Audit Of Restaurants – Revenue Projection Method

A revenue projection method is a technique that may be implemented during the audit of a taxpayer. Briefly, IVI techniques are used in an attempt to determine the income of a taxpayer where the taxpayer's books and records are deemed unreliable. For a more in-depth article on IVI techniques, please click here.

One type of IVI technique is the revenue projection method whereby a method of projecting a business' revenue is formulated, the result of that projection is compared to the business' reported revenue, and, if the projected revenue is greater than what the taxpayer reported, that projection may be used as the basis of a subsequent reassessment.

One industry where we have seen the revenue projection method implemented is in the restaurant and food service industry.