Tax Glossary Definition
Examination refers to the systematic review and verification process conducted by tax authorities to evaluate the accuracy, completeness, and compliance of a taxpayer’s returns, financial records, and supporting documentation. The purpose of the examination is to ensure that the taxpayer has correctly reported income, claimed deductions appropriately, and complied with all relevant tax laws and regulations.
Example: During an income tax examination, the authorities may review a company’s books of accounts, invoices, and expense records to confirm the correctness of its reported taxable income.
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