Real audit cases and the trust-based filing baseline

One real case, from a participant with a business audited 3 times: auditors checked supplier contracts, employee time cards (taken away for review), the match between recorded and actual cash balances, and cash receipts. They found underreporting, such as unrecorded expenses for wheels sent to Russia; the fine or additional payment in one case was around 300,000 yen, plus the cost of a tax consultant's 2-day support during the audit. The audit interval ranged from 3 to 6 years; formally it "should be every 3 years," but in practice this is not strict. In a much larger case, an amended return sharply raising a director's compensation-based profit tax led to an additional payment of 85 million yen plus penalty and delinquent charges covering 5 years of history, for a participant with a high HSP score; after settling (amended tax + penalty + delinquent payment), the NTA issued a certificate confirming no outstanding claims for the past 5 years. More broadly, per chat participants, Japan generally takes annual returns "on trust" — there is no default tracking or audit absent grounds for suspicion; the tax office is generally fairly approachable, offering free consultations (in Japanese), and even simple cases can be handled without a 税理士.