The prospect of a tax audit within your company is stressful and can lead to disastrous financial consequences. As a tax lawyer, I stand by your side to help you properly anticipate this eventuality by equipping you with relevant and effective defence strategies.
How can you grasp the legal intricacies of a tax audit with real insight and choose the appropriate solutions?
Our firm, which specialises in the ever-changing field of taxation, informs, advises and assists you.
The features of the "desk audit" (contrôle sur pièces)
The tax authorities, through the Directorate General of Public Finances (DGFiP), have full latitude to carry out checks on your returns. This is the "desk audit", conducted by officers of this administration who are well versed in the exercise.
The administration can also rely on its right of disclosure (droit de communication) with the URSSAF, employers, notaries, financial institutions, insurance companies, etc. in order to cross-check information. This review may lead to requests for documents and clarifications regarding all of your tax information.
As a taxpayer, you can consult the "Charter of rights and obligations of the audited taxpayer" (Charte des droits et obligations du contribuable vérifié) on the administration's website or at the tax offices. This document enables you to better understand the rules of the tax audit.
It states, among other things, that the business owner may be assisted by an adviser: a tax lawyer, etc. It is in this context that our involvement proves justified, and indeed necessary.
The tax audit of accounts (vérification de comptabilité)
This procedure is the most frequent and the most common. When people talk about a tax audit, they are referring to this procedure, which may concern any business, generally at least once "in its lifetime".
It is triggered by the receipt of an audit notice (form no. 3927-SD). In practice, this document is sent approximately 15 days before the start of the audit (the law only requires a reasonable period, of at least two working days according to case law). In particular, it states the date of the inspector's first visit and the years the inspector intends to examine. As stated above, this document mentions the possibility of consulting the charter of rights and obligations of the audited taxpayer. This document is indeed available to enable you to master the various guarantees on which you can rely. These concern:
• The right to be informed of an on-site audit before the inspector's visit;
• The possibility of being assisted by the adviser of your choice;
• The right to an oral and adversarial exchange with your auditor;
• Knowing the potential financial consequences of the proposed reassessment decided by the administration;
• The duration of the audit, limited to 3 months for small businesses, subject to a reservation if the accounts show serious irregularities;
• The impossibility for a business to be audited again for a period already audited.
As a taxpayer and in the context of a tax audit of accounts, you also have the possibility of meeting your auditor's superiors, up to departmental level.
The adversarial reassessment procedure (procédure de rectification contradictoire)
This is the most widely used procedure in tax audits. It nevertheless concerns taxpayers who comply with their reporting obligations. It offers them broader guarantees including, among other things, a significant right of oversight, and the burden of proving irregularities lies with the administration rather than the taxpayer. On the other hand, for taxpayers who do not file their returns, or file them too late, it is more restrictive.
In this first case, the inspector is therefore obliged to offer you an oral and adversarial discussion during the visits. As far as possible, these discussions should include relevant arguments on both sides. As regards the review of your accounting documents, the auditor cannot take them away, since this is an on-site audit. By also being advised during these visits, you will generally lighten your burden and avoid any blunders. Indeed, conducting such discussions without being overwhelmed by emotion is no easy task. Your tax lawyer helps to temper matters and enables you to conduct these meetings within an effective framework that fully protects your interests.
Furthermore, subject to certain exceptions provided for in Article L. 52.-II. of the French Tax Procedures Handbook (Livre des procédures fiscales, LPF), the audit may not last longer than three months where turnover or gross receipts excluding VAT do not exceed the following amounts:
• €945,000 (limit applicable in 2026) for industrial or commercial businesses whose activity is selling goods, articles, supplies and foodstuffs to take away or to be consumed on the premises, or providing accommodation;
• €286,000 (limit applicable in 2026) for other industrial or commercial businesses (service providers in particular) and for taxpayers carrying on a non-commercial activity.
You should also know that the date of the last visit ends the tax audit of accounts procedure. This date must be stated on the first page of the proposed reassessment (form no. 3924-V-SD).
If these provisions are not complied with, the audit may result in the nullity of any reassessments against the business.
In all cases, there are prerequisites to be aware of. You must indeed make sure that the document informing you of a tax audit is compliant. To this end, it must include in particular:
• the name of the inspector;
• the contact details of the department, ;
• the name of the superior;
• the name and address of the departmental contact (interlocuteur départemental) to be approached in case of difficulty;
• the start date of the audit. You must have at least two days between receipt of the notice and that date;
• the list of financial years audited.
The remote examination of accounts (examen de comptabilité)
Since 1 January 2017, DGFiP officers have been able to carry out the examination of the accounts of business taxpayers electronically. Moreover, since 2017, the framework of this audit has evolved, allowing it to be carried out either on site or remotely.
This option concerns businesses with computerised accounts. The auditor can carry out the audit without going to the company's registered office or, where applicable, to the chartered accountant's office.
Consequently, save for exceptions, all businesses are liable to be audited remotely, from very small businesses to the largest companies, including listed ones.
This audit, in step with the development of business accounting, which is increasingly carried out electronically, combines features of the desk audit and of the tax audit of accounts. To this end, the business about to be audited receives a notice of examination of accounts (form no. 3923-EC-SD).
Much like the desk audit, this document must state the period under review. It must also inform you of the possibility of being assisted by an adviser of your choice.
Furthermore, the public finance inspector in charge of your examination asks you to send the accounting entries files (fichiers des écritures comptables, FEC) within 15 days of receipt of the notice. These are all the computer files, in Excel or other formats, relating to the financial years under review.
You risk a fine of €5,000 if you do not provide the documents to be audited within the prescribed time limit, as well as the risk of being subjected to an even more burdensome tax audit of accounts procedure.
As soon as your files are received, the tax officer carries out all the checks necessary to ensure that they match the tax return packages filed by your business. He or she obviously has the right to ask you for any clarification regarding the entire period under review. He or she may also ask you to provide supporting documents.
The main feature of this type of audit is that exchanges with the inspector are also carried out electronically. Letters, e-mails and telephone calls are the preferred means of communication.
You may nevertheless go to the inspector's office if you so wish.
At the end of a maximum period of 6 months, your inspector sends, where applicable, a proposed reassessment no. 3924-V-SD. This form is sent with a view to imposing reassessments on you. Otherwise, if no reassessment is envisaged, the inspector is required to send you a notice of no reassessment.
While this type of procedure is a response adapted to new technologies, it also increases the number of audits, since they are made easier.
The adversarial examination of personal tax situation (ESFP). How does it work?
Why this examination?
This is a very specific audit concerning inconsistencies found between your declared income and your wealth and/or your lifestyle indicators.
How does it proceed?
You are informed beforehand by means of an audit notice (form no. 3929-SD).
The audit in principle lasts no longer than 1 year.
It in principle takes place at the offices of the tax authorities.
Risks: justification procedure with formal notice no. 2172 bis-SD
Receipt of the proposed reassessment marks the end of the procedure.
The procedure is similar to a tax audit of accounts. First, you are informed by means of an audit notice (form no. 3929-SD). This notice also states, in particular, that you may consult the charter of rights and obligations of the audited taxpayer and be assisted by an adviser of your choice, such as a tax lawyer.
An oral and adversarial discussion is required, at the end of which the tax officer may send you requests for justification no. 2172-SD. These must be answered where the officer has gathered probative evidence of discrepancies showing higher income than that declared during the years under review.
The tax authorities may use the request-for-justification procedure provided for in Articles L. 16 and L. 16 A. of the LPF where unexplained sums have been credited to bank and similar accounts. These are amounts out of proportion with the income declared by the taxpayer.
More specifically, the inspector may formally question you in writing if the total amount of credits recorded on your cash accounts used for personal purposes – after elimination of internal transfers – is at least equal to twice the amount of your declared income or exceeds it by at least €150,000.
In the absence of material evidence that all or part of the bank credits concerned are not taxable, the sums considered unexplained are subject to an ex officio assessment to income tax and social contributions pursuant to Article L. 69 of the LPF.
The sending of the proposed reassessment no. 3924-E-SD closes the ESFP procedure.
What happens after the audit?
Apart from cases where no reassessment is made against you, all audit procedures therefore end with a proposed reassessment. It must be reasoned so as to enable the taxpayer to understand it and to respond by sending his or her observations, to which the tax authorities are obliged to reply by letter no. 3926-T-SD entitled "reply to the taxpayer's observations".
If disagreements with the inspector persist, you can make use of the various remedies provided for by the charter of rights and obligations of the audited taxpayer. These include, among others:
• a meeting with the hierarchical superior;
• then, save for exceptions, with the departmental contact
• Possibly a referral to the Departmental Commission for Direct Taxes and Turnover Taxes (Commission départementale des impôts directs et des taxes sur le chiffre d'affaires) if it has jurisdiction to give an opinion on the dispute concerned.
The Firm's commitment
Given the complexity of the various procedures and the appeal processes, which can prove very lengthy, engaging an experienced tax lawyer is very often the most appropriate response. The lawyer is both an adviser who guides you through the steps to follow along the long course of your audit and its conclusions, and a privileged intermediary with the tax authorities.
Our main mission is to equip you with the most relevant strategy, depending in particular on the nature and grounds of the reassessments to which you may be subject.
As a dedicated tax lawyer, we defend your rights throughout the examination of your accounts. We also stand by your side in the event of litigation and to represent you, where necessary, before the Courts.
