When people talk about “Revenue coming after them,” they typically conflate several distinct types of compliance intervention that Revenue conducts. The differences matter - both for how you respond and for the potential consequences you are facing.
Revenue’s Code of Practice for Revenue Audits and other Compliance Interventions defines the different categories clearly. Understanding which category you are in shapes every subsequent decision.
Level 1: Profile Interviews and Aspect Queries
At the lowest intensity end of Revenue’s compliance work are profile interviews and aspect queries. These are targeted, limited-scope contacts where Revenue has a specific question about a specific aspect of your tax affairs.
An aspect query might say: “Your 2023 income tax return shows motor expenses of 18,400 euro. Please provide details of the vehicles used for business, the business mileage claimed, and the basis for this claim.”
This is not an audit. Revenue is not examining your entire tax affairs. They have one specific question about one specific item. But the response matters - if your answer is unsatisfactory, Revenue may escalate to a more comprehensive examination. For guidance on responding to Revenue letters, see our guide to handling Revenue correspondence.
The penalty framework that applies to audit does not apply to aspect queries. However, if you make a qualifying disclosure in response to an aspect query, specific penalty rates apply.
What to do: Provide a clear, accurate, documented response within the deadline specified. Do not volunteer information outside the scope of the query. Do not provide incomplete or misleading information.
Level 2: The Compliance Check (Risk Review)
A compliance check (sometimes called a risk review) is a broader than an aspect query but still falls short of a full audit. Revenue has identified a range of potential issues and is asking you to demonstrate compliance across several areas of your return.
The process is typically conducted by correspondence - Revenue sends a questionnaire or a list of requested documents, you respond, and Revenue reviews the response. If the response is satisfactory, the matter closes. If not, it may escalate.
This is where many taxpayers make the mistake of responding without proper advice. A compliance check that is well-handled often closes at this level. One that is poorly handled - with incomplete responses, inconsistencies, or information that raises new questions - can trigger a full audit.
The voluntary disclosure option is available during a compliance check, and making a disclosure at this stage attracts the “prompted” penalty rates (lower than audit finding rates, higher than unprompted rates).
Level 3: The Revenue Audit
A formal Revenue audit is a comprehensive examination of your tax affairs for a specified period. It is formally notified in writing, covers specified tax heads and periods, and is conducted by a named Revenue officer.
The full audit framework - including the formal voluntary disclosure window, the penalty tiers for different behaviours, and the structured examination process - applies from this point. We covered the full audit process in detail in our dedicated guide to Revenue audits.
The distinction between a Level 2 compliance check and a Level 3 audit matters for penalty purposes. The formal audit notification creates the “prompted voluntary disclosure” window - a specific short period within which any disclosure made attracts the lower prompted rates. Before that window, any disclosure is unprompted and attracts the lowest rates. After the examination begins, you are in full audit territory.
Level 4: Investigation (Enquiry Under Section 900)
A Revenue investigation under Section 900 of the Taxes Consolidation Act 1997 is a significantly more serious matter than a civil audit. It is Revenue exercising statutory powers to investigate suspected serious tax fraud or tax evasion.
The key differences from a civil audit:
Statutory powers. Revenue can issue formal notices requiring production of documents. Non-compliance with a Section 900 notice is a separate criminal offence.
No voluntary disclosure protection. Once Revenue has commenced an investigation under Section 900, the normal voluntary disclosure framework does not apply. The generous penalty rates available for voluntary disclosures before audit are no longer available.
Potential criminal prosecution. Section 900 investigations can lead to criminal prosecution, not just a civil settlement. While most tax compliance cases resolve civilly, an investigation at this level means criminal prosecution is a real possibility.
Involvement of the Investigations and Prosecutions Division. Cases at this level are handled by Revenue’s specialist investigation unit, not by district officers.
If you receive any communication from Revenue’s Investigations and Prosecutions Division, you need legal representation - a solicitor as well as a tax advisor - immediately.
The practical takeaway: if you receive a Section 900 notice or any communication that indicates a criminal investigation, do not attempt to handle it without specialist professional advice.
Level 5: The Revenue Prosecutions Division
Revenue’s most serious cases are referred to the Director of Public Prosecutions for criminal prosecution. This is reserved for cases involving deliberate, large-scale tax fraud - fictitious invoicing, systematic under-declaration over many years, offshore concealment, and similar conduct.
The vast majority of Irish taxpayers who find themselves dealing with Revenue will never come anywhere near this level. It is included here for completeness, not because most readers need to worry about it.
The Spectrum in Practice
The practical relevance of this spectrum for most Irish business owners is this:
If you receive a routine compliance check letter, respond carefully and accurately, ideally with professional help. The matter will likely resolve at that level.
If you receive a formal audit notification, get professional representation immediately and consider whether a prompted voluntary disclosure is appropriate.
If you know you have an undeclared liability, make an unprompted voluntary disclosure before Revenue makes any contact at all. This is always the lowest-cost option.
The trajectory from Level 1 to Level 4 is not inevitable - it is largely driven by how the taxpayer responds at each earlier stage. Cases that are handled well at Level 1 or 2 rarely escalate. Cases that are handled poorly, or where the taxpayer has significant undeclared liabilities, are more likely to progress up the scale. Understanding how Revenue selects businesses for audit can help you assess where you stand.
Cross-Border Complexity
One area where the investigation risk is elevated is where tax affairs involve both Irish and UK jurisdictions and there is suspected deliberate evasion. Revenue and HMRC cooperate in serious cross-border tax fraud cases. An individual or company with operations on both sides of the border that has deliberately exploited the complexity to conceal income is at risk of attention from both authorities simultaneously.
This is not a routine scenario. But it is worth flagging that cross-border structures that were initially established for legitimate commercial reasons can create compliance exposures that look different to a Revenue investigator than they do to the business owner who created them. Professional review of cross-border structures is particularly important for this reason.
Paddy Malone FCA AITI
Paddy is the principal of Malone & Co. Chartered Accountants in Dundalk. A Fellow of Chartered Accountants Ireland and a Chartered Tax Consultant with the Irish Tax Institute, he has been advising businesses across County Louth and the North-East for over 35 years.