We get involved in each and every step of the auditing and tax litigation process. We know how to anticipate and manage each kind of technical and strategic aspect while staying approachable and comprehensive for each of our clients.
Our firm provides its expertise at four key moments:
- Before the tax inspection
- During the tax inspection
- During the procedure of taxation
- During the tax litigation
BEFORE THE TAX INSPECTION: THE TAX AUDIT
Our firm can provide its opinion onto all the problems which can be identified by the tax authorities. This mock tax audit, like a real fiscal inspection, can be applied to a company or an individual. He allows to pinpoint any sensitive issues.
By anticipating the questions of the tax authorities, we optimize the chances to answer it positively.
Before any tax inspection, researches can be necessary with banks, customers, suppliers or any third party. They can be time consuming, specially if international activities are concerned. Any company or individual expecting to face an inspection, would certainly benefit from an early consultation, allowing to prepare all the useful explanations for a serene control.
THE TAX INSPECTION
We provide two types of assistance during a tax inspection:
- direct intervention with the auditors during the inspection process;
- shadow advisors to assist the certified accountant, the company director, or the individual who then takes the lead as the front person.
We must organize the situation, which means:
- to anticipate any questions that might be asked by the auditor during the adversarial proceedings;
- to explain in detail the business activities as well as the operation carried out, their economic principles and motivations;
- to concretely justify accounting records or the source of credits amount on the bank accounts (in cases of ESFP or individual tax audit).
This approach allows to reach the aimed result: the tax audit closeout in concluding that no tax adjustment is necessary.
THE PROCEDURE OF TAXATION
If the inspector has not been satisfied by the produced explanations, the tax control might be concluded with a ” proposal of rectification “. This act summarizes the reasons for the dispute being given in fact and in law and specifies the amount of additional tax demands and penalties, which are not still due. It establishes the base of the adversarial proceedings taking place with the administration.
*Statement regarding tax audits, Olivier Fouquet, President of the Finance Section of the French Council of State, “Lamy Contrôle fiscal et contentieux”.
On one hand, a settlement entails the definitive renunciation of any subsequent litigation; this irreversibility establishes a major inconvenience if the jurisprudence later evolves in the taxpayer’s favor. On the other hand, a litigation supposes to assume an often long and uncertain procedure. When the litigation is confirmed, it involves selecting the most appropriate appeal procedures on the tactical level.
Ultimately, we are “interpreters” between two worlds which often have a hard time understanding each other. This leads us to be much closer to our client, to help them manage this crisis and to reassure them with the solutions we can provide.
THE TAX LITIGATION: BASE LITIGATION and RECOVERY LITIGATION
The pre-litigation starts immediately after the decision to tax (notice of assessment). The attorneys then draft a ” preliminary claim” in which they develop their legal arguments. The administration then adjudicates this claim: decision of admittance or rejection.
The attorneys can address this decision within two months by introducing an appeal and a written submission to the respective court.
This appeal marks the opening of the base litigation itself. Simple in its form, the procedure of tax litigation is however very technical in its contents and requires a big experience on behalf of the attorneys: for example, several years after the first pleading, the administration can modify at any time the legal basis of the tax assessment and justify its position by totally new legal arguments. This contingency, very unfavorable for the taxpayer must be anticipated.
A recovery litigation procedure can be necessary in case of payment difficulties of the impositions (these being immediately due after the notice of assessment) or in case of inability to submit guarantees of the recovery to obtain payment deferments.
Of course, we research all the legal sources which may be relevant to our position and which are in constant evolution: international agreements, European directives, laws, jurisprudences, etc. We address this work with our client in mind and prioritize open communication with its representatives: it often allows us to call upon facts that could have been previously disregarded and therefore create new legal arguments.
Full rigor and determination are the key to win this long-distance race.
If the authorities reject our arguments, we must therefore convince the judge. We seek to facilitate the magistrate’s work by concentrating on and simplifying the essential points of a case. Within this style effect approach, we have to permanently find the right balance between “too simple” and “too complex”: ” what is simple is always false, what is complex is unusable “!