Coming forward before a Revenue audit can reduce your penalty from 100% to as low as 10% — and eliminate the risk of criminal prosecution.
Revenue's qualifying disclosure scheme allows taxpayers to come forward with irregularities before Revenue finds them. The earlier you disclose, the lower the penalty rate:
| Disclosure type | Timing | Max penalty rate | Criminal risk |
|---|---|---|---|
| Unprompted qualifying disclosure | Before any Revenue contact | 10% of tax | None |
| Prompted qualifying disclosure | Within 2 months of Revenue notification | 30% of tax | Eliminated |
| Non-qualifying disclosure (prompted) | During or after audit | Up to 75% | Possible |
| No disclosure — deliberate | Revenue discovers irregularity | Up to 100% | Yes |
Go back through your returns for each year — typically the 4-year lookback plus any additional years if the irregularity spans further. An accountant can do this comprehensively.
Work out the correct liability for each year. Include income tax, PRSI, USC and any VAT or PAYE underpayments.
Write formally to Revenue identifying yourself, the tax heads, the periods, the amounts and the nature of the irregularity. The letter must be complete and accurate — a partial disclosure does not qualify. D'Emilia Accounting prepares voluntary disclosure letters; contact us on WhatsApp if you need this done correctly.
Send the letter to your local Revenue District (or large cases unit if applicable) with a cheque or bank transfer for the full outstanding tax — or a firm proposal for phased payment.
Revenue will confirm whether the disclosure qualifies, apply the appropriate reduced penalty rate, and issue assessments for the outstanding amounts. Interest under s1080 also applies to the underpaid tax.
Revenue penalties can be reduced through voluntary disclosure or appealed to the Tax Appeals Commission. Speak to D’Emilia Accounting before paying or responding to Revenue — the timing determines your options.
A voluntary disclosure (also called a qualifying disclosure) is a formal notification to Revenue that you have a tax irregularity — underpaid tax, incorrect return, undisclosed income — made before Revenue initiates an audit or investigation into your affairs. Making a qualifying disclosure significantly reduces penalties and eliminates the risk of criminal prosecution.
Under TCA 1997 s1077E, a prompted qualifying disclosure (made within 2 months of Revenue contacting you) reduces the applicable penalty by up to 75%. An unprompted disclosure (before any contact from Revenue) reduces the penalty rate to as low as 10% of the tax owed.
An unprompted disclosure is made before Revenue contacts you at all — you come forward entirely on your own initiative. A prompted disclosure is made after Revenue has been in contact (e.g. a routine audit notice) but before the audit formally begins. Unprompted gets the larger reduction.
A qualifying unprompted voluntary disclosure generally protects you from criminal prosecution for the disclosed irregularity. A prompted disclosure that meets Revenue's requirements also protects against prosecution in most cases. Criminal prosecution is reserved for deliberate evasion with no disclosure.
A qualifying disclosure must: identify the periods and taxes involved; give a full and accurate account of the irregularity; include the full tax amount owed for all relevant periods; and be accompanied by payment (or a proposal for payment). Partial disclosures that omit material facts do not qualify.
Yes, if Revenue has only sent a routine audit notification. You have a window after the notification to make a prompted disclosure. However, once Revenue has progressed into a full investigation, the standard voluntary disclosure regime generally no longer applies. Act immediately when you receive a Revenue notification.
Disclaimer: General information based on TCA 1997 s1077E. Not legal or tax advice. Always seek professional advice before making a disclosure.
Our accountants can review your situation, prepare a voluntary disclosure, or represent you through the Tax Appeals Commission process — reducing or eliminating your penalty.