Tax disputes: subscription services, contractual relationships and litigation

Pre-trial settlement of tax disputes is a procedure, the application of which ensures the prompt resolution of conflicts, without bringing the matter to trial in the first instance. This order has several advantages.

general characteristics

The rules for pre-trial settlement of tax disputes are provided for in Sec. 19 and 20 of the Tax Code. The legislation provides the right to each entity to appeal against acts of control bodies of a non-normative nature, inaction / actions of employees, if they violate the rights of individuals. Pre-trial tax disputes are the responsibility of the higher services of the Federal Tax Service. The appeal procedure provided for in the Tax Code is considered simpler and less formalized. It assumes a shorter time frame, excludes expenses associated with the payment of state duties, and other costs.

Tax disputes

They can occur for various reasons. The most common grounds for claims are:

1. Violation of the timing of the calculation of property tax.
2. Illegal issuance of requirements for the implementation of mandatory budgetary deductions.
3. Refusal of deductions.
4. Suspension of operations on bank accounts.
5. Refusal of tax refund.

Acts of control bodies

The decision of the Federal Tax Service on bringing to responsibility for an offense or on refusal to do so is issued in the following cases:

1. When conducting a field or desk audit of the payer or group of obligated entities. A decision taken based on its results shall enter into force one month after the date of approval. In this regard, you can file a complaint on this act no later than 1 month. from the day of adoption.
2. If facts are identified that indicate violations for which liability is provided for in the Tax Code. A resolution adopted in such cases by the regulatory authorities shall enter into force upon delivery to the subject in respect of which it is issued.

Appeal Features

The NK does not provide for the possibility to restore the period for filing a claim that was missed for any reason by the subject for which the decision was made to hold him liable for an offense or refuse to do so. A complaint about a decision that has entered into force that has not been challenged in the appeal procedure may be sent within a year from the date on which the person should have known or learned about the violation of his right. Similar rules apply to other acts, inaction / actions of employees of the Federal Tax Service. A decision on a complaint (including an appeal) made by a higher authority or another ruling of a non-normative nature, in turn, may be appealed to the Federal Tax Service. The deadline for filing a claim is 3 months. from the date of adoption of the decision. If this period is missed for a good reason, at the request of the subject, it can be restored by a higher authority.

Mandatory procedure

It was established on January 1, 2014. This procedure applies to all tax disputes. These include appeals of acts of a non-normative nature, inaction / actions of employees of control bodies. In accordance with the established procedure, tax disputes are settled in court only after decisions made by officials are appealed to a higher division of the Federal Tax Service.The same applies to claims regarding inaction / actions of control officers.

Important point

For payers whose rights they believe are violated, in order to comply with the established mandatory procedure, it is sufficient to send an appeal to the decision that has not entered into force, taken as a result of on-site or desk inspections, another document of a non-normative nature, inaction / actions of employees of the Federal Tax Service . Acts made on these applications, in turn, may be challenged in court or in a higher division of the tax service. The latter, in turn, may also be appealed. In this case, claims are sent to the court. A complaint (including an appeal) is submitted to a higher division of the Federal Tax Service through the service, decisions of a non-normative nature, the inaction or actions of employees of which are appealed.

Entry into force

As stated above, an appeal is sent before the impugned act acquires force. In this regard, a decision with which the subject disagrees takes effect in the part not canceled by the higher unit and in the unappealed part from the date of its adoption. A claim by a person whose rights have been violated may presuppose the complete reversal of the appealed act. In this case, as well as upon adoption of a new resolution by a higher authority, it will enter into force on the date of its adoption. A body authorized to consider tax disputes may leave a statement of a subject without proceeding. In this case, the act of the subordinate unit will enter into force from the date of adoption of the relevant resolution, but not earlier than the end of the period for filing an appeal. Forwarding a claim to a higher authority for a valid act does not suspend its execution.

No debit

One of the ways to ensure the protection of the rights of payers is the ability to suspend an act that is being appealed. It is fixed in Art. 199, paragraph 3 of the agro-industrial complex. A direct consequence of the realization of this possibility is the prohibition of debiting funds from the settlement account of a company, arrears, penalties and, in some cases, a fine before a court decides on the merits. The suspension of the appealed act is made at the request of the payer as part of interim measures. This means, in turn, that the subject has the burden of proving the grounds for their application under Art. 90 agribusiness. These, in particular, are the impossibility of the act or the existence of substantial damage to the applicant.

The timing

In accordance with the agro-industrial complex, tax disputes are resolved within three months from the date of receipt of the case. In case of particular difficulty of the conflict, the term is extended to six months. Nevertheless, the resolution of tax disputes in many cases is delayed for longer periods. At the indicated times, the instances only have time to prepare for the hearing.

Burden of proof

Tax disputes in the arbitration court relating to appeal of decisions of the IFTS, inaction / actions of service employees have a number of specific features. In particular, features are manifested in the issue of the distribution of the burden of proof. In tax law there is a declared YOU presumption of innocence and good faith payer behavior. When determining the appeal procedure, the AIC establishes rules for proving the circumstances that became the basis for the adoption of the act, the commission of inaction / action, in respect of which the subject makes claims.

The practice of tax disputes shows that persons whose rights, in their opinion, are violated, interpret the norms and principles provided for in the legislation in different ways. So, some entities do not consider it necessary to confirm the existence of a contradiction between the act adopted by the control body, the action / inaction of employees and the law.They believe that all these facts should be proved by the inspection. The Federal Tax Service, in turn, is shifting this burden to payers.

In this regard, tax dispute resolution is often carried out in favor of regulatory authorities. In examining cases, the authorities actually place on payers the burden of proving circumstances that in some cases do not even depend on them. Subjects have to confirm their innocence or good faith by submitting documents from counterparties in response to inspection allegations to the contrary. Such a position of the judiciary actually makes the appeal procedure, enshrined in the AIC and the Tax Code, dependent on additional circumstances. However, these conditions payers have to take for granted.

In connection with this provision, arbitration tax disputes suggest the most active position of entities whose rights are violated. During the process, experts recommend that payers not particularly rely on principles and presumptions. It is desirable and advisable to independently take possible and subject-dependent measures to ensure the maximum amount of evidence. As a rule, the active position of the payer, his desire to make contact in the matter of collecting the necessary evidence, making settlements leads to the fact that tax litigations deal with an acceptable result for him.

System improvement

The development of various mechanisms, through which tax disputes can be efficiently and within a reasonable time, is the strategic goal of the financial policy of state bodies. The main role in this matter belongs directly to the Federal Tax Service. Achieving this goal will mean the implementation of qualitatively new approaches to the conflict resolution system. They must provide:

1. Monitoring the legality and validity of acts issued by lower divisions of the Federal Tax Service.
2. Achieving objectivity and high efficiency of the proceedings.
3. Formation of information and analytical databases of decisions adopted based on the results of consideration of applications of payers, analysis of litigation practice.
4. Improving conciliation procedures.
5. Reducing the number of potential reasons why tax disputes may arise.
6. Improving the system of informing payers about the opportunities provided and the current mandatory appeal procedures.
7. Strengthening the motivation of subjects to out-of-court dispute resolution.

Key areas

The development of the pre-trial settlement system involves:

1. Reducing the number of complaints received by the Federal Tax Service on their decisions based on the results of inspections or due to inaction or actions of employees of control services.
2. Reducing the burden on the courts.
3. The development of differentiated mechanisms of proceedings. For example, they include the opportunity to conclude a settlement agreement, use a simplified and universal nature, etc.
4. Improving Internet services that facilitate the flow of complaints, tracking the stages of their consideration.
5. Continuous informing payers of the opportunities provided by law through a feedback mechanism.
6. Clarification to the subjects of the benefits of pre-trial order over traditional methods of dispute resolution.
7. Prompt and adequate response to committed departmental violations to improve the quality of administration.
8. Development of a competent tax advice system.
9. Continuous monitoring and analysis of problems in the organization of work of territorial divisions of the Federal Tax Service.

findings

In modern conditions, payers are quite actively interacting with tax authorities. These relationships manifest in various forms. One of them is the pre-trial settlement of various disputes.The latter arise, as a rule, as a result of disagreement of the payers with the results of verification activities carried out in relation to them. The subject of claims may also be the actions / omissions of tax officials. The current legislation provides for a set of measures aimed at creating favorable conditions for interaction with payers. Dispute resolution is carried out at several levels. These include:

1. Submission of objections (in writing) to the act of control by the subject to liability, participation of the payer (his representative) in the examination of the audit materials.
2. Appeal of adopted decisions and actions / inaction committed by their officials to a higher division of the Federal Tax Service.
3. Appeal to the court.

Since January 1, 2014, important changes have been introduced into the legislation. In particular, before applying to the court, the payer must use the opportunities provided for in the Tax Code. If these measures did not give the desired result, he has every right to go to court. The latter, in turn, will not conduct proceedings if the applicant fails to comply with the requirements of the Tax Code regarding compliance with the preliminary appeal procedure.

Conclusion

The pre-trial procedure is aimed at promptly eliminating obvious violations of the interests and rights of citizens and legal entities. This, in turn, ensures proper quality control of the activities of divisions and employees of the Federal Tax Service through statements and complaints of payers. An analysis of the messages received from the entities allows timely notification of the management about existing problems in the system. A generalization of the results of the consideration of accepted complaints of payers on revealed facts of violation of their interests and rights helps to improve existing and develop new mechanisms and techniques aimed at reducing the number of cases of non-compliance with legislation by the regulatory authorities.