Cho High 2015 Middle 2173 ( November 05, 2015)

Since the materials submitted at the time of reporting tax evasion are false documents, the propriety of the request for taxation based on such false documents is justified.

The decision on the disposition in this case shall be reasonable on the basis of the books of account submitted by the informant at the time of reporting the tax evasion of the requesting corporation.

Article 81-6 of Framework Act on National Taxes

Suwon District Court 2015Guhap69493 Revocation of Disposition of Tax Investigation Decision

00Fent limited partnership company

OO Head of the tax office

2016.05.26

2016.07

1. The plaintiff's claim is dismissed.

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

Cheong-gu Office

The defendant's disposition of tax investigation decision made against the plaintiff on September 22, 2014 shall be revoked.

1. Details of the disposition;

A. The Plaintiff Company was established on December 2, 1981, and thereafter from that time, the Plaintiff Company is a limited partnership company, a general partner Anam, SP and limited partner DD paths, and a partner Anam is a representative member.

B. Gging was an employee who had been working for the Plaintiff Company for about ten (10) years, and around September 2014, submitted to the Defendant documents stating “207-2007-2012 gas purchase volume, sales volume and surplus amount, and content in the present status of surplus amount” (hereinafter “information of this case”) and presented information on the Plaintiff Company’s tax evasion.

C. On the basis of the instant information data, etc., the Defendant deemed that there was a suspicion that the Plaintiff Company had omitted a report on sales by adjusting the reported sales amount from 2009 to 2013 in comparison with the actual sales amount, and on September 22, 2014, pursuant to Article 81-6(3) of the Framework Act on National Taxes, the Defendant selected the Plaintiff Company as a person subject to investigation and notified the Plaintiff Company thereof. The said notice was served on the Plaintiff Company on September 26, 2014.

Tax items subject to investigation: Integrated Survey of Corporate Business Entities (Corporate Tax, Value-Added Tax, Source Tax, etc.)

The investigation period: January 1, 2009 to December 31, 2013

The investigation period: from September 24, 2014 to October 31, 2014

The reason for investigation: After reviewing the details of the report of the your corporation, it has been analyzed that there is any omission of the amount of revenue, and it has been selected as a person subject to investigation to verify the propriety of the report (Article 81-6(3)

D. On November 20, 2014, Plaintiff Company filed a petition for a trial with the Tax Tribunal. However, on August 27, 2015, the Tax Tribunal rendered a decision of rejection on the ground that the decision of rejection cannot be deemed a disposition subject to a request for a trial, and the written decision was served on the Plaintiff Company on August 31, 2015.

[Ground of recognition] Facts without dispute, Gap evidence 5, Gap evidence 6-1, 2, Gap evidence 18-1, Eul evidence 2, the purport of the whole pleadings

2. Judgment on the defendant's main defense

The defendant does not regard a decision on tax investigation as an administrative disposition subject to administrative litigation, and thus, the lawsuit of this case seeking its revocation is unlawful, and this safety defense is asserted.

In a case where a tax authority’s right to inquiry and investigation for a disposition is made, taxpayers are legally obligated to answer questions for tax officials to collect taxation data and to undergo an inspection. A tax investigation should be conducted within the minimum extent necessary to ensure appropriate and fair taxation. Moreover, re-audit for the same tax item and taxable period is not only seriously infringed upon taxpayers’ freedom of business and rights and interests, but also is at the risk of arbitrary tax investigation by the tax authority. Thus, there is a need to be prohibited except for exceptional cases that are considerably contrary to the principle of fair taxation. Considering the above, a tax investigation decision can be resolved early by dispute over a decision on tax investigation rather than allowing taxpayers to appeal against or contest only the taxation disposition after the completion of the investigation (see, e.g., Supreme Court Decision 209Du23617, 2364, Mar. 10, 2011). As such, the decision on tax investigation is an administrative action following the exercise of public authority having a direct influence on taxpayers’ rights and obligations and is subject to appeal litigation (see, e.g., Supreme Court Decision 2009Du2364, etc.

The defendant's main defense of safety is not an administrative disposition subject to administrative litigation.

3. Whether the disposition is lawful;

A. The plaintiff company's assertion

(i) argument that it does not meet the requirement for the selection of persons subject to occasional tax audits;

The Defendant alleged that it made a decision on tax investigation with respect to the Plaintiff Company (hereinafter referred to as the “disposition of this case”) pursuant to Article 81-6(3)3 and 4 of the former Framework Act on National Taxes (amended by Act No. 1352, Dec. 15, 2015; hereinafter the same). However, the information of this case is inconsistent with the daily records of the recorded gas sales and monthly records, and is inconsistent with the amount of gas purchases issued by Aff, a supplier of the recorded gas, and it is not impossible to record the amount of gas sales by reporting the meter of the tax invoice in which gas was injected every day for seven years, and the recorded ratio of gas surplus is not consistent with the rules of experience and nature. In light of the current status of transactions issuing cash receipts and tax invoices in the event of cash sales, and the scale of monthly cash sales by gas charging officials within the jurisdiction, and in view of the principles of credibility of the pertinent provisional disposition of the tax Tribunal and the principle of non-prosecution disposition with respect to Gap’s 201.

Therefore, since the information of this case was easily known that it was false information about tax evasion, the disposition of this case based on the information of this case does not fall under "where specific information about tax evasion has been reported to a taxpayer," or "where there is clear evidence to acknowledge a suspicion of omission or error in the details of the report," etc., and thus, it is unlawful.

2) The allegation that procedural error exists in the process of the tax investigation

In the instant disposition, the tax investigation period was from September 24, 2014 to October 31, 2014. However, the Defendant, on October 29, 2014, notified the suspension of tax investigation solely on the ground that other grounds arise without disclosing specific grounds for suspension prescribed in Article 81-8(4) of the Framework Act on National Taxes and Article 63-10 of the Enforcement Decree of the same Act. After that, the Defendant, on November 27, 2014, notified the suspension of tax investigation for the remaining period of November 27, 2014 to resume the tax investigation for the period from November 27, 2014 to December 1, 2014, the instant tax investigation was concluded as of December 1, 2014. Nevertheless, the Defendant suspended the tax investigation for the period from December 27, 2014 to 35, without disclosing specific grounds or legal grounds for suspension to 2014 to 4.25.18.

On December 2, 2014, the Defendant submitted a notice of suspension of tax investigation to the court on December 4, 2014, without the same content as the notice of suspension of tax investigation, which shows the illegality of arbitrary and administrative convenience tax investigation. In addition, the Defendant’s tax investigation following the instant disposition is contrary to Article 81-4 of the Framework Act on National Taxes which prohibits abuse of the right to tax investigation, such as revolving the Plaintiff company, who is a person subject to tax investigation, based on the right to close the tax investigation, and is contrary to Article 81-14(1) of the Framework Act on National Taxes which provides for provision of minimum information necessary for the taxpayers’ exercise of their rights, and thus, it is unlawful tax investigation that the Plaintiff company was subject to tax investigation without obtaining the minimum information.

B. Relevant statutes

It is as shown in the attached Form.

C. Determination

1) As a matter of principle, the Defendant bears the burden of proving that a taxation disposition has been lawful with respect to the facts that meet the requirements for selecting persons subject to occasional tax investigations, including the grounds for taxation and the amount of tax base. As such, the Defendant also bears the burden of proving that a tax investigation has commenced lawfully. In addition, a tax investigation refers to questioning to determine or correct the tax base and amount of national tax or inspecting, investigating, or ordering the submission of the relevant account books, documents or other articles (Article 81-2(2)1 of the Framework Act on National Taxes). According to Article 81-3 of the Framework Act on National Taxes, a tax official shall presume that a taxpayer is sincere and a taxpayer’s return, etc. submitted by the taxpayer is true, but in cases falling under any of the subparagraphs of Article 81-6(3) of the Framework Act on National Taxes, a tax official shall specify the grounds for excluding the presumption of loyalty to the taxpayer and commencing occasional tax investigations. Article 81-6(3)3 of the same Act provides that “Where specific information on a taxpayer’s tax evasion is reported with a taxpayer, 4”.

Meanwhile, Article 81-4(2) of the Framework Act on National Taxes clearly states the same tax item and the same taxable period as an exception, and it is reasonable to strictly limit and interpret cases where re-audit is allowed rather than the requirements subject to the aforementioned occasional tax investigation. In light of the regulatory system, “where there is evident data to acknowledge a suspicion of tax evasion” under Article 81-4(2)1 of the same Act, the term “where there is clear data to acknowledge a suspicion of tax evasion” should be strictly limited to cases where a considerable probability of the occurrence of tax evasion is recognized by data supporting objectivity and rationality. Therefore, unless the objectivity and rationality are supported, it is difficult to see that the mere fact that the report on tax evasion is specific (see Supreme Court Decision 2008Du10461, Dec. 23, 2010).

B) According to the facts of this case, Gap 2, Gap 3, 10 through 12, and 22 evidence (if there are serial numbers, each number; hereinafter the same shall apply) it is acknowledged that the GGG is highly likely to know about the embezzlement, etc. of company funds if it is not 46 million won or more while presenting the information of this case to AAnam and HHIIII, around February 11, 2014, it seems that there was a significant difference between 10,000 won and the KIIF's imposition of a fine on August 14, 2014 (No. 2014Da52550, Jun. 14, 2014) and the KIF's imposition of a fine of KRW 100,000,000,000,000,000 won, which were declared to be known to the court (No. 201,000,000 won).

Meanwhile, according to the facts that there is no dispute, Gap's evidence Nos. 1, 4 and 6, Eul evidence Nos. 1 and 2, and the following circumstances, i.e., seven-year period from Jan. 1, 2004 to Feb. 21, 2014, it appears that the plaintiff company has been working for the plaintiff company for about ten years and carried out the operation and safety management business of gas charging stations. (2) The information No. 9 of this case is hard to find that the plaintiff company's daily information No. 207 from Feb. 2007 during which the gG materials were working for the plaintiff company, including gas purchase volume, stock ratio, surplus quantity and surplus ratio, change in the unit price of gas workers, corporate tax rate or corporate tax rate, the return No. 1 of this case's information No. 7777, Dec. 3, 2007, and its detailed information No. 3 of this case's information No.

2) Determination as to the assertion that procedural errors exist in the process of tax investigation

The procedural defect, such as the illegality of the suspension and resumption of the tax investigation alleged by the Plaintiff Company, illegality of reinvestigation after the end of the tax investigation period, abuse of the authority to conduct the tax investigation in the process of the tax investigation, and failure to provide information, by itself, can not be viewed as a defect in the instant disposition itself, which constitutes a decision of tax investigation with the purport to select the Plaintiff Company as a person subject to occasional tax investigation and commence the tax investigation after the disposition of this case, regardless of whether it can be seen as a defect in the tax investigation process after the disposition of this case and subsequent taxation. Therefore, this part of the Plaintiff Company’

4. Conclusion

Thus, the plaintiff company's claim of this case is dismissed for reasons.