The Federal Board of Revenue (FBR) will use an automated system for FBR tax return scrutiny of income tax returns filed for tax year 2026, notifying taxpayers about possible errors or discrepancies before any legal action is taken.
How the Automated Scrutiny Works
The new system, called Computerized Risk Management (CRM), will electronically review returns and let taxpayers explain differences, correct mistakes or take other steps. The FBR introduced the mechanism through S.R.O. 2098(I)/2026, which adds Rule 38B to the Income Tax Rules, 2002, covering electronic scrutiny of returns and notification of the issues the system finds.
The system will process returns filed under Section 120(2A) of the Income Tax Ordinance, 2001. It may send online notices through the IRIS portal that point out possible factual or legal errors.
Deadlines for Taxpayers
- Taxpayers get at least seven days to respond to a notice, explain discrepancies or correct their returns.
- If they do not respond in time, the system sends a reminder with another period of at least seven days.
- The relevant Inland Revenue officer can also issue advance notices that identify discrepancies in a return.
Role of the Inland Revenue Officer
All identified issues, notices sent to taxpayers and their responses will be shared with the relevant Inland Revenue officer and recorded on a dedicated dashboard. The officer will review the taxpayer’s response, or the lack of one, and decide whether further action is required under the Income Tax Ordinance, 2001. The FBR will carry out the automated scrutiny, data matching, discrepancy identification and electronic communication through a Change Request Form (CRF).
What Taxpayers Should Do
Taxpayers should check their IRIS portal regularly, keep supporting documents ready, and respond within the notice period, since a missed reply can lead the officer to take further action.
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