Is it true that a tax audit ends if you simply refuse it?

“A tax audit goes away if you refuse it.” Have you heard this in casual conversation or on social media?

This rumor is only half right. If you refuse without knowing the auditor’s powers and the penalties that exist, you may get into trouble later. We checked this rumor against the original text of the Act on General Rules for National Taxes and the official information of the National Tax Agency (NTA).

Four tax terms to know first

Here are plain-language explanations of the terms used in this article.

• Right to question and inspect (shitsumon kensa-ken) = The legal authority of a tax auditor to ask questions and examine account books and documents.
• Advance notice (jizen tsūchi) = A notification from the tax office of the date, time, and purpose of an audit before it starts.
• Tax representative (zeimu dairinin) = A licensed tax accountant or similar professional who acts as the contact point for the audit.
• Justifiable reason (seitō na riyū) = A reasonable circumstance that is accepted as grounds for refusing.

Conclusion

Our verdict: “Half true.” It is correct in the sense that the system does not let the auditor push through on the spot. But if you read “it goes away if you refuse” as “a right to refuse the audit,” it becomes wrong.

Auditors have legal authority

First, let’s confirm the foundation on which the auditor stands. Article 74-2 of the Act on General Rules for National Taxes gives auditors the authority called the right to question and inspect. Here is the original text.

国税庁、国税局若しくは税務署（…）又は税関の当該職員（…）は、所得税、法人税、地方法人税又は消費税に関する調査について必要があるときは、次の各号に掲げる調査の区分に応じ、当該各号に定める者に質問し、その者の事業に関する帳簿書類その他の物件（…）を検査し、又は当該物件（…）の提示若しくは提出を求めることができる。［1］

Reference translation (unofficial): An official of the National Tax Agency, a Regional Taxation Bureau, or a tax office (…), or of Customs (…), may, when necessary for an audit concerning income tax, corporation tax, local corporation tax, or consumption tax, depending on the category of audit listed in the following items, question the person prescribed in each item, inspect account books, documents, and other items (…) relating to that person’s business, or request the presentation or submission of those items (…).

(Act on General Rules for National Taxes, Article 74-2, paragraph 1, introductory part, excerpt. For the full text of the article, see source ［1］)

Since this is a rather formal passage, here is what it means. When it is necessary in an audit of income tax, corporation tax, and the like, the auditor can question the persons concerned and inspect their account books and documents. The auditor can also ask them to present or submit those items.

Note the wording “can” (koto ga dekiru). This is legal authority given to the auditor. It is not something you can remove with clever talk on the spot.

There is one more important sentence.

第七十四条の二から第七十四条の七まで（当該職員の質問検査権等）又は前条の規定による当該職員又は国税局長の権限は、犯罪捜査のために認められたものと解してはならない。［2］

Reference translation (unofficial): The authority of the official or the Director-General of the Regional Taxation Bureau under Articles 74-2 to 74-7 (right to question and inspect, etc. of the official) or the preceding Article must not be construed as having been granted for the purpose of criminal investigation.

(Act on General Rules for National Taxes, Article 74-8, full text)

The audit authority is not granted for criminal investigation. The law states this clearly. An audit is a different procedure from a criminal investigation.

However, please keep in mind that there is another, separate procedure. It is the tax crime investigation (sasatsu / hansoku chōsa). This procedure investigates suspected malicious tax evasion (a tax offense case), and it is stated that inspection (rinken), search, or seizure can be carried out under a warrant issued in advance by a judge.［8］［9］ Both “refusing and having the auditor leave” and “asking to discuss the schedule” are about the audits we have seen so far. A tax crime investigation falls outside that framework.

An on-site audit, as a rule, begins with advance notice

So how does an on-site audit begin? Article 74-9 of the Act on General Rules for National Taxes sets the rule that, as a general principle, when an on-site audit is carried out, the date, time, and place of the start of the audit, its purpose, the tax types and periods covered, and the account books and documents are notified in advance.［3］

However, what you can discuss here is the schedule. It is not whether the audit itself is justified. This distinction is the core of this rumor.

If you ask to change the date, time, or place and give a reasonable reason, the authorities are required to make an effort to discuss it.

税務署長等は、前項の規定による通知を受けた納税義務者から合理的な理由を付して同項第一号又は第二号に掲げる事項について変更するよう求めがあつた場合には、当該事項について協議するよう努めるものとする。［3］

Reference translation (unofficial): When a taxpayer who has received the notice under the preceding paragraph asks, giving a reasonable reason, for a change to the matters listed in item 1 or item 2 of that paragraph, the head of the tax office, etc. shall endeavor to discuss those matters.

(Act on General Rules for National Taxes, Article 74-9, paragraph 2, full text)

For the worry that “they just showed up suddenly,” the law has already prepared a measure. At the same time, please keep in mind that discussing a change is only an “effort” on the part of the authorities, and the taxpayer does not have a strong right.

Pitfall 1: Refusing without a justifiable reason can be subject to penalties

So what happens to a person who refuses the audit itself? Article 128 of the Act on General Rules for National Taxes sets out penalties.

次の各号のいずれかに該当する者は、一年以下の拘禁刑又は五十万円以下の罰金に処する。［4］

Reference translation (unofficial): A person who falls under any of the following items shall be punished by imprisonment of up to one year or a fine of up to ¥500,000.

(Act on General Rules for National Taxes, Article 128, introductory part)

One of the covered acts is as follows.

第七十四条の二から第七十四条の六まで又は第七十四条の七の二（特定事業者等への報告の求め）の規定による物件の提示若しくは提出又は報告の要求に対し、正当な理由がなくこれに応じず、又は偽りの記載若しくは記録をした帳簿書類その他の物件（その写しを含む。）を提示し、若しくは提出し、若しくは偽りの報告をした者［4］

Reference translation (unofficial): A person who, without a justifiable reason, fails to comply with a request to present or submit items, or to report, under the provisions of Articles 74-2 to 74-6 or Article 74-7-2 (request for reports to specified business operators, etc.), or who presents or submits account books, documents, or other items (including copies thereof) containing false entries or records, or who makes a false report.

(Act on General Rules for National Taxes, Article 128, item 3, full text)

Put simply: not responding to a request, under the provisions of the law, to present or submit account books and documents. Without a justifiable reason, this can be subject to penalties. There is also a provision that makes failing to answer questions or refusing an inspection subject to penalties (item 2 of the same article). Note that the text of item 2 does not contain the words “justifiable reason.”

In other words, refusing without a justifiable reason is an act that can be subject to penalties. Up to here, this is the world of the law.

On the other hand, the tax office has a basic stance set out for itself. It is the NTA’s administrative operation guideline (published document) “Basic approach to the conduct of audit procedures.”

調査がその公益的必要性と納税者の私的利益との衡量において社会通念上相当と認められる範囲内で、納税者の理解と協力を得て行うものであることを十分認識した上で、法令に定められた調査手続を遵守し、適正かつ公平な課税の実現を図るよう努める。［5］

Reference translation (unofficial): Fully recognizing that an audit is to be conducted with the understanding and cooperation of the taxpayer, within a range that is regarded as reasonable under common sense in balancing its public-interest necessity against the taxpayer’s private interests, we shall comply with the audit procedures set out in laws and regulations and strive to achieve proper and fair taxation.

(Excerpt)

The NTA’s official explanation confirms the same position.

帳簿書類等の提示・提出をお願いしたことに対し、正当な理由がないのに提示・提出を拒んだり、虚偽の記載をした帳簿書類等を提示・提出した場合には、罰則（1年以下の拘禁刑又は50万円以下の罰金）が科されることがありますが、税務当局としては、罰則があることをもって強権的に権限を行使することは考えておらず、帳簿書類等の提示・提出をお願いする際には、提示・提出が必要とされる趣旨を説明し、納税者の方の理解と協力の下、その承諾を得て行うこととしています。［6］

Reference translation (unofficial): If, when we ask for the presentation or submission of account books and documents, etc., a person refuses to present or submit them without a justifiable reason, or presents or submits account books and documents, etc. containing false entries, penalties (imprisonment of up to 1 year or a fine of up to ¥500,000) may be imposed. However, the tax authorities do not intend to exercise this authority forcefully on the strength of the existence of penalties. When we ask for the presentation or submission of account books and documents, etc., we explain why the presentation or submission is needed, and proceed with the understanding and cooperation of the taxpayer and with their consent.

Since this is a rather formal passage, here is what it means. Refusing can be subject to penalties, but the authorities do not intend to investigate by force. Their stance is to explain the purpose and proceed with the taxpayer’s consent.

So far, this is close to the correct part of the rumor. So what kinds of circumstances can be a “justifiable reason”?

どのような場合が正当な理由に該当するかについては、個々の事案に即して具体的に判断する必要がありますし、最終的には裁判所が判断することとなりますから、確定的なことはお答えできませんが、例えば、提示・提出を求めた帳簿書類等が、災害等により滅失・毀損するなどして、直ちに提示・提出することが物理的に困難であるような場合などがこれに該当するものと考えられます。［6］

Reference translation (unofficial): What kinds of cases fall under a justifiable reason must be judged specifically according to each case, and the court will ultimately decide, so we cannot give a definitive answer. However, for example, a case in which the account books and documents, etc. requested for presentation or submission have been lost or damaged in a disaster or the like, making it physically difficult to present or submit them immediately, is considered to fall under this.

This is an example of a circumstance where account books and documents were lost or damaged in a disaster. It is explained that a circumstance beyond one’s control can be a justifiable reason. On the other hand, this article’s view is that a circumstance such as “I’m busy, so please leave” is unlikely to count as a justifiable reason. Whether something is a justifiable reason is judged case by case, and it is said that the court finally decides.

There is one more point to keep in mind. When the tax office makes a reassessment or determination (kōsei / kettei), if the amount of income cannot be calculated from the account books, it is stated that the tax office can estimate the amount of income from the scale of the business, such as the state of revenue and expenses, increases and decreases in assets or debts, production and sales volumes, and the number of employees (this is for income tax; real estate income, business income, and timber income for years in which a blue return was filed are excluded).［10］ This means that after “they left,” the law still leaves a path to being taxed on figures not based on your account books.

Pitfall 2: Audits do not come only to “people with problems”

What about the thinking that “I haven’t done anything wrong, so it’s fine to refuse”? First, here is how the NTA explains what an audit is.

調査は、特定の納税者の方の課税標準等又は税額等を認定する目的で、質問検査等を行い、申告内容を確認するものですが、税務当局では、税務調査のほかに、行政指導の一環として、例えば、提出された申告書に計算誤り、転記誤り、記載漏れ及び法令の適用誤り等の誤りがあるのではないかと思われる場合に、納税者の方に対して自発的な見直しを要請した上で、必要に応じて修正申告書の自発的な提出を要請する場合があります。［6］

Reference translation (unofficial): An audit is conducted for the purpose of determining the taxable base, etc. or tax amount, etc. of a specific taxpayer, by questioning and inspecting and confirming the contents of the return. In addition to tax audits, as part of administrative guidance, the tax authorities may, for example, when they think there may be errors in a submitted return such as calculation errors, transcription errors, omissions, or errors in applying laws and regulations, ask the taxpayer to review it voluntarily and, where necessary, ask them to voluntarily submit an amended return.

An audit is a procedure to confirm the contents of a return. At the time an audit comes, the result has not been decided yet.

Note that the “administrative guidance” mentioned in the quotation is separate from an audit. An audit is carried out with the legal authority called the right to question and inspect, backed by the fact that failing to comply without a justifiable reason can be subject to penalties. Administrative guidance encourages the taxpayer to review errors in the return on their own, and it is not a system enforced by penalties. “Guidance” and “audit” sound similar, but they are different in substance.

Also, the reason a taxpayer is selected for an audit is not explained.

法令上、調査の目的（例えば、提出された申告書の記載内容を確認するため）については事前通知すべきこととされていますが、実地の調査を行う理由については、法令上事前通知すべき事項とはされていませんので、これを説明することはありません。［6］

Reference translation (unofficial): Under the laws and regulations, the purpose of an audit (for example, to confirm the contents of a submitted return) must be notified in advance, but the reason for conducting an on-site audit is not a matter that must be notified in advance under the laws and regulations, so we do not explain it.

An ordinary audit begins with advance notice.

実地の調査を行う場合には、原則として、調査の対象となる納税者の方に対して、調査開始前に相当の時間的余裕を置いて、電話等により、実地の調査を行う旨、調査を開始する日時・場所や調査の対象となる税目・課税期間、調査の目的などを通知します。［6］

Reference translation (unofficial): When conducting an on-site audit, as a rule, we notify the taxpayer to be audited by telephone or the like, with reasonable time before the audit begins, that an on-site audit will be conducted, along with the date, time, and place of the start of the audit, the tax types and taxable periods covered, the purpose of the audit, and so on.

However, the law also allows an exception where an on-site audit is carried out without advance notice. Where there is a risk of making illegal or improper acts easier and making it difficult to grasp the correct taxable base and tax amount, an audit can be carried out without advance notice.［7］ The FAQ also explains that, depending on the contents of the return, past audit results, the nature of the business, and so on, “there are cases where no advance notice is given.”［6］ In addition, there is a procedure called collateral investigation (hanmen chōsa).

税務当局では、取引先など納税者の方以外の方に対する調査を実施しなければ、納税者の方の申告内容に関する正確な事実の把握が困難と認められる場合には、その取引先等に対し、いわゆる反面調査を実施することがあります。［6］

Reference translation (unofficial): Where the tax authorities recognize that it is difficult to grasp accurate facts about the contents of a taxpayer’s return unless they audit persons other than the taxpayer, such as business partners, they may carry out what is called a collateral investigation (hanmen chōsa) of those business partners, etc.

Even if you personally have no issue, a collateral investigation can be carried out on your business partners. Even if you have done nothing, it can lead to a check of the contents of your return through your business partners. Audits do not come only to “people with problems.” That being so, the reasoning that “I am innocent, so I can refuse and make them leave” does not fit how audits work. An audit is not a place to prove your innocence. It is a matter of procedures set by law.

What to do

Here is a table summarizing how to handle an audit when it comes.

Changing the schedule is officially guided in this way.

また、事前通知後においても、通知した日時について、例えば、一時的な入院、親族の葬儀、業務上やむを得ない事情が生じた場合等には、申し出ていただければ変更を協議します。［6］

Reference translation (unofficial): Also, even after advance notice has been given, if, for example, a temporary hospitalization, the funeral of a relative, or an unavoidable business circumstance arises regarding the notified date and time, please tell us and we will discuss a change.

Not refusing but adjusting is the form that the law and the official explanation provide. If you use a tax accountant, advance notice can also be sent to the tax accountant alone.

平成26年7月1日以後に行う事前通知については、納税者の方の事前の同意がある場合には、税務代理権限証書を提出している税理士等（以下「税務代理人」といいます。）に行えば足りることとされました。［6］

Reference translation (unofficial): For advance notices given on or after July 1, 2014 (Heisei 26), where the taxpayer has given prior consent, it has become sufficient to give the notice to the tax accountant, etc. who has submitted a tax representation authorization form (hereinafter “tax representative”).

If you do not accept the explanation of the audit result, there are also relief procedures. On how to respond to a recommendation to file an amended return, the NTA explains as follows.

修正申告の勧奨に応じるかどうかは、あくまでも納税者の方の任意の判断であり、修正申告の勧奨に応じていただけない場合には、調査結果に基づき更正等の処分を行うこととなりますが、修正申告の勧奨に応じなかったからといって、修正申告に応じた場合と比較して不利な取扱いを受けることは基本的にはありません。［6］

Reference translation (unofficial): Whether to accept a recommendation to file an amended return is entirely the taxpayer’s voluntary decision. If the taxpayer does not accept the recommendation, we will take a measure such as reassessment based on the audit result. However, even if you did not accept the recommendation, you will basically not be treated less favorably than if you had filed an amended return.

However, if you choose to file an amended return, the means of relief afterward are limited.

なお、修正申告を行った場合には、更正の請求をすることはできますが、不服申立てをすることはできませんので、こうした点をご理解いただいた上で修正申告を行ってください。［6］

Reference translation (unofficial): Note that if you file an amended return, you can make a request for correction, but you cannot file an appeal. Please file an amended return with this understanding.

In other words, if you accept an amended return, you can use the means of a “request for correction,” but you cannot file an appeal such as a “request for reinvestigation” or a “request for review.” If you do not file an amended return, a reassessment disposition is made, and the path to a request for reinvestigation or a request for review against that disposition opens.［12］ Which path to take is the taxpayer’s voluntary decision.

Also, the audit itself cannot be appealed.

また、調査を行うこと自体は不服申立てを行うことのできる処分には当たりませんから、仮に事前通知事項以外の事項を調査することの必要性についてご納得いただけない場合でも、不服申立てを行うことはできません。［6］

Reference translation (unofficial): Also, conducting an audit itself is not a disposition against which an appeal can be filed. Therefore, even if you are not satisfied with the necessity of auditing matters other than those in the advance notice, you cannot file an appeal.

Parts you do not accept are not something to dispute on the spot during the audit. The normal route is to dispute them in the procedures after the audit.

Summary

“A tax audit goes away if you refuse it” is only half true. An audit is not a compulsory investigation. It is a system carried out with the taxpayer’s understanding and cooperation. If you ask for a change and give a reasonable reason, the authorities are required to make an effort to discuss it. Up to here, it is correct.

However, refusing without a justifiable reason can be subject to penalties. Audits do not come only to “people with problems.” They can come to check the contents of a return, whether or not there is a problem.

The rumor does not mention what happens after you refuse, so it is dangerous to believe it as it is. What you can do before refusing is to adjust the schedule and consult a tax accountant. Both are the proper routes that the law and the official explanation provide.

Sources

• ［1］Act on General Rules for National Taxes, Article 74-2 (e-Gov Law Search, Japanese)　Checked: 2026-10-05
• ［2］Act on General Rules for National Taxes, Article 74-8 (e-Gov Law Search, Japanese)　Checked: 2026-10-05
• ［3］Act on General Rules for National Taxes, Article 74-9 (e-Gov Law Search, Japanese)　Checked: 2026-10-05
• ［4］Act on General Rules for National Taxes, Article 128 (e-Gov Law Search, Japanese)　Checked: 2026-10-05
• ［5］NTA, “Basic approach to the conduct of audit procedures (administrative operation guideline)” (Japanese)　Checked: 2026-10-05
• ［6］NTA, “FAQ on tax audit procedures (for general taxpayers)” (Japanese)　Checked: 2026-10-06
• ［7］Act on General Rules for National Taxes, Article 74-10 (e-Gov Law Search, Japanese)　Checked: 2026-10-06
• ［8］Act on General Rules for National Taxes, Article 131 (e-Gov Law Search, Japanese)　Checked: 2026-10-06
• ［9］Act on General Rules for National Taxes, Article 132 (e-Gov Law Search, Japanese)　Checked: 2026-10-06
• ［10］Income Tax Act, Article 156 (e-Gov Law Search, Japanese)　Checked: 2026-10-06
• ［12］Act on General Rules for National Taxes, Article 75 (e-Gov Law Search, Japanese)　Checked: 2026-10-07

Note: This article is based on laws and official information as of October 7, 2026. It is a translation of the Japanese original; if the two differ, the Japanese version prevails. Quotations from laws and official sources are given in the original Japanese, followed by unofficial reference translations. Sources are limited to laws (e-Gov) and official NTA pages, all in Japanese. If a correction is needed after publication, a correction record will be added at the end of this article (Correction policy).