Receiving a tax reassessment proposal (proposition de rectification) means that the tax authorities are setting out to you the grounds for, and the amount planned for, your tax adjustment (redressement fiscal). This letter allows you to know precisely the errors or failures of which you are accused.
This notification represents the final stage of the tax reassessment. It generally follows a desk audit (contrôle sur pièces), an audit of accounts (vérification de comptabilité) or an in-depth examination of personal tax situation (examen contradictoire de situation fiscale personnelle).
You must pay close attention to this letter, as it states the type of procedure carried out, which may be adversarial (contradictoire) or ex officio (d'office). It also indicates which type of tax audit was carried out and mentions the means of defence available to you, in particular the right to be assisted by an adviser of your choice, such as a tax lawyer for example.
Checking the validity of the adversarial reassessment proposal
Before examining the proposal itself, you must check the following points to make sure that it complies with the regulations (your tax lawyer can help you with this):
• The proposal must be set within a legal framework: reference to the articles of the French General Tax Code (Code général des impôts, CGI) is mandatory, whereas any case law relied upon is not a mandatory reference.
• The procedure sets out in detail the facts and the elements on the basis of which this adjustment was decided.
• The document received states the new net taxable income following this reassessment. The additional tax and the penalties applied are clearly notified.
• The proposal states that every taxpayer subject to an adjustment procedure may be assisted by an adviser of their choice.
If any of these elements is missing, the procedure may, depending on the circumstances, be tainted by irregularity. This check is therefore important.
How to respond to a tax reassessment proposal?
While receiving this official document can be unsettling, you should know that you have 30 days to respond to it. During this period, it will therefore be possible to gather all the elements that will enable an appropriate response. An extension may even be granted, bringing the period to 60 days.
You may take advantage of this period to meet the tax inspector. This meeting will allow you to discuss the anomalies or grey areas in your file. If you have the right arguments, the procedure may be closed because you will have succeeded in convincing the tax officer.
Otherwise, you will have to decide what response to give to this tax reassessment proposal.
You accept the tax reassessment proposal
If you have indeed made an error or omission, it may in principle be advisable to accept so as not to aggravate the situation. A refusal could indeed lead to the procedure being pursued, which would be pointless. It is therefore preferable to save time and money by acknowledging your error and asking the tax authorities for leniency. In such a case, they could be accommodating and reduce the penalties if you request a waiver of the surcharges (remise gracieuse des majorations).
Following this acceptance, you will receive a new tax notice containing the reassessment details and the new amount to be paid.
You do not respond within the 30-day period (which may be extended to 60 days at your request)
You should know that a failure by the taxpayer to respond to a tax reassessment proposal within the time limit set is considered an acceptance. Measures will therefore be taken to apply the necessary changes. The penalties provided for by law will also be calculated.
You submit observations to the tax authorities
You are fully entitled to state that you disagree with the tax reassessment proposal. To defend yourself, you may choose to be assisted by an adviser of your choice, such as a tax lawyer, who will tell you the procedure to follow. It is indeed essential to gather evidence proving the facts as well as legal elements on which to rely. A tax lawyer will be able to find the statutes and case law to use in order to defend you.
Your reasoned response will lead to a thorough examination by the tax authorities. An obligation to reply is indeed provided for by law. This document bears the heading "Responses to the taxpayer's observations (Réponses aux observations du contribuable)". It must also be based on statutory provisions and on evidence and concrete facts.
Available remedies
You should also know that remedies exist following receipt of a reassessment procedure. You can use them to defend yourself, suspend or cancel the procedure.
Hierarchical appeal (recours hiérarchique)
When you disagree with a decision of a tax officer, the hierarchical appeal allows you to refer the matter to their line superior. Their name and contact details appear on the tax adjustment notification. The superior can easily be approached, since their details are also provided for this purpose.
This appeal makes it possible to open a dialogue but does not mean that the tax adjustment will be dropped. It is above all a new opportunity to put forward arguments in defence of your position.
Referral to the departmental contact officer (interlocuteur départemental)
You can also easily refer the matter to this officer, since their contact details are in principle indicated on the letter received from the tax authorities. This will allow a fresh opinion on your situation and, where appropriate, help to unblock your situation with the tax authorities.
Referral to the departmental commission (commission départementale)
This referral will result in a freeze on the collection of the sums claimed while the file is examined. It can therefore be worthwhile if you dispute the elements put forward by the tax officer.
Made up of representatives of the tax authorities as well as taxpayers, this commission is sometimes a favourable setting for opening a discussion, in particular through your tax lawyer, who will be able to represent you effectively. After hearing your arguments, a favourable or unfavourable opinion will be given.
Please note that this commission only has jurisdiction in certain specific tax matters.
Request for a waiver of surcharges
In exceptional cases, this route may be used. To be valid, the request must be made to the tax office that issued the tax reassessment proposal.
You should, however, know that this remedy is straightforward only where the sum due is less than €200,000. Where it exceeds this ceiling, the Committee on Tax, Customs and Exchange Litigation (comité du contentieux fiscal, douanier et des changes, CCFDC) will be referred to by the tax authorities themselves. The Minister for the Budget then rules on your request after obtaining the opinion of this committee.
Our tax law firm can assist you.
