Abstract

Although the understanding of the state has changed from past to present, states provide their citizens a better quality of life by undertaking different functions in addition to their basic functions such as providing justice or internal and external security. In order for the states to fulfill the responsibilities they have undertaken, the necessity of finding more financing sources has emerged and the need for continuous income sources has begun. In this context, we can say that the most important source of financing for states is tax revenues. The fact that tax revenues are in such an important position among the financial resources of the states brings up the issue of collecting these revenues in a healthy way. This necessitates having an effective audit institution. During tax audits, it is investigated whether the obligations of both the administration and taxpayers arising from taxation are fulfilled in accordance with the laws. The effective and efficient performance of these audits also reveals the relationship between the tax revenues that the states plan to obtain and the tax revenues they collect. Due to the reasons arising from the structure of tax audit, there are large differences between the tax revenues planned to be obtained and the tax revenues collected. This can be accepted as an indicator of the problems experienced in the field of tax auditing.

There are many factors affecting tax audit in Turkey. Considering the results, one of the most important of these factors is the existence of the institution of compromise. The institution of compromise can be defined as the settlement of the problem at the administrative stage, by agreeing of taxpayers or criminals responsible for tax penalties due to insufficient understanding of tax legislation or ignorance with the administration.

In this study, it will be tried to evaluate the compromise institution with all its aspects, starting from the factors affecting the tax audit. In this sense, the institution of compromise decreases the efficiency of tax penalties and the trust of taxpayers or criminals to audit and audit staff. In addition, the institution of compromise causes some of the planned taxes to be renounced and a large part of the penalties to be waived. This situation shows that the compromise institution affects negatively the tax audit.