Expert defence and negotiation for individuals and businesses under investigation for historical tax underpayments by the FIRS or State Revenue Services.
Overview
What Is a Back Duty Investigation?
A back duty investigation is one of the most serious and stressful encounters a taxpayer can face. Unlike a routine tax audit, a back duty investigation targets past years — typically up to six years under the Companies Income Tax Act and related statutes — where the Federal Inland Revenue Service (FIRS) or a State Internal Revenue Service (SIRS) — including the Lagos Internal Revenue Service (LIRS) — suspects that tax has been significantly underpaid, underdeclared, or evaded.
Investigations of this nature are conducted by specialist officers who are trained to scrutinise bank statements, contracts, management accounts, and third-party data to reconstruct a taxpayer's true income and liabilities. The assessments raised can be substantial — often running into millions of naira — and are accompanied by interest and penalty charges that can double or triple the underlying tax.
Phillip Eze Osuji & Co. has successfully represented clients through some of the most complex back duty investigations conducted by both federal and state revenue authorities in Nigeria. We bring a calm, methodical, and evidence-led approach to every case.
Know the Risk
What Triggers a Back Duty Investigation?
Understanding what draws the attention of revenue investigators is the first step in protecting your business.
Significant Discrepancies in Returns
Large gaps between turnover declared for VAT and income declared for CIT, or unexplained year-on-year variations in taxable profit, commonly flag a business for investigation.
Third-Party Intelligence
FIRS and SIRS routinely receive data from banks, other government agencies, and confidential tipoffs. Deposits or transactions that cannot be reconciled to declared income attract immediate scrutiny.
Lifestyle & Asset Indicators
Where the visible wealth, property, or lifestyle of a business owner appears inconsistent with the income declared to the tax authority, investigators may open a back duty case against both the individual and their associated entities.
Late or Non-Filing of Returns
A persistent record of late filing, non-filing, or estimated returns without subsequent self-amendment is a strong signal to investigators that the taxpayer's affairs merit closer examination.
Mergers, Acquisitions & Due Diligence
A change in ownership or control often prompts the revenue authority to conduct a retrospective review of the acquired entity's tax affairs, sometimes opening back duty investigations as part of the acquisition clearance process.
Industry-Wide Campaigns
FIRS periodically targets entire sectors — construction, real estate, professional services, importers — with coordinated back duty investigation campaigns. Businesses within the sector may be investigated regardless of their individual compliance record.
Our Services
How We Handle Your Investigation
Our engagement begins the moment you receive an investigation notice — or, ideally, before one arrives. We act as your sole point of contact with the revenue authority, shielding you from direct confrontation with investigators while marshalling the strongest possible response on your behalf.
Our service covers the full lifecycle of a back duty investigation: initial notice review and strategy, voluntary disclosure where advantageous, document production management, interview preparation, formal response drafting, assessment challenge, and negotiated settlement. Where the authority raises a formal assessment, we evaluate it forensically and challenge every element that cannot be supported by evidence.
We also provide a voluntary disclosure service for clients who are aware of historical underpayments and wish to regularise their position proactively — before an investigation is opened — in order to minimise penalties and avoid criminal referral.
- ✓ Immediate review of the investigation notice and scope assessment
- ✓ Voluntary disclosure strategy and proactive regularisation
- ✓ Full representation before FIRS and all State Revenue Services
- ✓ Document review, production management, and privilege protection
- ✓ Forensic reconstruction of income and liabilities where records are incomplete
- ✓ Formal objections to assessments and appeals to the Tax Appeal Tribunal
- ✓ Negotiation of penalties, interest, and payment arrangements
- ✓ Post-settlement compliance strengthening to prevent future exposure
Our Process
How a Back Duty Investigation Unfolds
- 01
Notice Receipt & Immediate Triage
The moment you receive an investigation notice, contact us. We immediately review the notice, identify the period and tax heads under scrutiny, assess the likely risk exposure, and advise on whether to engage proactively or await the opening of formal proceedings.
- 02
Records Review & Position Paper
We conduct an independent internal review of your books, bank statements, contracts, and tax returns for all periods under investigation. Where discrepancies exist, we document them, quantify the exposure, and prepare a position paper setting out our response strategy.
- 03
Engagement with Investigators
We liaise directly with the FIRS or SIRS investigation officers on all matters. We manage information requests, respond to queries in writing, and attend all meetings as your authorised representative, controlling the narrative and ensuring that the authority's examination remains within its lawful scope.
- 04
Assessment Challenge & Negotiation
Where the authority raises a back duty assessment, we analyse it line by line, identify untenable items, and lodge a formal objection with supporting evidence. We then negotiate the agreed liability, including the quantum of penalties and interest, seeking the best achievable outcome for your business.
- 05
Settlement, Clearance & Remediation
Once a settlement is reached, we manage the payment process, obtain your clearance documentation, and advise on the internal controls, record-keeping practices, and compliance measures needed to prevent the recurrence of any investigation in future years.
Why Choose Us
Calm, Evidence-Led Defence in Every Case
Back duty investigations are high-stakes engagements where the difference between a well-prepared response and a poor one can mean millions of naira in additional assessments. Our team brings a disciplined, evidence-led approach — we do not negotiate from weakness; we build a documented, legally grounded case that puts the onus of proof back on the revenue authority.
We have successfully challenged assessments raised by specialist investigation units across both the FIRS and multiple State Revenue Services, achieving significant reductions — and in some cases full withdrawal — of assessments that our clients initially believed were incontestable.
- ✓ Experienced in FIRS Integrated Tax Administration System (ITAS) investigation procedures
- ✓ Practitioners registered with ICAN and CITN — authorised tax representatives
- ✓ Proven track record of assessment reductions and investigation closures
- ✓ Proactive voluntary disclosure service to regularise before investigation commences
- ✓ Absolute confidentiality — all matters handled discreetly and professionally
- ✓ Rapid mobilisation — we respond to investigation notices within 24 hours
