Tax Audits

Tax audits are among the most burdensome interventions by the tax authorities — in many cases, substantial back-tax demands, estimated assessments or even criminal consequences are at stake. As an experienced tax law attorney and certified advisor for tax criminal law (DAA), I support entrepreneurs, freelancers and businesses in audit-sensitive sectors — gastronomy, retail, trades — with competence and determination.

What Is a Tax Audit?
 

In a tax audit, the tax office examines whether all tax obligations have been properly fulfilled in the past. The audit is announced by means of a formal audit order, usually two to four weeks in advance. The auditor visits the business premises or the offices of the tax advisor, where the accounts, receipts and tax-relevant documents are reviewed. Where discrepancies are identified, estimated assessments pursuant to Section 162 AO, back-tax demands — or in extreme cases, criminal investigations for tax evasion — may follow.
 

Who Is Affected — and When?
 

In principle, any business can be audited — regardless of sector or size. Businesses particularly in focus include:

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• Cash-intensive operations such as restaurants, bakeries, hairdressers, convenience stores and kebab shops

• Businesses with unclear or inconsistent bookkeeping

• Cases involving conspicuous tax returns or losses over several years

• Taxpayers with tax assessments subject to review pursuant to Section 164 AO

 

Large businesses are audited on a regular cycle; smaller businesses tend to be audited on a specific trigger basis — for example following a tip-off, where turnover underreporting is suspected, or in connection with undeclared work.

How Does a Tax Audit Proceed?
 

• Commencement: The auditor arrives, identifies themselves and states the audit period — typically three years.

• On-site examination: Review of accounts, receipts and cash register systems, potentially including an inspection of the business premises.

• Duty to cooperate: You are required to make documents available and provide the auditor with a workplace.

• Closing meeting: Discussion of findings. A factual settlement pursuant to Section 363 AO may be reached at this stage.

• Audit report: Forms the basis for revised tax assessments, which frequently trigger additional tax liabilities or surcharges.

What Methods Does the Tax Office Use?
 

Tax auditors work with statistical procedures and probability models — even where the taxpayer has operated correctly:

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• Time-series comparison (BFH, judgment of 25 March 2015 — X R 20/13)

• Reverse calculation based on cost of goods and gross profit margins

• Chi-square test and Benford's Law — used to identify allegedly manipulated figures

 

These methods frequently result in estimated assessments that are, in many cases, legally challengeable.

Your Rights — and How I Support You
 

As your attorney, I am at your side from the moment the audit is announced:

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• I review the lawfulness of the audit order

• I protect your interests in dealings with the auditor and safeguard your limits of cooperation

• I analyse the findings at the closing meeting

• I represent you in objection proceedings and before the tax court where necessary

 

The earlier I am brought in, the greater the scope for strategic intervention and legally sound positioning.

Preparation Is Key
 

• Make effective use of the time between the audit order and the commencement of the audit:

• Organise your bookkeeping

• Clarify open questions with your tax advisor

• Establish clearly who will act as the point of contact with the auditor — for example your tax advisor or head of accounts, not other members of staff

• Contact me at an early stage — we will determine together whether and how communication with the auditor should be conducted

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Frequently Asked Questions
 

What should I do when I receive an audit order?
Secure your documents immediately and do not communicate with the tax office without legal advice.

Can an audit result in additional tax payments?
Yes — particularly where estimated assessments are made pursuant to Section 162 AO.

Should I file an objection against the audit order?
Only in justified exceptional circumstances — in most cases, a cooperative but legally protected approach is preferable. If you receive correspondence from the tax office or a tax audit is imminent, call me before the auditor arrives. This is how you secure well-founded protection — not only against the tax office, but also against unnecessary financial and criminal law risks.