The first step in a tax audit of an individual by the tax authorities is to gather information.

The tax authorities may use the various procedures described on this page by contacting the individual directly, but they may also contact organizations without informing the individual.

Once the tax authorities have gathered this information and determine that the taxpayer has not paid enough tax, they send the taxpayer a reassessment proposal or a reassessment notice.

Generally, tax audits of individuals are conducted simply through correspondence or email exchanges with the tax authorities.

When reviewing a taxpayer’s personal tax situation, meetings are held at theadministration ; however, it may be possible to request that the meetings take place at the taxpayer’s home.

The tax authorities therefore almost never visit taxpayers' homes, except in the case of tax audits.

The duration of an audit varies greatly depending on the individual’s circumstances and the procedure implemented by the tax authorities.

If a written request is sent to the taxpayer, the taxpayer’s simple response to the tax authorities may bring the audit to a close, or it may prompt further questions fromadministration. Once the taxpayer has responded, they are not necessarily informed that their response has concluded the audit. They will be notified of this through a reassessment proposal or a reassessment notice if the tax authority determines that they have not paid enough taxes.

With regard to the review of an individual’s tax situation, the law generally provides for a one-year period, barring exceptions.

The statute of limitations for individuals varies depending on the type of tax. Under normal circumstances, the tax authority’s deadline for notifying an individual of a tax assessment expires:

• Income tax and the special surtax on high incomes (LPF, Art. L.169, para. 1): December 31 of the third year following the year for which the tax is due (e.g., for 2020 income, reported in 2021,administration until December 31, 2023, to issue a tax assessment).

• the real estate wealth tax (IFI):

  • December 31 of the third year following the filing of the declaration regarding the value of the items listed in the declaration (LPF, Art. L.180 LPF)

  • on December 31 of the sixth year following the year for which the IFI is due, for items not included in the return or if no return has been filed (LPF, Art. L.186).

• inheritance tax or gift tax:

  • on December 31 of the third year following the registration of the deed or declaration, when, to put it simply, the property has been properly declared but its value is incorrect (LPF, Art. L.180).

  • on December 31 of the sixth year following the registration of the deed or declaration, for property or assets not listed in the declaration (LPF, Art. L.186).

• withholding taxes (LPF, Art. L.169 A): the third year following the year for which the tax is due

• property tax and housing tax (LPF, Art. L.173): December 31 of the year following the year for which the tax is due (e.g., for the 2023 property tax, paid in 2023,administration until December 31, 2024, to issue a tax assessment).

Under certain circumstances (hidden business activities, undeclared foreign bank accounts, fictitious tax residency, international administrative assistance, etc.), the statute of limitations may be extended, and the time limits mentioned above do not apply.

In the event of a tax audit, it is recommended that you seek assistance, particularly from a tax attorney.

This person will ensure that responses are appropriate and that deadlines are met. In this way, they will ensure that you receive all the protections to which you are entitled during the tax audit.

A lawyer’s experience can also sometimes help determine whatadministration has in mindadministration asks certain questions.

If a tax assessment is unavoidable, your attorney may suggest a process to resolve the issue or determine whether there are any mechanisms that could limit the amount of the assessment.

Our firm specializes in tax audits and litigation, and we can guide you through every step of the tax audit process. Feel free to contact us by email; we’ll do our best to respond promptly.

Civil servants responsible for individual income tax audits are generally divided into two ranks.

There are public finance auditors who handle requests for information and, in general, less critical matters.

Public finance inspectors, who hold a higher rank than auditors, will handle the other procedures.

Depending on the financial stakes involved in the case of the individual being audited, the following departments conduct the audit:

• a Departmental Directorate of Public Finance (DDFiP)

• a specialized tax audit division (DIRCOFI)

• the National Directorate for Personal Tax Audits (DNVSF)

• the Non-Resident Division (DNIR)

• the Tax Investigation Division (DNEF)

There are several reasons that can lead to a tax audit for an individual.

First of all, the tax authorities plan to audit certain taxpayers each year. In recent years, tax audits of individuals with substantial assets have become more frequent.

Furthermore, cross-checking the information available to the tax authorities often reveals inconsistencies in taxpayers’ returns, which can lead to a tax audit.

Finally, in recent years, data mining has become increasingly widespread and has led to more tax audits.

At the stage of a routine tax audit, the individual does not necessarily have any recourse. If the audit goes poorly, the individual may appeal to the auditor’s supervisor.

When a taxpayer receives a reassessment proposal, a period of discussion with the tax authorities begins, during which the taxpayer has several options available. These options are detailed on the page dedicated to the reassessment proposal.

As part of a tax audit of an individual, the tax authorities may request bank statements for a foreign account.

For example, the tax authorities may request access to PayPal, Revolut, N26, or any other accounts held abroad.

He generally files a request for international administrative assistance, which has implications for the statute of limitations on tax claims (LPF, L.188 A).

Upon receipt of a request for information, supporting documentation, or clarification, it is possible to correct any errors made. However, these errors must have been made in good faith. In such cases, you are eligible for a 70% reduction in late payment interest.

It is also possible to resolve one’s tax situation through a personal tax review.

To resolve the issue, you must file a request withadministration within 30 days of receiving the letter requesting the information.

You must then, within thirty days of the request, file an amended return that corrects the errors in the previous return and, if applicable, pay the additional duties and late payment interest after the reduction has been applied.