Our tax law firm informs you of the following elements in the event of a control by the tax authorities of the situation of individual or corporate taxpayers.
1. Recovery time
The right of the tax administration to repair omissions, shortcomings or errors made in establishing the tax (“recovery period”) can only be exercised for a period.
This period is generally three years but can be extended in the event of non-declaration of income.
However, there are specific deadlines for local direct taxes, registration fees and solidarity tax on wealth.
For income for the year 2020, the recovery period will normally expire on December 31, 2023.
2. Control of the tax administration
In the event of a tax audit, the administration has the following possibilities:
- An investigative power: control operations, investigations and searches;
- Use of procedures allowing it to obtain information and, if necessary, perform cross-checks: requests for clarifications or justifications, right of communication as well as other measures.
Control operations themselves take various forms.
For example a simple critical examination of the declarations made using the information and documents in the file (documentary control) or a one-off control carried out at the taxpayer's request. Or it can also be an in-depth tax audit involving more important investigations, namely an audit.
When this concerns tax bases determined from an accounting, this operation takes the form of an accounting verification. When it relates to the accuracy of the aggregate income serving as the basis for income tax, it constitutes a contradictory examination of the personal tax situation.
It may be noted that these different forms of control, far from being mutually exclusive, are, on the contrary, often complementary.
Thus, the initiation of an audit is, in many cases, preceded by a documentary tax audit highlighting the need for a more in-depth audit.
In the same way, the administration generally proceeds, on the occasion of the audit of the accounts of a company or a company, to the examination of the tax situation of the operator or the leaders.
3. Competent service
The services of the general public finance directorate responsible for tax audits: are multiple: directorates with national jurisdiction, tax audit directorates with interregional responsibility, departmental directorates, local services. For these services, the distribution of tasks is based on several criteria, in particular the geographical location, the amount of turnover achieved or taxable income, membership of a group of companies or the relationship of interests. with the foreigner and the sector of activity or the socio-professional category.
The competent agents, mandated to carry out the verifications and notify the correction proposals are the agents of category A (tax inspectors) and the agents of category B (controllers).
These agents may be assisted, for control operations, by other agents or by trainee officials.
They can control taxpayers whose place of declaration or taxation is within the territorial jurisdiction of the service to which they are assigned, as well as persons or groups linked to these taxpayers (persons belonging to the same tax household)
4. What to do in the event of a tax audit?
A tax audit procedure against a natural person or a company is a very important event which is unfortunately too often overlooked by taxpayers.
Recourse to your law firm specializing in tax audits from the start of the procedure (1st meeting) is decisive insofar as the latter will be able to ensure your defense in the best conditions and to argue certain elements with the inspector in order to to limit potential rectifications.
In practice, your tax lawyer is unfortunately frequently confronted with situations where certain prospects belatedly send their correction proposals. This situation is more delicate for your tax law firm, given that certain elements which could have been justified during the control phase are difficult to justify subsequently.
Our tax law firm regularly advises its clients to intervene from the start of the procedure in order to guarantee a better defense.