2016Guate 56585 Action for Revocation of Disciplinary Action

A

Minister of Strategy and Finance

June 2, 2016

July 21, 2016

1. The plaintiff's claim is dismissed.

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

On June 23, 2015, the defendant's disposition of suspension of duty against the plaintiff shall be revoked in both a year of suspension of duty and an administrative fine of five million won.

1. Details of the disposition;

A. The Plaintiff, a certified tax accountant, from October 201 to October 201, was in charge of tax bookkeeping and verification of faithful reporting for C engaged in the manufacturing of electronic parts under the trade name of “B.”

B. From August 12, 2014 to October 18, 2012, the Central and Medium Regional Tax Office conducted a personal integration investigation with respect to C for three taxable periods from August 2, 2010 to October 2012 as a result of the investigation, confirmed that the necessary expenses for which evidence was not prepared at the time of filing global income tax returns in 201 and 2012 were included in KRW 757,000,000,000,000 for global income tax was omitted. According to the results of the investigation, the Central and Medium Regional Tax Office requested the Chairperson of the Tax Accountant Disciplinary Committee on May 28, 2015 to take disciplinary action against the Plaintiff on the ground of the following reasons (hereinafter “instant disciplinary action”).

C’s inclusion of necessary expenses, such as payment fees, in the book when filing a return on global income tax for the year 2011 and 2012, C claimed payment of remittance statements and personnel expenses presented by C in cash and claimed them to be related to the business, and thus, C’s reliance on eligibility verification and processing expenses without evidence of expenditure, made C evade comprehensive income tax by making false entries in the book, and breached Article 12 of the Certified Tax Accountant Act, because it did not fulfill the general duty of care required for certified tax accountants by falsely verifying the certificate of bona fide return.

D. On June 23, 2015, the Defendant, following a resolution of the Certified Tax Accountants Disciplinary Committee, rendered a disciplinary action of one year of suspension from office and five million won of fine for negligence to the Plaintiff (hereinafter “instant disposition”).

E. The Plaintiff appealed and filed an administrative appeal with the Central Administrative Appeals Commission on July 2, 2015, but the Central Administrative Appeals Commission dismissed it on January 5, 2016.

[Reasons for Recognition] Facts without dispute, Gap evidence 2, 3, Eul evidence 1 to 3, 5, and 6 (including branch numbers), the purport of the whole pleadings

2. Whether the instant disposition is lawful

A. The plaintiff's assertion

① A certified tax accountant has no choice but to conduct tax adjustment only based on data submitted by his/her mandator. The instant disposition is unlawful in light of the following: (a) the Plaintiff reflects the processing expenses of the instant case based on various data received from C and his/her statement; (b) the Plaintiff was not paid any other consideration from C in addition to tax agency fees based on relevant statutes; (c) the Plaintiff’s bona fide verification system is regarded as a taxpayer’s unfaithful; and (d) the Plaintiff was not subject to disciplinary action or punishment in the course of performing his/her duties in good faith and was given three times by the Prime Minister and the Commissioner of the National Tax Service.

It is as shown in the attached Form.

C. Determination

1) Relevant legal principles

If a disciplinary action is taken against a person subject to disciplinary action for the reason for the disciplinary action, the person who has the authority to take the disciplinary action shall take the discretion, but it is recognized that the person having the authority to take the disciplinary action has abused the discretion because the disciplinary action taken as the exercise of discretion has considerably lost validity under social norms

In order for a disciplinary measure to be deemed unlawful only when it comes to fall under such a case, the disposition shall be deemed unlawful, and it shall be deemed that it is objectively unreasonable in light of the characteristics and nature of the duty, the contents and nature of the misconduct caused by the grounds for the disciplinary measure, and the purpose of achieving the disciplinary measure through the disciplinary action, and all the circumstances accompanying it (see, e.g., Supreme Court Decision 2004546, May 11, 2006).

2) In the instant case:

In full view of the following circumstances revealed by the purport of the entire pleadings, it is difficult to view the instant disposition to have significantly lost its validity by social norms even considering the circumstances alleged by the Plaintiff.

Therefore, the instant disposition is lawful.

(1) The bona fide return verification system provided for in Article 70-2 of the Income Tax Act is introduced to prevent a bona fide return in advance and to supplement the limit of the administrative ability of tax investigation by inducing a personal entrepreneur whose size is more than a certain size to verify the appropriateness of accounting and tax treatment by a tax specialist before filing a income tax return.

② Although the Plaintiff’s mission is a tax specialist with public nature and a tax accountant who contributes to protecting the rights and interests of taxpayers and having them faithfully perform his/her tax liability, even if a high level of duty is required to faithfully perform his/her tax liability, he/she did not verify objective evidentiary documents in appropriation of necessary expenses but neglected his/her duty to faithfully perform his/her duties. Even if the bona fide return verification system acts at the tax agent’s expense, the Plaintiff’s performance of his/her duty to faithfully perform his/her duties is clearly neglected. However, in light of the purport of the aforementioned system and the degree of the Plaintiff’s breach of duty to pay attention,

③ In the event that the Plaintiff’s breach of the duty of good faith was verified in C’s 201 year and 2012, the amount of false verification reaches KRW 757 million, and the degree of such breach of the duty cannot be deemed to be less than that of C’s breach of the duty.

(4) Article 2 (1) 3 (b) of the above provision provides that "the amount of tax evasion due to improper entry is more than 50 million won," and Article 2 (1) 5 (a) of the same provision provides that "the amount of tax evasion due to improper entry shall be more than 50,000 won" and "one-year period of suspension of duties" and "one-two years of suspension of duties" and the disposition of this case shall be determined within the scope of the disciplinary determination prescribed in the above provision.

⑤ Even if the instant disposition is compared with the cases of similar disciplinary action, it does not seem that it is particularly excessive to the extent that it goes against equity.

3. Conclusion

Therefore, the plaintiff's claim of this case is dismissed as it is without merit, and it is so decided as per Disposition.

Chief Judge, Senior Judge and Circuit

Judges Park Jae-young

Judge Shee-hee

A person shall be appointed.