Response to a tax authority request
A request rarely means that everything has to be answered at once and for every year. We break it down into episodes, separate those that need a response from those where the period has already expired, and respond on each one separately.
What is included
- The request broken down into episodes, with the limitation period checked for each
- A separate position on each episode rather than a general response to the whole request
- Supporting documents selected for each position
- Preparation and submission of explanations with attachments
- Support through the desk audit until the decision is issued
- Challenging the decision in the event of a refusal
Case studies
A request concerning a foreign account
The request
The client received a request from the tax authority concerning an account abroad and did not know what exactly to respond to – the request covered transactions over several years, and the documents for them were scattered.
What we did
We broke the request down into episodes, retrieved the statements and matched them against the transactions; for each episode we determined the applicable consequences and checked the limitation periods. We separated the episodes that require a response from those that no longer do.
The result
Instead of a general response to the whole request the client received a position on each episode and an understanding of where the risk is real and where time has already closed it. The expected amount of penalties turned out to be an order of magnitude smaller than the one the client had assumed.
Suspension of operations on bank accounts
The request
The client’s current accounts were frozen and the business had in effect stopped. The bank gave no reason, and the client did not understand what exactly had to be done or in what order.
What we did
We established the reason for the restriction through the tax authority and removed it – restored the data, calculated and filed the missing reports – and then sent the applications to unfreeze the accounts. Separately we agreed with the inspectorate the time frame of the desk audit and the procedure for the subsequent reduction of the tax amount.
The result
The accounts were unfrozen and the business resumed. The procedure for reducing the tax after the desk audit was agreed with the inspectorate in advance, so the overpayment was not left hanging until the end of the year.
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