Facing a FIRS (Federal Inland Revenue Service) tax audit can be daunting for any business in Nigeria. However, with proper preparation and expert guidance from Faturoti Taiwo & Co., a leading accounting firm in Lagos, you can navigate the process smoothly and avoid penalties.
In this blog, we’ll break down what triggers FIRS audits, steps to prepare, and how our tax consultants in Lagos can help ensure compliance with minimal stress.
1. What Triggers a FIRS Tax Audit?
The FIRS may select your business for an audit based on several factors, including:
Discrepancies in Tax Returns – Inconsistent filings or under-reported income. High-Risk Industries – Sectors like oil & gas, banking, and large retailers face more scrutiny. Random Selection – FIRS conducts periodic audits to ensure compliance. Whistleblower Reports – Tips from employees or competitors can prompt an investigation.
Faturoti Taiwo & Co.’s Tax Compliance Services
2. Steps to Prepare for a FIRS Tax Audit
a) Keep Accurate Financial Records
- Maintain well-organized books (digital or physical) for at least 6 years.
- Use accounting software like QuickBooks or Sage for seamless record-keeping.
FIRS Record-Keeping Requirements
b) Reconcile All Tax Filings
- Ensure VAT, WHT, CIT, and PAYE filings match your financial statements.
- Identify and correct discrepancies before the audit.
c) Conduct a Pre-Audit Review
- Hire a tax consultant in Lagos to review your records and identify red flags.
- Simulate an audit to test your readiness.
Our Tax Audit Support Services
d) Gather Required Documents
- Bank statements
- Invoices and receipts
- PAYE records
- Previous tax returns
3. What to Do During the FIRS Audit
a) Cooperate with FIRS Officials
- Assign a designated contact person (preferably your accountant) to liaise with auditors.
- Provide requested documents promptly but verify requests to avoid unnecessary disclosures.
b) Seek Professional Representation
- A tax expert from Faturoti Taiwo & Co. can negotiate on your behalf and prevent aggressive assessments.
c) Avoid Common Mistakes
- Don’t ignore audit notices – Late responses lead to penalties.
- Don’t alter records – Tampering with documents is a criminal offense.
FIRS Penalties for Non-Compliance
4. Post-Audit Actions
a) Review the FIRS Assessment Report
- Check for errors in calculations or misinterpretations of tax laws.
b) File an Objection (If Necessary)
- If you disagree with findings, you have 30 days to appeal.
- Our tax dispute resolution team can assist with objections and tribunal cases.
Tax Dispute Resolution Services
c) Implement Corrective Measures
- Adjust accounting processes to prevent future issues.
- Schedule regular tax health checks with a professional firm.
5. How Faturoti Taiwo & Co. Can Help
At Faturoti Taiwo & Co., we provide:
FIRS Audit Preparation & Support – Minimize risks before, during, and after audits. Tax Compliance Services – Accurate filings to avoid triggers. Dispute Resolution – Expert representation in FIRS negotiations.
Avoid FIRS troubles! Contact us today for a consultation.