suspect tax returns in a systematic way, rather than by the risk of random selection of a return.

The Revenue Commissioners have advised me that all their audit programmes, including the random programme, will be kept under review.