Cho Jae-2017- Daejeon-3463 ( November 27, 2017)

Whether it is deemed reported by the deadline for division of the spouse's inherited property

In order to obtain a spouse's inheritance deduction, it is difficult to deem that the report on non-division of the spouse's inherited property by telephone has to be submitted with evidentiary documents concerning inevitable reasons by the deadline for division of inherited property, and it is difficult to say that the case is being carried out.

Articles 19 and 67 of the Inheritance and Gift Tax Act; Article 17 of the Enforcement Decree of the Inheritance and Gift Tax Act; Article 24 of the Enforcement Rule of the Inheritance and Gift Tax Act

Daejeon District Court-2018-Gu Partnership-101061 Revocation of Disposition of Imposing Inheritance Tax

AA

Daejeon Head of the District Tax Office

oly, 2019.14

2019.04.04

1. The plaintiff's claim is dismissed.

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

Cheong-gu Office

Of the imposition of inheritance tax of KRW 532,463,450 on January 5, 2017, the part of KRW 146,161,368 arising from the spouse deduction shall be revoked.

1. Details of the disposition;

A. AAA (hereinafter referred to as “the deceased”) died on October 27, 2013, and the Plaintiff and CCC, DD, and EE inherited the rights and obligations of the deceased’s property.

B. On December 30, 2013, BB filed a claim against the Plaintiff, CCC, DD, and EE for the determination of the contributory portion and the division of inherited property (hereinafter referred to as “related case”).

C. On April 30, 2014, GGG on whose behalf the Plaintiff filed a return of inheritance tax, filed a return of inheritance tax base with the Defendant with the amount of KRW 2,518,822,270, the amount of inheritance deduction, the amount of inheritance deduction, KRW 1,143,328,854 (spouse’s inheritance deduction amount), tax base 1,375,493,416, and the amount of tax payable 351,17,630.

D. On May 2014, KK serving in the WW Information Service affiliated with the WW National Tax Service found that, in the process of computerizing the inheritance tax base return submitted by the Plaintiff, the liability, public charges, funeral expenses, and the specifications of inheritance deduction, stated as required documents in the said report, were omitted, and requested that GG supplement them. GG sent KK the “liability, public charges, funeral expenses, and the specifications of inheritance deduction” by facsimile.

E. On September 15, 2014, the Defendant examined the details of the inheritance tax return and DB data. As such, the Defendant prepared a written review of the assessment of the inheritance tax taxation data stating that, inasmuch as there was a suspicion of prior donation (influence of inheritance tax), it is reasonable to verify the appropriateness of the value of inherited property and prior donation property, etc. through an inspection (inspection) and then determine the inheritance tax. Since then, the Defendant notified the Plaintiff that he/she would be subject to an investigation of the inheritance tax, and the Plaintiff submitted an application for an investigation of the inheritance tax to the Defendant on November 24, 2014.

F. On January 30, 2015, the Defendant commenced an inheritance tax investigation by April 3, 2015, and suspended the said investigation on the ground that the relevant case was pending on March 25, 2015.

G. On April 18, 2016, the appellate court rendered a final judgment on the relevant case (Seoul High Court 2015B368) (Seoul High Court 2015B368), and the Plaintiff re-appealed against this, but was dismissed on July 8, 2016 (Supreme Court 2016S534).

H. On August 29, 2016, the Defendant resumed the inheritance tax investigation, and on September 2016, EE sent e-mail a written decision to MM in charge of the Plaintiff’s inheritance business under the jurisdiction of the Defendant’s Property Tax Division.

I. On January 5, 2017, the Defendant: (a) determined the inheritance tax amount of KRW 3,577,423,230; (b) the inheritance deduction amount of KRW 1,223,410,864 (spouse’s inheritance deduction amount of KRW 680,082,010); (c) tax base of KRW 2,354,012,366; and (d) determined the inheritance tax as KRW 742,585,210; and (b) determined and notified the Plaintiff of KRW 532,463,450, which calculated the total final tax amount of KRW 903,131,440, which calculated the total final tax amount of KRW 370,67,98,00 (hereinafter referred to as “final disposition”).

(j) On November 27, 2017, the Plaintiff filed an appeal with the Tax Tribunal on the subject of the initial disposition. On November 27, 2017, the first disposition rendered a decision that the tax base and tax amount calculated by subtracting KRW 19,394,00, such as hospital expenses, nursing expenses, attorney fees, and KRW 200,000,000 (in case of withdrawal within two years from the commencement date of inheritance) from the taxable value of inherited property, and that the remainder of the appeal is dismissed. The Defendant revoked the disposition of imposition of KRW 119,336,53 of the inheritance tax imposed upon the Plaintiff on December 7, 2017 (hereinafter “instant disposition”).

[Ground of recognition] The facts without dispute, Gap evidence Nos. 1 through 7, Eul evidence Nos. 1, 2, 4 through 8 (including branch numbers), witness GG testimony, the purport of the whole pleadings

2. Relevant statutes;

The entries in the attached Table-related statutes are as follows.

3. Whether the instant disposition is lawful

A. Summary of the plaintiff's assertion

1) The method of reporting is limited to the submission of a report by a private person to an administrative agency. The proviso of Article 19(3) of the Inheritance Tax and Gift Tax Act does not explicitly stipulate the form of reporting, and the subordinate statute does not delegate it. Article 17(3) of the Enforcement Decree of the same Act and Article 24 subparag. 3 of the Enforcement Rule stipulate the form of reporting without any basis for delegation. This is merely a provision of one form of reporting.

2) On May 2014, the Plaintiff revealed that the pertinent case was under way against the Defendant’s employees through GG, and thus, the heir could not determine the ratio of inherited property. This constitutes an inevitable cause reported by the Plaintiff pursuant to the proviso of Article 19(3) of the Inheritance Tax and Gift Tax Act. Therefore, the spouse’s inheritance deduction amount is unlawful since the amount of KRW 915,826,153 multiplied by the statutory inheritance (3/11) of BB’s taxable value of inherited property of the instant disposition of KRW 3,358,029,230, or the disposition of this case determined the amount of the spouse’s deduction amount as KRW 891,91,470, which was recognized to have been reverted to BB BB prior to the commencement of inheritance in the relevant case, is unlawful.

3) Meanwhile, the defendant decided the amount of inheritance deduction by increasing 80,082,010 won from 600 million won reported by the plaintiff, and suspended the investigation of inheritance tax on the plaintiff according to the progress of the related case. Nevertheless, the procedure of imposing inheritance tax was conducted on the plaintiff under the premise that the plaintiff filed a report pursuant to the proviso of Article 19(3) of the Inheritance Tax and Gift Tax Act. Nevertheless, the disposition of this case on the ground that the above report was not made is contradictory to the prior act, and thus, the above disposition violates the principle of good faith and

B. Determination

1) Whether a report is made under the proviso of Article 19(3) of the Inheritance Tax and Gift Tax Act

A) Article 19(1) of the Inheritance Tax and Gift Tax Act provides that an amount actually inherited by a spouse shall be deducted from the taxable value of inherited property. Paragraph (2) applies only where a spouse dividess inherited property by six months from the date following the due date of reporting the tax base of inherited property to the due date of the division of inherited property (hereinafter “the due date of division of inherited property by the spouse”). In this case, the inheritor shall report the division of inherited property to the head of the district tax office having jurisdiction over the place of tax payment by the due date of the division of inherited property. Meanwhile, Article 19(3) of the Inheritance Tax and Gift Tax Act provides that where an inheritor files a report on division of inherited property by six months from the following day of the due date of division (in cases of filing a lawsuit or a petition for adjudication, the due date of filing a lawsuit or a petition for adjudication) to the head of the district tax office having jurisdiction over the place of tax payment by the due date of division of inherited property, such division shall be deemed divided within the due date. In addition, Article 17(2) of the former Enforcement Decree of the Inheritance Tax and Gift Tax Act (amended by Presidential Decree).

B) On the other hand, Article 19 of the Inheritance Tax and Gift Tax Act provides for the requirements of division and report to be met by the heir in order to obtain a spouse’s inheritance deduction. This purpose is to prevent tax avoidance in the part where the heir received the spouse’s inheritance deduction by dividing the inherited property after the spouse’s inheritance deduction and paying the inheritance tax. In addition, Article 19(3) of the Inheritance Tax and Gift Tax Act provides that the time limit for division and report shall be extended in extenuating circumstances where the spouse’s inherited property cannot be divided by the time limit for division of the spouse’s inherited property in the case of the spouse’s inheritance deduction, but the heir shall report inevitable circumstances by the time limit for division. It seems that there is considerable difficulty in confirming the division and division of inherited property by the administrative agency unless the inheritor specifically specifies the reason or provides the materials related thereto. Considering such circumstances, it is reasonable to deem that the report is submitted by the method of submission of the report under the proviso to Article 19(3) of the Inheritance Tax and Gift Tax Act.

C) In the instant case, as seen earlier, one association member's relocation right and one association member's relocation right on October 27, 2013 (six months from the last day of the month in which the date of commencement of inheritance falls) and the period of division of the spouse's inherited property up to October 30, 2014. Therefore, in order for the Plaintiff to obtain the spouse's inheritance deduction on the inherited property by October 30, 2014 pursuant to Article 24 subparagraph 3 of the former Enforcement Rule of the Inheritance Tax and Gift Tax Act, the Plaintiff shall submit the deceased's family relation certificate and documents evidencing the deceased's claim for inheritance recovery, and the Plaintiff's failure to submit the above report to the Defendant by October 30, 2014 does not conflict between the parties. Furthermore, even if the Plaintiff's assertion was made, the Plaintiff reported to the Defendant through GG that it was inevitable for the head of the competent tax office having jurisdiction over the place of tax payment to report the inevitable reason to the Defendant.

2) Whether the principles of good faith, good faith, and nourclature are violated

In full view of the purport of the entire arguments revealed as follows: (a) KK is not an employee belonging to the defendant; (b) there is no evidence to deem that the plaintiff knew of the progress of the relevant case by October 30, 2014, which is the time limit for the division of the spouse’s inherited property; (c) according to a review of inheritance tax data prepared by MMM as of September 15, 2014, the defendant appears to have commenced an investigation of inheritance tax on the plaintiff, regardless of whether the plaintiff’s return was made; and (c) on March 25, 2015, the above investigation was suspended on the ground of the relevant case; (d) the defendant’s report on the completion of the investigation of inheritance tax prepared by the defendant around November 2016, on the premise that there is no inevitable reason for filing a return on the amount of inherited property under the proviso to Article 19(1) of the Inheritance Tax and Gift Tax Act as the spouse’s return on the grounds that it is difficult to view that the defendant made an inevitable reason for filing of inheritance tax deduction within 20808%.

3) Sub-decisions

Therefore, the Plaintiff did not report under the proviso of Article 19(3) of the Inheritance Tax and Gift Tax Act, and thus, BB cannot obtain a deduction of the actual amount inherited from the taxable value of inherited property pursuant to paragraph (1) of the same Article, and the Defendant, despite the deduction of KRW 500 million pursuant to paragraph (4) of the same Article, issued the instant disposition on the premise that the amount of the spouse’s inheritance deduction is KRW 680,082,010. The Plaintiff’s assertion on the premise that the above deduction amount should be increased is rejected

4. Conclusion

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