The UK award, decided by a panel of judges, holds a first prize of £15,000 (approx €25,000) and £3,000 (€5,000) as second prize.
The erstwhile Toasted Heretic frontman is one of five nominees for the cheque for his work The Orphan And The Mob.
Coinicidentally timed with Ireland's election, the story is based around an orphan who accidentally urinates on a Fianna Fail minister at an election rally, causing an angry mob to burn down his orphanage.
The nomination has already had an impact - Gough's forthcoming novel Jude: Level 1 has shot up half a million places in Amazon's book chart!
Also acknowledged are David Almond (for 'Slog's Dad'), Jonathan Falla ('The Morena'), Jackie Kay ('How To Get Away With Suicide') and Buddha Of Suburbia author Hanif Kureishi.
Kureishi's controversial work 'Weddings And Beheadings' is about a young Baghdad wedding photographer who is forced to film beheadings.
Though BBC Radio 4 have aired the other entries, Weddings And Beheadings was postponed due to the sensitivity surrounding BBC journalist Alan Johnston's capture from Gaza City.
Kureishi blasts this decision, saying on Radio 4's Today programme: “It seems to me that we show our solidarity with him and with other writers and artists imprisoned around the world without freedom of speech by sponsoring our own freedom of speech.
“It doesn’t seem to me that censorship by dropping my short story from its supposed broadcast time will increase freedom in any way at all, anywhere, and it seems to me to be giving in to terrorism."
You can see a great pic of Julian Gough and (a naked) Hanif Kureishi on Julian Gough's official site.
The winner will be announced on the Today show on Monday April 23, and we'll keep our fingers crossed until then.