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Theft or understated profits?

08 December 2020 / Ray McCann
Issue: 4772 / Categories: Comment & Analysis
Inaccurate accounts

Key points

  • An accounting discrepancy in business accounts.
  • Was there an accounting error evasion incorrect invoices or theft?
  • There was no criticism of the accountant and the taxpayer was a credible witness.
  • The standard of proof is the balance of probabilities.
  • No conclusion was reached on the contention of theft.
  • The importance of reviewing accounts in detail.

Tax inspectors of a certain vintage may remember what was for many their first step into the world of tax investigations: the accounts investigator course (AIC) which was the backbone of Inland Revenue training during the 1970s and 1980s. Among other things the course taught basic double-entry bookkeeping investigation law and practice the approach to penalties and so on. Its main emphasis was to highlight the myriad ways in which the accounts of self-employed taxpayers might be inaccurate.

Of course in those days...

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