Suspensions on taxpayer accounts - what is it?

There are many different articles in the legislation on the basis of which the protection of the rights of taxpayers is ensured. At the same time, there is information on how to collect money from citizens or companies in payment of various fees. Regularly, the measures of influence increase, which leads to the fact that the bailiffs who begin to act after the court makes a special decision can apply a variety of ways to recover funds. Different branches of the Federal Tax Service may have different methods of exposure. These include the suspension of taxpayer accounts, which consists in the fact that citizens or firms cannot spend the funds in the accounts.

Concept of regulation

The suspension of operations on taxpayer accounts is represented by a special process, on the basis of which the bank stops servicing expenditure operations on the account of a citizen or organization. This can be done in whole or in part, and in the second case, the amount that must be paid by the account holder to the state is taken into account.

The lock is made exclusively in relation to expenditure measures, so the money still continues to flow into the account.

If a person or company has electronic official money, then it is also blocked by tax authorities. This measure of impact complicates the functioning of companies, as they can no longer dispose of their funds.

Suspension of expense transactions on the taxpayer accounts is an effective motivational method, since many companies and citizens, after notification of such a restriction, promptly deposit funds to pay off the debt.

What rights does the Federal Tax Service have?

Art. 31 of the Tax Code indicates the basic rights that the Federal Tax Service has. It is this organization that usually acts as the initiator in order to make a decision on the suspension of operations on taxpayer accounts. The institution also has the ability to use other methods to charge fees.

The measure to suspend account operations is applied exclusively by the direct tax authorities. Initially, notifications are sent to firms or citizens that they must transfer a certain amount of funds to pay off their debts. If there is no reaction from the recipients, then the employees of the Federal Tax Service make a decision on the suspension of expenditures on the accounts of the taxpayer. A special document is formed, which is sent to banks where there are open accounts of the company or citizen. On the basis of it, employees of banking organizations block.

What accounts cannot be suspended?

This process can be used both in ruble and foreign currency accounts. It is not allowed to apply blocking to accounts:

• deposit, represented by the investment of a certain amount of funds for a specific period of time, therefore, they usually do not carry out any expenditure operations;
• credit, intended for investment in the payment of loans, since if these funds are used for other purposes, the citizen will have additional debt to the bank;
• in transit.

Typically, banks themselves refuse to block the above accounts, but if a citizen or company representative receives information about suspensions on taxpayer accounts, he can come to the bank himself to make sure that the necessary actions are performed on the above accounts.

What expenses cannot be blocked?

Suspension on the accounts of the taxpayer implies the impossibility of performing various expenditure operations, but there are exceptions, therefore, funds continue to be spent on such purposes as:

• compensation for harm to the life or health of citizens;
• payment of alimony;
• the calculation of firms with citizens leaving the work, therefore, the remaining wages for the last days of work, various compensation payments, severance pay and various remuneration are necessarily paid;
• transferring money to pay various fees, insurance premiums or interest and fines.

Taxes are paid third in the above queue, but funds are transferred only if the bank employees have the relevant payment documents.

In practice, even costs of bankruptcy proceedings presented by the last stage of bankruptcy are allowed.

For all other operations, a suspension occurs in the accounts of the taxpayer.

Reasons for applying the procedure

There are several reasons for suspension of operations on taxpayer accounts. These include:

• the company or individual does not fulfill their obligations to pay various taxes, fines or penalties, and usually this leads to the blocking of the amount required to fulfill obligations to the Federal Tax Service;
• the declaration is not submitted by the taxpayer in a timely manner, and blocking is usually used if the documentation is not available within 10 days after the established date;
• often the suspension of operations on taxpayer accounts acts as a special guarantee that a citizen or company will fulfill its obligations to the Federal Tax Service.

Relatively recently, the tax authorities have the opportunity to use such a measure of influence in the absence of a declaration on time.

The suspension is made in relation to all taxpayer accounts, therefore there is no possibility for him to use funds held in any bank. He does not have any means for the further normal functioning of the company.

In relation to whom is such a measure used?

The decision to suspend taxpayer accounts at a bank is made in relation to different companies and individuals. A complete list is given in Art. 76 of the Tax Code, and it states that the procedure can be used to:

• companies represented by legal entities, and they may act as direct taxpayers or tax agents;
• Individual entrepreneurs who can also be not only payers of fees, but also tax agents;
• persons who are not tax payers or agents, but at the same time they have an obligation to submit any reports;
• notaries or other professionals conducting private practice;
• banks;
• direct branches of tax authorities.

Tax agents are persons who have an obligation to calculate, withhold and transfer funds to the budget to pay various fees. They can also carry out other operations specified in Art. 22 and 24 NK.

Blocking process

The blocking procedure itself is divided into successive stages, which must be followed by employees of the Federal Tax Service, otherwise their decision may be challenged.

Violation of the sequence of the above actions may become the basis for contesting the decision of the Federal Tax Service by the taxpayer.

Features of the decision to suspend

The decision to block is necessarily signed by the head of a specific branch of the Federal Tax Service. A copy of such a document is sent to the debtor himself, from where he receives information about the suspension of operations on taxpayer accounts. In this case, the document is transmitted personally on receipt or sent in such a way that the employees of the Federal Tax Service had confirmation of its receipt.

If this document will not be available to the company or individual within the prescribed time period, this could be a good reason to challenge the inspection.

A notification is sent to the bank electronically.

Can I use the funds further?

After blocking, it is allowed to use money in some cases:

• funds are allocated for paying taxes, paying salaries to a retiring employee or are intended for transferring compensation;
• there are more funds in the taxpayer’s account than the Federal Tax Service requires, so only the necessary amount is blocked, and the rest of the money the individual or company can manage at its own discretion.

In other situations, the suspension of the taxpayer accounts in the bank does not allow you to perform any actions with the money available on the account. The fact is that such a measure of influence is used specifically to motivate citizens and firms to pay taxes and fines on time.

How to unlock an account?

The presence of suspensions on taxpayer accounts is an unpleasant moment for any organization or individual entrepreneur. This is due to the lack of the ability to make the necessary operations with money. Therefore, you need to remove the lock as quickly as possible. The cancellation of such a decision is carried out for several reasons:

• the taxpayer repays his debts to the Federal Tax Service, and not only the taxes themselves, but also the accrued interest and fines are paid to them, and at the same time, documents confirming this action are brought to the inspection;
• there is a transfer of the declaration to the Federal Tax Service, due to the lack of which a decision is made by the inspection to block the account, but there must be documentary evidence of this action;
• the application for unlocking the account is transferred to the FTS department, and this is usually effective if the account has more funds than the state requires, but the suspension is applied in full for the entire amount.

The decision to cancel the suspension of operations on taxpayer accounts is made by employees of the Federal Tax Service on the day after receipt of evidence of debt repayment.

Features of illegal blocking

Often, citizens or firms receive information about the suspension of operations on taxpayer accounts, and there are no grounds for this process. In this case, an illegal blocking of operations appears. In such a situation, the inspection must transfer interest to the taxpayer for all days of such suspension.

When calculating interest, it takes into account how much money was in the account on the day of blocking. For the calculation, the Central Bank refinancing rate applicable on the day of suspension of operations is additionally applied.

When can the FTS not use the lock?

There are certain situations in which employees of the Federal Tax Service are not allowed to use this method of influence on taxpayers. These include:

• lack of financial statements within the indicated period;
• failure to submit certain tax payments by the tax agent on time;
• errors in the received declaration;
• the lack of information at the specified time from the taxpayer about what is the average number of employees in a company or an individual entrepreneur;
• the Federal Tax Service did not send a declaration at the appointed time through no fault of the company or entrepreneur itself, as this is often the reason for the malfunction of the post office or telecommunications network operator;
• the declaration was signed by a person who does not have the appropriate authority.

If the above reasons are used by the Federal Tax Service to apply the block, then the inspection may be challenged in court, after which they are recognized as unlawful, so the institution will be forced to pay interest to the company or citizen.

What features do banks have?

As soon as the bank receives a notification from the Federal Tax Service about the blocking of the account of a certain company or individual entrepreneur, its employees perform the following actions:

• a notification of suspension of operations is sent to the client;
• employees of the Federal Tax Service are provided with information on the amount of funds available in the accounts of a particular taxpayer;
• account expenses are blocked;
• new accounts or deposits are not opened for the company or individual entrepreneur;
• account closure is not allowed if there is any money on it, and if they are absent, the organization can close the account within two years.

You can check the suspension on taxpayer accounts directly at a bank or at a branch of the Federal Tax Service.

If the company sends an order to the bank with the simultaneous receipt of a notification from the Federal Tax Service about blocking accounts, then the bank cannot fulfill the client’s request.

Features of blocking in the absence of declaration

The reason for applying the suspension may be the absence of a declaration at a strictly set time. In such a situation, blocking may take place after 10 days have passed from the appointed date of delivery of the document. Suspension of operations may be imposed for up to three years.

To implement the process, a decision is sent to the bank, and the reason must be indicated in it. It is presented with information about the absence of a declaration, and its form, tax amount and deadline are also prescribed.

It is not allowed to use this reason if there is no calculation of advance payments, information on the number of employees, accounting reports or documents required by the Federal Tax Service for tax control. Lack of certificates in the form 2-NDFL also can not serve as the basis for the suspension of operations on accounts.

Even if errors are found in the submitted declaration, it is impossible to use this method of influence on taxpayers. Therefore, in such a situation, you only need to notify the company or individual entrepreneur about the incorrect content of the document, after which a certain amount of time is given to correct the errors.

Reasons for cancellation

The lock can be removed not only after repayment of the debt, but also at the closure of the company. This does not apply to entrepreneurs who decide to stop working, as they are responsible for their debts with personal property.

Also, the suspension ceases when the company or individual entrepreneur is declared bankrupt, therefore, the bankruptcy proceedings begin.

The reorganization of the enterprise is not considered a reason for canceling the decision of the Federal Tax Service.

Thus, the suspension of accounts owned by different companies or individual entrepreneurs is a process used by the tax inspectorate to influence taxpayers who do not want to pay taxes on time or file the necessary declarations. This method is considered effective, but it should be applied in a strict sequence of actions and taking into account the norms of legislation. In certain situations, it is allowed to carry out certain operations on accounts, and often the actions of the Federal Tax Service are recognized as illegal.In the latter case, taxpayers can charge interest from this institution, the amount of which depends on the frozen amount in the account.