Further to our Tax Alert Issue No. 4.2 of April 2020, communicating the indefinite suspension of all Federal Inland Revenue Service (FIRS)’ field audit, investigations and monitoring exercises (“the exercises”), the FIRS today, 2 June 2020 via its Public Notice announced the resumption of all audits, investigations and monitoring exercises. The exercises are to resume in two phases: the reconciliation of tax findings arising from desk reviews, monitoring visits and tax and investigation exercise are to resume immediately, while the field audits will begin effective Tuesday, 30 June 2020.
The FIRS also commended taxpayers who have filed returns and paid their tax liabilities during this COVID-19 pandemic.
While we commend the FIRS for suspending the exercises earlier, the immediate resumption of the reconciliation exercises will facilitate prompt closure of ongoing tax disputes and allow taxpayers to take advantage of the extended waiver of interest and penalty window. However, the proposed date for commencing field audit visits may appear too early as companies are only returning back to business following the lockdown and will require some more time to be fully operational.
Further, with the limited human resources that businesses will have in compliance with the safety protocols announced by the health authorities, it is likely that companies will seek extension of field audit notices received from the FIRS. The FIRS may, therefore, consider adopting remote audit processes, or defer the commencement of field audit visits until a later date.
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