2. The costs of lawsuit shall be borne by the Plaintiff.

Cheong-gu Office

The Defendant revoked each disposition of the global income tax for the Plaintiff on July 1, 201, 207, the global income tax for the year 2008, the global income tax for the year 2008, and the global income tax for the year 2009 (the date of the disposition stated in the claim in the complaint appears to be written in writing on July 3, 201).

A. From May 16, 1998, the Plaintiff is an individual entrepreneur who operates an OO-Gu OO-dong 1652-32 to BB with expertise in kidy kidy kidy kidy kidy kidy kidy kidy kidy kidy, and the major expenses are deducted from the amount confirmed by documentary evidence and the other expenses are returned and paid the total income tax for the year 2007 to 2009 (hereinafter “instant taxable period”).

B. On the ground that the Plaintiff’s workplace can be calculated based on the amount of income, principal expenses, etc., the Defendant conducted an on-site investigation on the Plaintiff’s workplace from June 2, 201 to June 15 of the same month. On July 1, 2011, the Defendant issued a correction notice of global income tax amount for global income tax for 2007, global income tax for 2008, global income tax for 2009, and global income tax for 2009 (hereinafter “first disposition”).

C. The Plaintiff filed an appeal with the Tax Tribunal on September 23, 201, but was dismissed on December 6, 2011.

D. While the instant lawsuit is pending, the Defendant recognized most of the additional expenses claimed by the Plaintiff except where it is apparent that they are either overlapped or not related to the business during the course of the instant lawsuit, and subsequently corrected the comprehensive income tax for 2007, the integrated income tax for 2008, the integrated income tax for 2009, and the integrated income tax for 209, respectively as the OOO of the total income tax (hereinafter “instant disposition”).

[Ground of recognition] Facts without dispute, Gap evidence Nos. 1 through 3, Eul evidence Nos. 1 and 2 (each number Nos. 1 and 2), the purport of the whole pleadings

2. Whether the instant disposition is lawful

A. The plaintiff's assertion

1) The Plaintiff received a reply from the head of the competent tax office around 1999 that the standard expense rate was lawful and sent to the Plaintiff, and received a return of estimation based on standard expense rate from the global income tax for the year 2000. On August 2007, the Defendant did not have any question as to the return of estimation when undergoing a field investigation on global income tax for the year 2006. Accordingly, the Plaintiff failed to keep records of other expenses, such as personnel expenses, medicine expenses, and water and mineral heat expenses, and did not have any documentary evidence. This constitutes “where there is no necessary account books and documentary evidence in calculating the tax base under Article 143(1)1 of the Enforcement Decree of the Income Tax Act, or where there is no material part or falsity, the instant disposition is unlawful. Also, according to the standard expense rate determined by the Commissioner of the National Tax Service after investigating the average expense rate of the business operators engaged in the same type of business. Accordingly, according to the Plaintiff’s disposition, it is acknowledged that the actual expense was not fully reflected.

2) Since the Defendant granted during that period the Plaintiff the trust that it would make the said estimated return, the instant disposition violates the principle of trust and good faith.

(b) Related statutes;

It is as shown in the attached Table related statutes.

(c) Fact of recognition;

1) The Plaintiff is a health business operator (general internal department) and the total amount of revenue in the immediately preceding taxable period of the instant taxable period is not less than OOO won. Thus, the Plaintiff is subject to double-entry bookkeeping pursuant to Article 160(3) of the Income Tax Act and Article 208(5)2(c) of the Enforcement Decree of the same

2) However, the income rate according to the details of global income tax return, which was first implemented from 1998 when the Plaintiff opened the instant place of business until 2002, was as follows. From 2003 to the date of the instant disposition, the income rate became within 10% by applying the standard expense rate.

Classification

1998

199

200

201

202

Type of Report

Double entry

Double entry

Simple Book Keeping

Simple Book Keeping

Standard expense rate

Income Rate

2.41% by mass

22.68%

7.67%

9.09%

10.08%

3) The details of the Plaintiff’s return on the global income tax by calculating the expenses, other than the major expenses, for the instant taxable period according to the method of estimated return are as follows.

Classification

Reversion to the year 2007

208 Reversion of year 2008

209 Reversion

(1) Total amount

OOO

OOO

OOO

(2) Necessary expenses

(1) Major expenses.

Purchase Costs

OOO

OOO

OOO

Labor Expenses

OOO

OOO

OOO

(2) Other expenses calculated by standard expense rate.

OOO

(Standard expense rate 27%)

OOO

(Standard expense rate 27%)

OOO

(Standard expense rate 28.3%)

Necessary expenses limit (1+B)

OOO

OOO

OOO

Estimated income amount (1)-(2)

OOO

OOO

OOO

Income Rate

9.69%

1.66%

1.38%

4) On April 12, 201, the Inspector of the Daejeon Regional Tax Office ordered the Defendant to verify whether the Plaintiff could calculate the real income amount with the reason for the return of the global income tax by estimation method, account books kept and recorded and other documentary evidence, deeming that the Plaintiff was suspected of underreporting the amount of income by estimation based on standard expense rate return.

5) The Defendant confirmed on-site from April 13, 201 to May 15, 2011, and reported most of the major expenses by the Plaintiff by the “Director General”, and determined that the calculation of actual income would be possible, and conducted a tax investigation from June 2, 201 to June 15, 201.

6) As a result of the tax investigation, the Defendant did not have omitted filing a report on the total amount of income, and it is possible to verify the major expenses initially reported on the basis of the president of the account, and it is possible to verify other expenses through the business account (telec, social membership fees, hospital subscription fees), and the statement of expenditure for credit borrowed (office supplies, welfare expenses, and vehicle maintenance expenses). As such, the Defendant considered that the real income can be calculated by deeming the necessary expenses to be necessary expenses as follows.

7) On June 19, 2012, the Plaintiff, while proceeding in the instant lawsuit, submitted the details of the tax invoice for the total amount of OOO(s) paid during the instant taxable period, such as payment fees, expendable expenses, expenses for printing books, expenses for printing books, and advertising and publicity expenses, and the Defendant, following the review of the said data, recognized the OO(s) as necessary expenses (hereinafter “the first submission expenses”).

8) On October 18, 2012, in order to prove other expenses disbursed during the instant taxable period, the Plaintiff submitted additional data equivalent to the total amount of OOOO won in addition to the credit card usage details, health insurance premiums, and receipts for the portion of the national pension business operator’s share of expenses.

9) After a review of the above data, the Defendant recognized the additional necessary expenses, excluding the sum of the expenses used in neighboring marinas, private teaching institutes, department stores, etc. in the Plaintiff’s place of residence and the expenses unrelated to the Plaintiff’s business (hereinafter “second submitted expenses”).

Year

Original notified Tax Amount

Amount of corrected tax;

July 5, 2013

Amount deducted

Income Rate

2007

OOOE

OOOE

OOOE

30.2% by mass

208

OOOE

OOOE

OOOE

32.3% by mass

209

OOOE

OOOE

OOOE

34%

10) On July 5, 2013, the Defendant reflected the first and second submitted expenses in the necessary expenses, and subsequently adjusted the original disposition as follows, and the Plaintiff’s income rate accordingly is as follows.

[Reasons for Recognition] Facts without dispute, Gap evidence 4 through 28, Eul evidence 2 through 13, and the purport of the whole pleadings as a result of fact inquiry about the KB National Card, non-Cch Card Co., Ltd., and new card Co., Ltd.

D. Determination

1) Determination on the first argument

A) In principle, the tax base and tax amount of global income tax should be determined by the actual amount revealed by the method of a field investigation. Inasmuch as the method of taxation by estimation is exceptionally recognized in cases where there is no taxpayer’s account books and documentary evidence, which are the basis of the determination of the tax base and tax amount, or where it is impossible to use them by the method of a base taxation because the details are incomplete or false, even if some of the account books and documentary evidence kept by the taxpayer, excluding those parts are clearly consistent with facts and can be calculated based on this, if the tax base can be determined by the method of a field investigation, the tax base and tax amount can not be determined by the method of a field investigation, and only if it is impossible to conduct a field investigation and it is inevitable to do so by the method of a estimation, it cannot be deemed that the requirements of a field investigation are met solely on the grounds that the taxation disposition by the field investigation is more unfavorable than by the method of an estimated taxation, or that the taxpayer wants to investigate and determine by the method of estimation (see, e.g., Supreme Court Decisions 95Nu22689, Aug.

In addition, the tax authority shall point out the illegality of a tax invoice, account books, and other documents submitted by a taxpayer while filing a tax base and tax amount, and conduct a field investigation by receiving new data, and even if based on such data, it shall make a decision on the tax base and tax amount (see, e.g., Supreme Court Decision 94Nu15202, Jul. 30, 1996) only when it is impossible to determine the tax base and tax amount (see, e.g., Supreme Court Decision 94Nu15202, Jul. 30, 1996). Since in an administrative litigation seeking revocation for the illegality of taxation, the tax authority bears the burden of proving the legality of taxation and the existence of taxation requirements, in principle, necessary expenses, which are the basis of the determination of taxable income, in principle, the tax authority bears the burden of proving the necessary expenses. However, since necessary expenses are most favorable to the taxpayer, and the tax authority is in most areas within the controlled area of the taxpayer and thus it is difficult for the taxpayer to prove it (see Supreme Court Decision 2005Du64767, Apr. 14.

B) In light of the following circumstances revealed by the above facts, in calculating necessary expenses, which constitute an important part of the instant disposition, the Defendant: (a) examined the time when the Plaintiff was subject to tax investigation through a lawful on-site investigation and all the allegations and supporting facts thereafter; and (b) took the instant disposition after reflecting them in necessary expenses; and (c) there is no other reason to deem that the instant disposition constitutes a case where a field investigation is impossible due to the existence of necessary expenses not reflected in the instant disposition.

① The total revenue amount of the Plaintiff reported is the same as that of the Defendant’s total revenue amount, and the major expenses, such as drug expenses, water and mineral heat expenses, and personnel expenses, which seem to account for most necessary expenses, shall be verified by the president of the account.

② During the instant lawsuit, the Defendant accepted to the maximum extent possible the Plaintiff’s assertion and proven, and recognized the remainder, other than the clear portion of personal use, such as receipts, use of credit cards, and account transfer submitted by the Plaintiff, as other expenses, and disposed of the instant disposition.

③ Although the Plaintiff asserts that there was no evidence to prove other spendings for a long time, most of the details of the Plaintiff’s disbursement related to the Plaintiff’s business appears to have been disbursed through credit cards or business accounts, and other spending items that may be presented as expenses have already been asserted and submitted in the instant litigation process, and the Plaintiff did not specifically claim the items for which the disbursement was not proven due to lack of evidence.

④ The Plaintiff, as a person subject to double-entry bookkeeping, has a duty to record the asset status of business and the change in the content of profit and loss transactions without being omitted. Thus, even if the expenditure of other expenses was not properly kept, this is basically

(5) Standard expense rate is determined in consideration of the average expense rate surveyed according to the characteristics of the type of business and the characteristics of the enterprise with regard to the average enterprise in terms of the scale and conditions of business, but the expense rate may vary substantially with standard expense rate depending on the characteristics of the individual enterprise.

(6) Furthermore, standard expense rate is applied to small-scale business operators who are not obligated to keep a book by double entry. Therefore, even if the expense rate recognized as a result of a field investigation by the Plaintiff is different from standard expense rate, such circumstance alone cannot be presumed to have the Plaintiff’s actual expense rate equal or similar to standard expense rate.

7) In the case of 199 that the Plaintiff reported the actual income and necessary expenses by double entry (in 1998, hereinafter the 1998 business was commenced), the income rate was 22.68%, and the income rate was 10% higher than that of 10% upon filing a return by applying standard expense rate.

(8) Although 10% of the income rate appears to be excessively lower in comparison with the business operators in the same type of business as the Plaintiff, it does not appear to be excessively higher in the income rate of 30% to 35% in accordance with the instant disposition.

2) As to the second argument

In administrative legal relations, in order to apply the principle of the protection of trust to the acts of an administrative agency, first, the administrative agency should name the public opinion that is the object of trust to the individual, second, the individual should have trusted and trusted the opinion opinion that is the object of trust to the individual, third, the individual should not be attributable to the individual as to the legitimacy and trust of the opinion opinion of the administrative agency. Fourth, the administrative agency should make a disposition contrary to the opinion opinion that is contrary to the above opinion list, thereby infringing the interests of the person who trusted the opinion list. Lastly, when taking an administrative disposition in accordance with the above opinion list, it should not be likely to seriously undermine the public interest or legitimate interests of a third party (see, e.g., Supreme Court Decision 2004Du46, Jun. 9, 2006).

The business operator is obligated to keep evidentiary documents, etc. to calculate the amount of income pursuant to Article 160(1) of the Income Tax Act and record and manage the books so that all transactions related to the business can be objectively grasped. Since 1998, the Plaintiff, who operated the hospital, thought that the Plaintiff could return and pay the comprehensive income tax according to the method of calculating the estimated income amount, which was prepared by himself for the convenience of return and payment of taxpayers without evidentiary documents, or that the Plaintiff did not prepare the books concerning other expenses for that reason, it is difficult to understand that the Plaintiff did not prepare the books. As alleged by the Plaintiff, even if the Defendant did not have any problem that the Plaintiff would make the global income tax return prior to the instant disposition at the base rate while filing the global income tax return, such circumstance alone is difficult to view that the Defendant expressed the public opinion that the Plaintiff would be trusted in relation to the instant disposition, and there is no other evidence to acknowledge that the Defendant expressed the public opinion that the Plaintiff would be legitimate or trust in the exercise of administrative authority. Therefore, the Plaintiff’s above assertion is without merit.

3. Conclusion

Therefore, the plaintiff's claim is dismissed as it is without merit. It is so decided as per Disposition.