Distinctive features of tax disputes

To understand the essence of the problem, we must proceed from the fact that tax law is not only what is written in the Tax Code (NC) of the Russian Federation. Tax law is a complex of social relations embodied, first of all, in the law-enforcement practice of tax authorities and courts.

From this it follows logically that the complexity of corporate law is due to the fact that it is not singled out into a separate branch of law, and is a synthesis of separate legal institutions from different branches of law.

Tax relations in general are public relations, i.e. relations between the subjects of law, about the exercise of power by one of the participants in relation to another (Article 2 of the RF Tax Code). This is the fundamental difference between tax disputes and civil disputes, where the relations between the parties are “horizontal”, i.e. based on the voluntary establishment of relations of the subjects.

This implies other features of tax disputes. The tax authority, unlike the taxpayer, is always free to choose its goal and strategy for achieving it. At the stage of determining the purpose, the tax authority is guided primarily by the plan for fees and the solvency of the taxpayer. The question of ways to achieve goals is the second question.

For a clear understanding of the prospects for the relationship of the taxpayer with the tax authorities, we suggest considering what changes in tax policy we have today.

Many taxpayers, unfortunately, do not want to admit the real state of affairs and tend to extremes in their judgments. One extreme is the unwillingness to understand new realities and the desire to work in the old manner, which leads to an underestimation of the seriousness of the situation. The other extreme is the conviction that "it is useless to sue, they will still condemn."

If you try to understand the real situation, then we can state the following.

On the one hand, in 2016 there has been an almost twofold decrease in the number of tax disputes that are considered in arbitration courts. On the other hand, the share of court decisions in favor of the tax authorities has sharply increased. So for 2016, the share of decisions in favor of the tax authorities was 80%.

Statistics is not funny. What is the reason for such changes? Of course, you can talk a lot about tightening the tax policy of the state and the general injustice of life. But just to determine such a statement, you can simply: "stagnation and unwillingness to improve yourself." In this situation, there is something to think about and just start with introspection.

First of all, it is necessary to state the far faulty position of taxpayers, who, for the most part, ignore trends and changes in the tax policy of the state.

Previously, until 2010, indeed, the judicial work of the tax authorities could not be called highly professional. But, from the beginning of the "tenths", the Federal Tax Service of the Russian Federation has been persistently pursuing a policy of improving the work on the consideration of tax disputes. Agree, to improve the work is normal, but to count endlessly on the lack of professionalism and the sluggishness of the tax authorities - to put it mildly, the position is short-sighted.

Consider the components of tax success in tax disputes.

Improvement of work at the pretrial stage, or so-called. “Pre-trial audit”. The decision to create independent tax audit units within the Federal Tax Service was a reaction by the Ministry of Finance to President Putin’s statement on "tax terrorism." Such a statement of the state of affairs marked the beginning of a new doctrine, according to which claims should only be brought before the courts for really winning cases. Since then, the line on a thorough selection of "real" cases for judicial review continues. With the adoption of the law of July 2, 2013 No. 152-FZ, the improvement of the quality of pre-trial appeal of acts of tax authorities has been drawn up at the level of the law.

Here it will be useful to pay attention also to the Order of the Federal Tax Service of the Russian Federation of October 14, 2016 N ÌÌÂ-7-18 / 560 @ “On the organization of work on representing the interests of tax authorities in courts”.

All this allowed the tax authorities to concentrate on those court cases that have a real prospect of winning in court and form the relevant judicial practice.

Methodical work of the Federal Tax Service.

From the beginning of the “tenth” years, the FTS has been actively working on the methodological analysis of tax disputes. Regular reviews of judicial practice and positions of higher courts point to the ongoing analytical work of the Federal Tax Service on litigation. This is indicated, for example, by the Letter of the Federal Tax Service of the Russian Federation of April 17, 2017 N SA-4-7 / 7288 @ “On the direction for use in the review of legal positions reflected in the judicial acts of the Constitutional Court of the Russian Federation and the Supreme Court of the Russian Federation adopted in the first quarter of 2017, taken on tax issues. "

In addition, thematic reviews of judicial practice on specific aspects of the judicial work of tax authorities (letter of the Federal Tax Service of the Russian Federation of October 31, 2013 No. CA-4-9-19592, unjustified tax benefit) or on state registration of business entities (letter of the Federal Tax Service of 07/01/2015 number SA-4-14 / 11453).

We especially note that in these reviews cases are cited, decisions on which are made not only in favor of the tax authorities, but also against them.

It should be noted that the continental legal system, based on codified legislation, and supposedly not based on precedents, in fact does not reject those very precedents. Simply, they are called “established court practice”. And here it is necessary to note the persistence of the tax authorities in the formation of judicial practice in their favor.

Each case of the termination of a legal dispute, regardless of whose decision was made, the taxpayer considers as a “special case”. At the same tax attitude to court decisions is different. Even if the court decides not in favor of the Federal Tax Service, it is material for analysis and further improvement of work in the courts. Well, if the decision is made in favor of the tax authorities, then this is another contribution to the formation of judicial practice or the creation of the “necessary” precedent. It is in this context that the “capitulatory” position of some taxpayers should be considered, for whom it is better to make sacrifices and not get involved in litigation.

Conclusions from the consideration of the problem.

First of all, we urge that it is unreasonable to complain about someone who does a good job, in this case, the Federal Tax Service authorities. It is even more unwise to ignore changes in legislation and try to live and work in the old manner, hoping for a chance.

It is necessary to understand that today we are faced with the work of the state machinery, practicing a systematic approach, having an action program, a goal and chapters Now, an appeal of an act of a tax authority in an administrative procedure is not such a hopeless procedure as it was just recently. This is the will to improve the quality of its work.

It is also necessary to understand that at the present time the center of gravity of tax disputes has shifted noticeably from judicial challenge to pre-trial proceedings (pre-trial audit).

Now, an appeal of an act of a tax authority in an administrative procedure is not such a hopeless procedure as it was only recently.

The balance of interests in tax disputes.

In a tax dispute with the court "on two scales" two mutually exclusive positions. What will outweigh?

We insist that the client should proceed from the axiom: “The interests of the commercial structure in a court dispute are less weighty for the court than the interests of the tax authorities”. It is from this that the taxpayer in court must proceed in determining his defense strategy. Whoever disagrees with this, can look for a more “convenient” lawyer who guarantees 100% success.

In order to get the upper hand on the results of a tax dispute, the position of the taxpayer must be justified flawlessly. At the same time, it is impossible to look in a simplified way that the requirements of the tax authority may not look sufficiently substantiated. Of course, according to Art. 65 of the APC of the Russian Federation, each party to the dispute bears the burden of proving the circumstances relied on to substantiate its claims or revivals. But for taxpayers in tax disputes, this is much more relevant than for tax authorities. The court will “forgive” tax inspectors in their legal position, but the taxpayer cannot count on the same indulgence.

Now we can safely say that the strategy of the relationship of the taxpayer with the tax authorities should proceed from the conventional cinema thesis: "Everything you say (or forget to say) can be used against you."

Practice shows that if the taxpayer's position is poorly substantiated, or even when the taxpayer submitted to the court the proper arguments and evidence, but with violation of the necessary order, then the taxpayer's arguments may not be heard. Worse, if the taxpayer's arguments are not reflected in the judicial act. In this case, it will no longer be possible to present “missed” evidence or additional arguments in a higher authority. Thus, it becomes harder to appeal the court’s decision.

The taxpayer must clearly understand that it is he who is responsible for proving the facts that should be put by the court in support of the decision in his favor. If the taxpayer did not show due diligence in justifying his position, then we should say that it was the taxpayer who set up the steps, and not the court. Such a harsh reality.

Conclusions:

• In a broad sense, corporate law is a set of legal norms governing the creation and operation of economic societies and partners
• The court decision that has entered into force will be legal, even if it is based on the "ugly" legal position of the Federal Tax Service;
• After the entry into force of the decision, further appeal against the judicial act will be problematic.

Psychology of the court and the parties to the tax dispute

The taxpayer in court is the most unfavorable psychological position. For employees of tax authorities, participation in courts in tax disputes is a profession where they have the necessary experience and, as a result, the necessary psychological stability. The taxpayer, in any case, participates in the courts much less frequently than the tax authorities.

The cost of loss for the parties is far from equivalent. The taxpayer risks losing his own, often earned by years of hard work. The tax officer will receive his salary, he simply will not select someone else. In case of failure, tomorrow's success will compensate the tax authorities for the loss of today. This results in a huge difference in the psychological state of the parties to the dispute. No need to explain further?

Tax payers often tend to "hope for a miracle" and not see all the nuances of the process. The most common mistake of taxpayers is to assume that judges exclusively formally evaluate the evidence and arguments of the parties and make decisions automatically.

Once again we pay attention: the judges are not robots, they are living people with their emotions, psychological attitudes and, finally, psychological fatigue from the constant negative emotions shown in the courts. Moreover, the judges are highly qualified specialists in litigations. It is much more difficult to hide from them the groundlessness or defectiveness of the position of the parties to the dispute than it seems to the participants in the process. Judges immediately determine the slyness of the parties and attempts to “retouch” the defects of their legal position. Why are we surprised if they do not react the way we want to try to manipulate them? It should be clearly understood that judges do not laugh at such attempts because they are already not funny. It is puzzling when the parties to the dispute stubbornly refuse to see it and offer deliberately speculative approaches to resolving their disputes. Speculations are alarming the judges, if not to say that they create additional obstacles in their work.

All this does not mean that the taxpayer is less intelligent than the taxman. This is simply due to the lack of equivalent experience in litigation.

Another thing - the position of the tax authority. Tax specialists are also a party to a dispute, they are forced to fight for their interests on the basis of competitiveness of the parties. They have their own specific task - the implementation of plans to raise funds in the budget. To do this, they often practice a “double” approach to the problem, ignore the obvious, substitute concepts, turn the essence inside out. The tax officer, in a court dispute, as a fighter in a fight, proceeds from the fact that he will not be punished for being active.

From personal contact with tax officials, the conclusion is that if the taxpayer (competently) opposes the tax authorities with a legally verified line of defense, this is unlikely to entail respectful attitude from the tax authorities. But an understanding of the futility of attempts to “unjustifiably enrich” the budget at the expense of the taxpayer can reduce the intensity of activity. In the end, you need to understand that the tax authorities have their own load, their plans. If the effort and diversion of resources required to produce a result is disproportionately higher than the actual intended result, it may become obvious that "the game may not be worth the candle." But, the question of the criteria by which the tax authorities choose their “goals” is a separate topic for discussion.

Our solutions.

We offer an integrated approach to resolving tax disputes. The component of success is joint analysis and further joint work of lawyers and auditors on the problem that has arisen. If your case does not have a positive judicial perspective, we will let you know at the beginning. Our opinion will be legally reasoned.

Preparatory Phase:

Legal advice on a tax dispute has the nature of a review and free and in principle can not contain an algorithm of actions.

On it, the consultants and the client come to a common understanding of the problem, stipulate the amount of documentation required to continue the work, find out what evidence the client has, discuss the financial issues of interaction.

Further, on the basis of the received documentation, our team evaluates the judicial prospects of the case.

Pre-trial tax dispute settlement procedure

As mentioned above, from January 1, 2009, the Tax Code of the Russian Federation established a special procedure for handling tax disputes - namely, the mandatory pre-trial claim settlement procedure for a dispute between a taxpayer, a tax agent and a tax authority.

Since then, in accordance with paragraph 5 of Art. 101.2 of the Tax Code of the Russian Federation a decision of the tax authority on the results of an on-site or desk audit can be appealed in court only after an appeal of this decision to a higher tax authority.

In connection with this innovation, the taxpayer has lost the right to simultaneously apply to the tax authorities and the judiciary to resolve the dispute. In fairness, it must be stated that the process of consideration of objections, appeals (administrative) complaints has ceased to be a mere formality, virtually eliminating a positive outcome. According to the statistics of the Federal Tax Service itself, 40% of (administrative) complaints are made in favor of taxpayers.

Nevertheless, it should be remembered that neither filing an administrative complaint, nor even appealing an order of the Inspectorate of the Federal Tax Service in court does not suspend the execution of the order of the Inspection of the Federal Tax Service, even if it is subsequently recognized as illegal. Such is the reality dictated by the tax policy of the state.

At the same time, the pretrial dispute settlement procedure gives the taxpayer its advantages. Thus, in case of a negative appeal, the taxpayer has the opportunity to carefully study the legal position of the tax authority and further use its defects when challenging in court.

I foresee objections: the tax authorities may change their position in court. In case of refusal of a complaint, they may not argue their decisions clearly.

Yes it is. Of course, the tax authorities are not bound by their own arguments. But by changing their position in court, the tax authorities have already shown the court their inconsistency. This, in turn, will influence the court decision.

Trial Stage

This stage also has its stages, the first of which is the preparation of materials for submission to the court. Here the customer (taxpayer) must participate quite actively. He is required to clarify the problem, provide the missing evidence, calculations, etc.

The following are the procedural steps: the presentation of materials to the court and the representation in the process of a lawyer and, if necessary, an auditor. This stage ends with a court ruling.

Conclusions.

Tax disputes - a complex phenomenon, which has many stages. Each stage has its own characteristics. It is extremely important to understand the features of each stage of the dispute, the relevant arguments of the taxpayer, the procedural order and the timeliness of the presentation of their arguments.

It must be remembered that it is extremely important to prepare and present your arguments without delay. But it is equally important to keep temperament and refrain from false start.

Quality support in solving any problem can be provided only by a professional. We do not exclude a certain percentage of luck, even with the assistance provided by the amateur, is all. However, with professionals safer. Therefore, come discuss.