Revenue’s Code of Practice for Compliance Interventions 2022

This article is based on Revenue’s Code of Practice for Compliance Interventions 2022 (the Code), which is effective from 1 May 2022 and is relevant for candidates sitting TX and ATX (IRL) from June 2023 onwards.

Simply put, the Code is a set of guidelines for when Revenue is conducting enquiries into a taxpayer’s affairs. Revenue, taxpayers and tax practitioners must follow these guidelines.

The Code sets out a compliance intervention framework intended to provide a consistent graduated response to taxpayer behaviour, ranging from extensive opportunities to voluntarily correct mistakes up to the pursuit of criminal sanctions for cases of serious fraud or evasion.

Revenue interventions will now be classified under one of three risk levels with the type of disclosures available to a taxpayer varying at each level. The Revenue document colour-codes the respective levels with level 1 being green, level 2 being amber and level 3 being red reflecting the extent of mitigation and penalties applicable.

Compliance Intervention Framework - Overview


Level 1 compliance interventions

Level 1 compliance interventions are intended to remind and encourage taxpayers to fulfil their compliance obligations. In other words, it provides an opportunity for taxpayers to correct errors without the expense and stress of a more in-depth inquiry.

A level 1 intervention only occurs where Revenue has not already engaged in any detailed examination or review of the matters under consideration. Examples would include a reminder of a notification of any outstanding tax returns or a request from Revenue to self-review.

A level 1 compliance intervention may identify issues that warrant the initiation of either a level 2 or level 3 compliance intervention. Also, where a taxpayer does not respond to a level 1 intervention, Revenue may proceed to examine the matter as a part of either a level 2 or level 3 intervention where a sufficient level of risk exists. Where a level 2 or level 3 intervention is planned, the taxpayer will receive an appropriate notification. The opportunity to make an unprompted qualifying disclosure (see ‘Notification of a level 2 compliance intervention’ and ‘Unprompted qualifying disclosure’ sections below) ceases on the issue of such a notification.

Note: level 2 or 3 interventions are not necessarily preceded by a level 1 intervention. Where Revenue has identified a specific risk in respect of a taxpayer either a level 2 or 3 compliance intervention will be initiated based on the level of risk involved.

Level 2 compliance interventions

Level 2 interventions are intended to challenge non-compliance by the taxpayer. Examples would include risk-based reviews and checks on data provided by taxpayers in their tax returns. These risk-based reviews/checks will range from examination of a single issue within a tax return to comprehensive tax audits. Notification of a level 2 intervention will be issued to taxpayers in all cases.

Notification of a level 2 compliance intervention
A taxpayer will receive a 28-day notice of a level 2 compliance intervention. The notification letter will clearly indicate the type of compliance intervention to be undertaken – ie risk review or audit (see ‘Types of level 2 compliance interventions’ section below).

The notification letter in respect of both a risk review or an audit, will confirm that the intervention will be considered to have started 28 days after the date of the letter, unless otherwise agreed. (In exceptional circumstances, it may be possible to agree an alternative commencement date provided that the reason for the request is legitimate and reasonable).

Following receipt of such a notification and prior to the commencement of the inquiry, the taxpayer will have the opportunity to address areas of default or non-compliance through the making of a prompted qualifying disclosure and through full cooperation with the intervention. (Remember that the opportunity to make an unprompted qualifying disclosure ceases on the issue of such a notification).

Types of level 2 compliance interventions

  • Risk review
  • Audit

A risk review is a focused intervention to examine a risk or a small number of risks on a tax return. For example, the risk review may focus on a particular aspect or issue on a tax return or from a risk identified from REAP (Revenue’s Risk Evaluation, Analysis and Profiling system).

A revenue audit is an examination of the compliance of a person with tax and duty legislation having particular regard to the accuracy of specific returns, statements, claims or declarations. Under the compliance intervention framework, an audit will be initiated (as opposed to a level 2 risk review) where there is a greater level of perceived risk.

Where a taxpayer does not make a prompted qualifying disclosure, and the risk review has commenced, additional information may come to light which requires widening of the scope of the intervention (beyond the tax/duty type and period specified in the original risk review letter). In such cases, the risk review may be escalated to audit and the scope increased to include other tax heads/periods.

Any level 2 intervention may be desk or field based. A desk intervention is conducted without a visit to the taxpayer’s place of business. A field intervention generally involves a visit to the taxpayer’s place of business but may also be conducted via videoconferencing.


Note: All references to field-based interventions should be read as including interventions carried out using video conferencing tools such as Skype or Microsoft Teams.

Level 3 compliance intervention

Revenue investigation is the level 3 compliance intervention within the compliance intervention framework. An investigation focuses on tackling high risk practices and cases displaying risks of suspected fraud and tax evasion. Such investigations are outside the ACCA ATX syllabus.

A useful summary of the various stages:

Overview of Compliance Framework Levels


Corrective options / ways taxpayers can regularise their defaults


Self-correction without penalty

In line with Revenue’s role in supporting voluntary compliance, taxpayers may avail of self-correction without penalty provided the following conditions are met:

  1. The taxpayer notifies Revenue, within the applicable time limit (either in writing or through ROS) of the adjustments being made
  2. The taxpayer provides a computation of the correct tax and statutory interest payable, and
  3. Payment, in full, accompanies the submission.

Note that, although self-correction allows for no penalty, statutory interest will apply.

Self-correction time limits


Time limit for self – correction

Due date for filing return (not due date for payment)

Income tax

Within 12 months of the due date for filing return

31 October/12 November in following year

Corporation tax

Within 12 months of the due date for filing return

Within 8 months and 23 days after accounting period (AP) end

Capital gains tax

Within 12 months of the due date for filing return

31 October/12 November in following year if an individual


within 8 months and 23 days of AP end if a company

Capital acquisitions tax

Within 12 months of the due date for filing return

31 October/12 November in following year

Value added tax (VAT)

Before the due date for filing the income tax or corporation tax return for the chargeable period within which the relevant VAT period ends

31 October/12 November in following year if an individual


within 8 months and 23 days of AP end if a company

PAYE/PRSI/Universal Social Charge (USC)

Before the due date for filing the income tax or corporation tax return for the chargeable period within which the relevant PAYE period ends

31 October/12 November in following year if an individual


within 8 months and 23 days of AP end if a company

Once the time limits for self-correction without penalty have passed, the taxpayer may still avail of the benefits associated with making an unprompted qualifying disclosure (provided that a notification of either a level 2 or 3 compliance intervention has not been issued to the taxpayer).

The benefit of self-correction without penalty will not apply where Revenue has notified a taxpayer of a level 2 or level 3 compliance intervention for the particular period. The benefits of self-correction never apply in cases involving deliberate default.

Correcting an innocent error
Where a tax default is not deliberate and is not attributable to a taxpayer’s failure to take reasonable care in complying with his or her tax obligations, a correction can be made without penalty. Statutory interest will apply.

Technical adjustments
Revenue acknowledges that, on occasion, a default of liability to tax or duty may arise in circumstances where the taxpayer did not act either carelessly or with deliberate intent. In such cases, it is not appropriate that a tax-geared penalty should apply. For example, a taxpayer may have, in good faith, applied the legislation on the basis of a different interpretation to that of Revenue. However, regardless of the reason leading to the liability, Revenue must be satisfied that due care has been taken by the taxpayer and that the matter being corrected did not involve deliberate behaviour. Where the taxpayer can prove this to the satisfaction of Revenue a penalty will not apply. Interest will however apply for the period of the underpayment. In determining whether or not due care has been taken by the taxpayer, Revenue consideration will include:

  • Whether there is published Revenue guidance on the issue
  • Whether there is published legal precedent available (eg determinations of the Tax Appeals Commission or the Courts)
  • The expertise available to the taxpayer in terms of legal, accountancy and tax advice and applied to the position taken by the taxpayer, the complexity of the technical issue and the relevant legislation, and
  • The magnitude of the tax consequences – taxpayers are expected to take an appropriate level of care in relation to complex issues where there are significant amounts of tax at stake.

Revenue will not accept that matters well established in case law and precedent may give rise to a technical adjustment.

Note that if the treatment of a matter is well established in case law and precedent, Revenue will not accept that any treatment that varies from this well-established treatment will qualify for treatment as a technical adjustment.

‘No loss of revenue’

A taxpayer may, on occasion fail to operate the tax system correctly, but in a manner which does not lead to a net loss of revenue to the exchequer (eg the tax due may have been paid in a different period or by a different party). Subject to the conditions below, where Revenue is satisfied that ‘no loss of revenue’ has occurred, they will not seek to collect the tax amounts in question. Liability to a penalty may still apply. Statutory interest may be sought, but this will be limited to any period during which there was a temporary loss of revenue. Any claims in respect of ‘no loss of revenue’ must be made by way of a qualifying disclosure (see ‘Qualifying disclosure’ section below).

A ‘no loss of revenue’ claim will not be accepted where:

  • the default is in the deliberate behaviour category
  • there is an egregious failure of the taxpayer to operate the tax system
  • the ‘no loss of revenue’ claim was not made in writing
  • ‘no loss of revenue’ is not proven to the satisfaction of Revenue
  • the ‘no loss of revenue’ penalty has not been agreed and paid, or
  • the taxpayer has not cooperated fully.

A claim may be part accepted and part rejected. Where a liability arises as a result of a failure to correctly operate the tax system (eg failure to apply withholding taxes to certain counterparties), the taxpayer will need to ensure that the necessary system/procedural changes are implemented to ensure there is no recurrence. Where a taxpayer cannot conclusively prove that no loss of revenue has occurred, the taxpayer should ensure that the appropriate qualifying disclosure is made.

Qualifying disclosure

A qualifying disclosure is a disclosure of complete information in relation to, and full particulars of, all matters occasioning a liability to tax that is made in writing, is signed by or on behalf of the taxpayer and is accompanied by:

  • A declaration, to the best of that person’s knowledge, information and belief that all matters contained in the disclosure are correct and complete, and
  • A payment of the tax and interest on late payment of that tax.

Unprompted qualifying disclosure
This means a qualifying disclosure which Revenue is satisfied has been voluntarily furnished to them before Revenue has issued any notification of intention to commence any level 2 or level 3 compliance interventions in relation to any matter included in the disclosure.

A taxpayer may wish to secure an agreed period of time in which to prepare and make an unprompted qualifying disclosure. The notice of the intention to make an unprompted qualifying disclosure must be given to Revenue in writing before the notification of a level 2 or level 3 compliance intervention is made. A maximum period of 60 calendar days may be requested.

Prompted qualifying disclosure
The notice of the intention to make a prompted qualifying disclosure must be given to Revenue in writing within 21 days of the issue of the notification of a level 2 compliance intervention. A maximum period of 60 calendar days may be requested where a prompted disclosure will be made. The period of 60 days begins from the day on which the notice of intention to make a prompted qualifying disclosure was given.

Schedule of tax geared penalties



Net penalty after reduction where there is:

Category of tax default

Penalty as a % of tax underpaid

Cooperation only

Cooperation AND a prompted qualifying disclosure

Cooperation AND an unprompted qualifying disclosure

Careless behaviour without significant consequences





Careless behaviour with significant consequences





Deliberate behaviour





Note: The mitigation (reduction) of penalties in the above table is available to taxpayers on their first default. In the case of a second or third default, if a taxpayer deliberately or carelessly makes incorrect returns within a five-year period of the first default they may not avail of full mitigation.

Where a taxpayer regularises a default by way of a qualifying disclosure, details of the taxpayer and default will not be included in the quarterly publication of tax defaulters.

Revenue will not initiate an investigation with a view to prosecution in respect of a default where a qualifying disclosure has been made.

Group companies
An intervention carried out in a parent company or a subsidiary company may necessitate interventions in respect of other companies within a group. Prior to the issue of intervention notifications to these, any group company not included in the scope of the original intervention may still make an unprompted qualifying disclosure.

Responsibilities in relation to compliance interventions

Revenue officials
Revenue’s core corporate values include respect, professionalism, and integrity. Revenue officials will provide any assistance required by taxpayers to enable them to cooperate with the compliance intervention. Revenue officials will, where necessary, use appropriate powers to secure access to necessary records during compliance interventions.

Taxpayers are required by law, to cooperate fully with Revenue compliance interventions. A taxpayer who fails to cooperate fully during an intervention may be liable to higher penalties. The responsibility for filing correct returns and providing accurate information to Revenue rests solely with the taxpayer. A taxpayer cannot assign his or her compliance responsibilities to a tax practitioner. Where, due to the actions of a tax practitioner an incorrect return is filed or inaccurate information is provided, Revenue will pursue the taxpayer for tax, interest and penalties as appropriate.

Tax practitioners
In exceptional cases where a tax practitioner actively engages with his/her client to assist in tax evasion Revenue will seek a penalty for assisting in making incorrect returns, etc. and/or press for prosecution for knowingly aiding, abetting, assisting, inciting or inducing another person to make or deliver knowingly or willfully any incorrect return, statement or accounts in connection with any tax. Revenue also expects that any tax practitioner acting on behalf of a taxpayer will provide information and material which, to the best of his or her knowledge, is a true representation of a taxpayer’s tax affairs.

A Revenue officer may disclose taxpayer information to a professional body where he or she is satisfied that the work of an agent does not meet the standards of that body. It will be a matter for the relevant professional body to examine the referral and take any action under its own procedures, where necessary. Such a referral will only be made in the most serious of cases – eg cases of significant and/or repeated nonadherence to professional standards.

Key changes introduced by the 2022 Code

  • The taxpayer is no longer able to make an unprompted qualifying disclosure in a risk review scenario.
  • The notice of intervention has increased from 21 days to 28 days’ notice for a level 2 intervention.
  • The notice period to request time to make a disclosure has increased from 14 days to 21 days.

Paula Byrne FCCA MBA, ATX lecturer, Griffith College, Dublin