2016Guhap54282 Suspension of certified tax accountant's duties, etc.

A

Minister of Strategy and Finance

Seoul Regional Tax Office

July 13, 2016

August 26, 2016

1. The plaintiff's claim is dismissed.

2. The costs of the lawsuit shall be borne by the Plaintiff, including the costs incurred by participation.

The defendant's suspension from office against the plaintiff on January 28, 2016 shall be revoked one year of suspension from office and 7.5 million won of fine for negligence.

1. Details of the disposition;

A. Since 2010, the Plaintiff, a certified tax accountant, operates Jongno in Jongno-gu Seoul Metropolitan Government (hereinafter referred to as “instant tax accountant office”).

B. From around 2011, the Plaintiff has been performing the duty of tax bookkeeping and reporting agency for reporting global income tax of artist D (trade name: E and F).

C. On November 14, 2014, the director of the Seoul Regional Tax Office requested disciplinary action against the Plaintiff on the ground that “the Plaintiff appropriated the processed expenses without any evidence of taxpayer D for the year 2013, and subsequently confirmed the amount of global income of KRW 704,649,00 (tax amount of KRW 268,336,00) with false entry and false verification as to the bona fide return.”

D. On January 22, 2016, the Certified Tax Accountants Disciplinary Committee decided to take a disciplinary measure against the Plaintiff pursuant to Article 17 of the Certified Tax Accountant Act on the ground that the Plaintiff’s return of global income tax for the year 2013, included processing expenses of KRW 704,649,00, and omitted tax amount of KRW 268,336,00, and that the Plaintiff violated the duty of good faith provided for in Article 12 of the Certified Tax Accountant Act by falsely confirming the bona fide return under the Income Tax Act. The Defendant, according to the above decision, was subject to the suspension of duties for the Plaintiff on January 28, 2016 (from March 1, 2016 to February 28, 2017) and the disciplinary measure of KRW 7,500,000,000,000,000,000,000,000 for false bookkeeping (hereinafter “instant disposition”).

[Reasons for Recognition] Facts without dispute, Gap evidence 1, Eul evidence 1 and 7, and the purport of the whole pleadings

A. The plaintiff's assertion

1) The Defendant issued the instant disposition on the ground that the Plaintiff had made a false verification as to the bona fide return, but the said false verification was received by the staff G of the instant tax office at the request of the Plaintiff for the excessive appropriation of expenses from D’s mother’s mother on or around June 2014, and there was no intention of false verification to the Plaintiff who was not aware of the said fact due to the operation of the bridge and rehabilitation treatment at the time. Therefore, the instant disciplinary cause is not recognized.

2) Even if the grounds for disciplinary action exist, the instant disposition is unlawful as it deviates from and abused the Defendant’s discretion, taking into account the following: (a) the Defendant imposed suspension of qualification and a fine for negligence concurrently on the ground of false verification; (b) the Plaintiff was aware of the Plaintiff’s failure to recognize the aforementioned false verification act of G; and (c) reported modification on September 22, 2014, after the Plaintiff became aware of it; and (d) reported modification.

B. Relevant provisions

It is as shown in the attached Form.

(c) Markets:

1) Whether grounds for disciplinary action exist

According to the Certified Tax Accountant Act, a certified tax accountant’s mission is to contribute to protecting taxpayers’ rights and interests as a tax specialist with public nature and faithfully performing his/her duty to pay taxes (Article 1-2); a tax accountant shall perform his/her duty of making a tax return by delegation from taxpayers, etc.; a person who prepares books by proxy for filing a tax return; and a person who makes a bona fide return pursuant to the Income Tax Act (Article 2 subparag. 3 and 8); and a person who shall maintain dignity by faithfully performing his/her duty and shall not intentionally conceal the truth or make a false statement (Article 12(1) and (2). As above, the Certified Tax Accountant Act provides that a certified tax accountant violates his/her duty of good faith in addition to actively making a false statement; the Regulations on Handling Affairs of Tax Agent Services provide that a certified tax accountant violates his/her duty of good faith pursuant to Article 70-2 of the Income Tax Act, and that a certified tax accountant has to verify whether he/she has faithfully fulfilled his/her duty to pay taxes or has falsely verified his/her duty to pay taxes.

According to the evidence Nos. 5, 6, and 7, the Plaintiff stated that “3...” of the “certificate of Faithful return for 2013 years,” which was written under the Plaintiff’s name, “3....” as of Jun. 29, 2014, it is difficult to verify the amount of income, such as the keeping of the business entity subject to verification of Faithful return, the amount of income calculated according to the books and documentary evidence, and the inclusion of necessary expenses, in good faith pursuant to Article 70-2(1) of the Income Tax Act.” On Oct. 13, 2014, the Seoul Regional Tax Office: “D” as an artist, and it was not recognized as expenses under the tax law even if it was so collected at the request of the Plaintiff for the reduction of the amount of tax on D’s account; however, it is difficult to acknowledge that the Plaintiff’s false entry was made within 140 years of global income tax without the Plaintiff’s request for verification of the amount of tax on D’s global income tax base.

2) Whether the discretion is deviates or abused

In light of the following circumstances, in addition to the purport of the entire arguments as seen earlier, the instant disposition is not deemed a disposition that deviates from the scope of discretion or abused discretion due to excessive excessive restriction on the Plaintiff.

A) The bona fide return verification system as stipulated in Article 70-2 of the Income Tax Act is introduced to the purpose of preventing a bona fide return and supplementing the limitations of the tax administration capacity by inducing a self-employed person to verify the appropriateness of accounting and tax processing from a tax specialist before filing a income tax return, thereby inducing a bona fide return.

B) Although the Plaintiff’s mission is a tax specialist with public nature and a tax accountant with a view to protecting the rights and interests of taxpayers and contributing to faithfully performing tax liability, the Plaintiff is required to have a high level of business sincerity, the Plaintiff breached its duty of good faith by appropriating processing expenses without evidence upon request from D by D. The Plaintiff’s violation of the Plaintiff’s duty of good faith may not be deemed to be less than 7.46 billion won when verifying the false verification amount when the Plaintiff verified the global income tax return in 2013.

C) Article 2(1)3 (b) of the Certified Tax Accountant Disciplinary Disciplinary Punishment Act provides that the amount of tax evasion incurred due to false entry is at least KRW 50 million, suspension of duties for not less than two months but not more than one year, or imposition of a fine not less than KRW 10 million, but not more than KRW 500,000 (Article 2(1)3 (b)), and that where the amount verified faithfully or falsely is at least KRW 500,000,00,000, is determined on the basis of the determination thereof, suspension of duties for not less than one year but not more than two years (Article 2(1)5 (a)) shall be applied concurrently (Article 6 subparag. 4). The Plaintiff’s misconduct constitutes suspension of duties and a fine for negligence if each violation conflicts with a fine for negligence for negligence (Article 6 subparag. 4). The Defendant concurrently imposed a fine for negligence on the basis of the Plaintiff’s omission tax amount and the amount of false verification.

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.

The judges of the presiding judge;

Support for Judges

Judges Kim Jae-nam

1) Although the date of disposition is written as “ January 27, 2016,” the warden appears to be a clerical error in light of the written notice of a disciplinary decision (Evidence A).

A person shall be appointed.

A person shall be appointed.