Which of the following is NOT typically a risk factor in risk-based planning?

• A. Weather patterns
• B. Tax type
• C. Historical compliance
• D. Materiality of potential non-compliance

Answer: (A)

Risk-based planning in tax administration looks at signals that indicate how likely non-compliance is and how significant it would be if it occurred. The type of tax matters because some taxes have more complex rules or higher error rates, increasing inherent risk. Historical compliance matters because a taxpayer’s past behavior is a useful predictor of future risk. The materiality of potential non-compliance matters because issues with larger amounts or penalties take priority.

Weather patterns don’t influence whether a taxpayer will comply or how severe the consequences would be, so they aren’t used as a risk factor in this planning.