Tax Audit Support

If you have received a letter, notice, or phone call from the Japanese tax authority (国税庁 / 税務署), do not respond alone — and do not ignore it.

How you respond in the early stages can significantly affect the outcome. Contact us as soon as possible.

---

Common Reasons for a Tax Audit

Tax audits involving foreign nationals in Japan are often triggered by the following:

Unreported RSU / ESPP / Stock Option income Equity compensation income is frequently missed by both employees and employers. The tax authority cross-references withholding records and brokerage data. Incorrect capital gain calculation Using the capital gain figure directly from an overseas brokerage statement (e.g. E*TRADE, Fidelity, Schwab) without applying the weighted average method adjusted for Japan (総平均法に準ずる方法) is a frequent source of underreporting that can trigger an audit.

Large overseas remittances Significant transfers between overseas and Japanese bank accounts may attract scrutiny, particularly where the source of funds is unclear to the tax authority. Discrepancies in filed returns Inconsistencies between filed returns and third-party data — such as brokerage statements, employer records, or information from overseas tax authorities — can prompt an inquiry.

---

What We Can Do for You

Direct representation We represent you directly before the tax authority. You do not need to attend or communicate with the tax office yourself. Document preparation We review your records, identify any issues, and prepare all documentation required to respond to the tax authority's inquiries.

Negotiation & response We handle all communication, negotiations, and follow-up responses with the tax authority on your behalf — in Japanese. Amended returns Where prior year returns require correction, we prepare and file amended returns (修正申告) to resolve the matter as efficiently as possible.

---

The Earlier You Act, the Better

In Japan, voluntarily filing or correcting a return before the tax authority formally initiates an audit can significantly reduce penalties. Once an audit is formally opened, the options available to you — and the penalties applicable — change considerably.

---

How We Work With You

1 Initial Consultation We review the notice or inquiry you received and assess the situation.

2 Situation Review We review your past filings and relevant records to understand the full picture.

3 Response Strategy We develop a response strategy and explain your options clearly.

4 Tax Authority Response We handle all communication and negotiations with the tax authority on your behalf.

5 Resolution We confirm the matter is resolved and advise on steps to prevent recurrence.

---