Tax Audit Experience

I've been tax audited recently and would like to briefly share my experience, starting with lessons learned.

1. Report the tax correctly. Sorry for stating the obvious.
2. If for some reasons, you under report your tax, just correct it (修正申告), even years later. The penalty is minimum in that case (only around 2.4% for max one year for delinquent tax 延滞税, CMIIW). No other penalties.
3. If you got Tax Audit notification (税務調査通知), and if you under report your tax, try to find all the problems and fix them (修正申告) before the actual audit date. The audit will go smoothly in that case, and the fine will be lower (at least -5% compare to fix them after the audit).

Anyway, in my case, I under reported my RSU and didn't use Average Acquisition Cost (平均取得単価) when sold them. I got a phone call from Tax Office and I follow [3], audit myself, found several mistakes and fix all of them before the actual audit date. The actual audit went amazingly smoothly because the audit based on the reports that I fixed, not the original report. They just ask how everything was calculated and see if they match. Originally they asked for 3 hours, but 1.5 hours were enough. The two officers were very nice, they asked questions in a polite manner. I think partially because I already fixed the mistakes beforehand, everything they asked I just showed them and printed if needed. It seems I will need to pay around 2.4% of 延滞税 and 5-10% of 加算税 (the precise amount will be sent several weeks after the audit).

I felt pretty nervous after getting the phone call, but after I fixed all the mistakes, I felt much better. That's why I think [3] is very important. [1] is obviously the best thing to do and I will try to do it from now on.