PRE-INSPECTION ANALYSIS AS A TOOL FOR FORECASTING ON-SITE TAX AUDIT RESULTS AT PENAL ENFORCEMENT INSTITUTIONS

Abstract

Today, on-site tax inspection remains the most effective form of tax inspection. It is conducted to determine the correctness of calculation and timeliness of payment of taxes and fees, as well as other mandatory payments to the country’s budget. Since the creation of the tax service, inspections have been conducted at organizations executing different types of activities (production, wholesale and retail trade, construction, services, etc.), so each inspection has its own special features. The pre-inspection analysis is the preparatory stage of the on-site tax audit and it is aimed at improving the efficiency of taxpayers selection process, optimizing methods as well as ensuring the effectiveness of the audit. An analysis of the financial and economic activities of a taxpayer is a kind of tax control that is implemented prior to making a decision to conduct an on-site tax audit. It directly determines the inclusion of the taxpayer in the plan for on-site tax inspections. Despite the fact that tax authorities have been working in this area since 2007 when the concept of planning on-site tax audits has been approved, the pre-audit analysis as a form of audit is not included nor regulated by any legislative act. In this regard, many questions arise in terms of both organization and recognition of its results by the arbitration courts. Many questions also arise from taxpayers trying to assess on their own the risk of on-site tax inspections. Over recent decades, the Russian Penitentiary system has been undergoing a second major reform which affects practically all areas of its activities including taxation of its institutions. Like all taxpayers, institutions within the Federal Penitentiary system are subject to tax control, but at the same time, they are significantly different from other entities in terms of their economic activities. This fact makes it necessary to adjust the results of the pre-inspection analysis in order to improve its effectiveness at these institutions.