A tax audit is divided into three main steps
First stage: Control 
During this first stage, the tax authorities usually check with critical appraisal any declarations and forms they get from the taxpayers.
This first step may be followed by:
- A request for information and justification
- An advice of tax adjustment
- An individual tax audit
- A tax account audit (companies)
If the tax authority decides to make an individual or company tax audit, several meetings will be organised to analyse the taxpayer’s bank accounts, and/or the company balance sheets and to request specific information
The taxpayer may be assisted by an advisor from the start procedure.
If the tax authorities disagree with the taxpayer, they send him an advice of tax adjustment.
Second stage: Reply and dialogue
Once the taxpayer receives his advice of tax adjustments, he has 30 days in which to reply.
It is essential that the taxpayer replies within this 30 days period, otherwise he will be considered to have tacitly accepted the tax adjustments and will loose certain garantees granted by French law. After the 30 days period has expired the taxpayer wishing to contest the tax adjustements will be obliged to bring a law suit.
If the tax audit is made under a contradictory procedure, the tax authority must reply indicating their agreement or disagreement.
If the taxpayer and the tax Inspector disagree, and the tax authority maintains fully or partially the tax adjustments, the taxpayer may request an interview with the “Inspecteur Divisionnaire” or “Inspecteur Principal” who are the tax inspector’s superiors.
If, after those contacts, disagreements are still present, the taxpayer is able to contact the “Interlocuteur départemental”.
During the contradictory procedure, if the disagreement concerns factual issues (to the opposite of a law debate), the taxpayer may claim the intervention of the departemental commission upon direct income and value added tax which shall examine his arguments and give its’ opinion. This commission is headed by a magistrate from the administrative court and includes representatives of the tax authorities and the taxpayers
The decision from the departmental commission of direct taxes and value added tax is notified to the taxpayer before collection of the taxes still in disagreement.
Once the fiscal notice is sent, the third step called litigation stage may start.
Third Stage : The litigation stage
The reception of a fiscal notice means that the tax authority requires immediat payment of outstanding taxes and begins the litigation phase of the procedure.
The litigation stage is split in two parts: I. the prior claim and II. bringing the case to court.
I. The taxpayer is obliged to begin the litigation phase by making a claim to the competent direction of the tax authorities.
This claim may be fully or partially rejected or accepted. After six months without reply, the claim is deemed rejected.
II. In case of express or tacit rejection from the tax authority director, the taxpayer is allowed to bring his case to court.
When the court (first degree of jurisdiction) gives its decision in favour of the tax authority, the taxpayer may take his case to the Court of appeal.
If the court of appeal rejects the taxpayer arguments, he can bring his action to the supreme French high courts (Conseil d’Etat or Cour de Cassation).
In certain cases, recourse to European jurisdiction (CJCE or the European Human Rights Courts) may be introduced.
