[Plaintiff-Appellant] Plaintiff (Law Firm Nam-Anng and 1 other, Counsel for plaintiff-appellant)

Daejeon Head of the District Tax Office

October 29, 2009

Daejeon District Court Decision 2007Guhap1608, 1981 decided Nov. 26, 2008

1.The judgment of the first instance shall be modified as follows:

A. Of the instant lawsuit, the part of the claim for revocation of a decision on tax investigation and disposition shall be dismissed.

B. (1) The part of the Defendant’s imposition of global income tax of KRW 9,55,180 for the Plaintiff on May 9, 2006 exceeding KRW 6,425,454 of the imposition disposition of global income tax of KRW 9,55,180 for the year 200;

(2) The Defendant limited on June 5, 2006 to the Plaintiff:

(A) the portion exceeding 3,670,008 won in the disposition of imposition of global income tax of 18,553,160 for the year 2001;

(B) the portion exceeding KRW 59,958,82 of the disposition imposing global income tax of KRW 63,733,000 for the year 2002,

(C) the portion exceeding KRW 24,057,015 in the disposition of imposition of global income tax of KRW 27,618,410 for the year 2003:

(D) the portion exceeding KRW 6,568,989 in the disposition of imposition of value-added tax of KRW 7,788,430 for a period of one year 2001;

(E) the portion exceeding KRW 5,334,817 in the disposition of imposition of value-added tax of KRW 7,508,810 for the second period of 201;

(f) the portion exceeding 18,693,949 won in the disposition of imposition of value-added tax of 19,105,370 won for a period of one year 2002:

(G) the portion exceeding KRW 9,508,087 in the disposition of imposition of value-added tax of KRW 10,304,390 for the second period of 202,

(h) the portion exceeding KRW 5,489,686 in the disposition of imposition of value-added tax of KRW 6,911,550 for a period of one year 2003;

(i) The portion exceeding KRW 8,241,868 in the disposition of imposition of value-added tax for the second period of 203 7,848,120

Each cancellation shall be revoked.

C. The plaintiff's remaining claims are dismissed.

2. The total costs of a lawsuit shall be three-minutes, and such two-minutes shall be borne by the Plaintiff, and the remainder by the Defendant, respectively.

1. Purport of claim

The investigation and determination of the Defendant sent to the Plaintiff on March 5, 2007 as indicated in the notice of tax investigation shall be revoked. The part exceeding 987,508 won out of the imposition of global income tax for 200 years and 9,55,180 won against the Plaintiff on May 9, 2006; the part exceeding 18,53,160 won of global income tax for 2006, the part exceeding 63,73,000 won of global income tax for 202, 26,31,387 won of the imposition of global income tax for 207, 209, 207, 209, 207, 209, 307, 209, 207, 309, 207, 209, 207, 308, 205, 207, 209, 2005 won of value-added tax for 205 years and 38.

2. Purport of appeal

The part against the defendant in the judgment of the first instance shall be revoked, and the plaintiff's claim corresponding to the above revocation shall be dismissed.

3. Purport of incidental appeal;

The rejection of the lawsuit in the judgment of the first instance shall be revoked. The decision of the defendant sent to the plaintiff on March 5, 2007 by the defendant to the plaintiff shall be revoked.

1. Details of the disposition;

The court's explanation on this part is the same as the corresponding part of the judgment of the court of first instance, and therefore, it refers to Article 8 (2) of the Administrative Litigation Act and Article 420 of the Civil Procedure Act.

2. Whether the part concerning a request for revocation of a decision on tax investigation and disposition among the lawsuit in this case is legitimate

A. The parties' assertion

(1) The plaintiff's assertion

Although the Defendant had already conducted an initial tax investigation and reflected the result of the tax disposition by the Plaintiff, the Defendant again decided to conduct the instant tax investigation on the ground that the informant submitted an additional statement of receipt of the criminal case, etc. However, since the above criminal case acceptance book is merely a document for convenience in the operation of the law office and does not reflect the exact details of revenue, it does not comply with the requirements of Article 81-4(2) of the former Framework Act on National Taxes (amended by Act No. 8830 of Mar. 31, 2007; hereinafter the same shall apply) that stipulates that a re-investigation shall be conducted only when there is evident evidence to prove the suspicion of tax evasion. Since a tax investigation is a public authority of an administrative agency infringing on the specific rights of the public, it constitutes a disposition that can be challenged by administrative

(2) The defendant's assertion

A tax investigation is not only a preliminary act to promote the appropriateness of disposition by collecting data on specific facts necessary for future disposition based on the right of inquiry and investigation prescribed by tax-related Acts, but it is not a disposition that is subject to lawsuit.

B. Relevant statutes

Attached Table 1 shall be as stated in the relevant statutes.

C. Determination

(1) The term "disposition of an administrative agency, which is the subject of an appeal litigation, refers to, in principle, an act of an administrative agency under public law, which directly affects the rights and obligations of the people, such as ordering the establishment of rights or the burden of obligations, or directly generating other legal effects with regard to a specific matter, and thus, it does not constitute an act that does not directly change the legal status of the other party or

(2) In collecting taxation data, a series of acts conducted by a tax official by exercising his/her right of questioning and inspection to investigate and verify the facts meeting the taxation requirements and collecting direct and indirect materials necessary for taxation is conducted on the premise of a taxpayer’s consent. However, the other party to the question is indirectly forced to answer questions and undergo inspections through sanctions on false statements, etc. In this sense, the exercise of the right of questioning during a tax investigation can be deemed as an act of fact, the nature of which is the exercise of public authority, and therefore, there is no room to be an administrative litigation at all.

We examine whether the "decision to conduct a tax investigation" as stated in the prior notice of tax investigation itself has the nature of a disposition subject to appeal litigation.

Where a tax official investigates account books, documents, and other articles, etc. for the purpose of the investigation on the national tax, he/she may initiate the tax investigation without prior notice, in cases where it is deemed that the purpose of the investigation can not be achieved due to the destruction of evidence, etc. (Article 81-7(1) of the former Framework Act on National Taxes). Thus, in cases where an investigation or prior notice of an offence case is conducted, it does not indicate outside the decision to initiate the tax investigation through prior notice without exception. It is the main purpose of prior notice to allow taxpayers to sufficiently prepare for the tax investigation to smoothly conduct the tax investigation by obtaining voluntary cooperation from taxpayers. Thus, even if the tax office has decided to initiate the tax investigation with prior notice, such prior notice is not an administrative act that directly restricts the rights and duties of the people, but it is merely an internal policy of the tax office to initiate the tax investigation prior to the commencement of the tax investigation. Accordingly, in order to enable taxpayers to undergo the tax investigation without prior notice to the commencement of the tax investigation, it may be deemed that the prior notice is not a specific one imposing a new duty to do not directly related to do so.

(3) Therefore, the part on the claim for cancellation of the tax investigation decision and disposition among the instant lawsuit is unlawful.

3. Whether the instant disposition is lawful

A. The parties' assertion

The plaintiff asserts that the disposition of this case is illegal as follows.

First, the receipt book of civil cases is prepared for the convenience of the plaintiff's office's work, and does not properly reflect the details of the refund of fees or part of the litigation costs, so it cannot be considered as the basic data for calculating the plaintiff's income far from the accuracy.

Second, the instant taxation disposition, which was made without considering the fact that some of the contingent remuneration stipulated in the criminal agreement was not paid or returned to the client for reasons such as failure to fulfill the conditions, was unlawful.

B. Determination

The facts that the tax base of value-added tax and the total amount of global income tax confirmed as a result of the Defendant’s investigation by the date of the initial tax investigation and the date of the closing of the argument in this case are as indicated in the “justifiable Tax Base and Revenue Table” and the “total amount of revenue confirmation” in the attached Table 2, and that the legitimate tax base and revenue amount calculated based on the same are the amounts listed in the “justifiable Tax Base” and “justifiable Revenue Amount” column in the

If a legitimate amount of tax for each taxable period of the instant disposition for which the Plaintiff seeks revocation based on the aforementioned legitimate tax base and revenue amount is calculated, it is as indicated in the “justifiable Tax Amount” column in the attached Table 3. Therefore, the portion exceeding the said legitimate amount of tax in the instant disposition is unlawful.

4. Conclusion

Therefore, the part of the plaintiff's claim for cancellation of the disposition of tax investigation among the lawsuit of this case is dismissed, and the part of the claim for cancellation of the disposition of this case is justified within the scope of the above recognition, and the remaining part is dismissed as it is justifiable. Since the plaintiff's incidental appeal concerning this part is without merit, and the part of the claim for cancellation of the disposition of tax investigation in the judgment of the court of first instance against the defendant among the part of the claim for cancellation of the disposition of this case is unfair in some conclusion, and therefore, the defendant's appeal is partially justified. It is modified as per the judgment of the court of first instance (However, since only the defendant appealed to the part of the claim for cancellation of the disposition of this case, it is not possible to change the judgment of the court of first instance on the part of the disposition of tax investigation for the second

[Attachment]

Judges Cho Soo-soo (Presiding Judge) Maximum index