When presenting the request for computer processing by a verification service, the company must be able to formalize its choice for one of the three processing methods with full knowledge of the facts. For this, it is still necessary to give him a minimum of time for reflection to formalize his choice. However, recent judgments rule out the reason of lack of reasonable time as tainting the review procedure with irregularity.
Reminder of the legal framework
Article L. 47 A II of the Book of Tax Procedures (hereinafter LPF) governs the implementation of the procedure for requesting computer processing in the context of a tax audit. As such, when a verification service plans to carry out such processing, the company must choose between one of the following three options for carrying out the investigations desired by the administration agents:
- the verification, by the administration, of the company’s equipment (paragraph a);
- the performance by the company of all or part of the computer processing (paragraph b);
- transmission to the verifier of copies of the documents, data and processing subject to the right of control (paragraph c).
The law provides that the taxpayer formalizes in writing his choice among these options but does not give any other indication on the terms of this option, in particular with regard to the period he has to make his decision. The doctrine of the tax administration clarifies that ” This choice must be made in writing, within the deadlines set by the administration. but does not provide any indication of these deadlines, which in practice leaves the initiative to the auditor department to set them on a case-by-case basis for each control.
However, the administration also indicates that: “The purpose of this written formalization of the nature of the investigations envisaged by the administration is to give the taxpayer precise information allowing him to make his choice on the methods of treatment in full knowledge of the facts. »[1]
By this last precision, the administration seems to us to admit, certainly implicitly but necessarily, that the company must be able to formalize its choice in an “informed” way, which generally requires, taking into account the organization of the companies, a period of reflection allowing him to understand the extent, the complexity and above all the feasibility of the processing to be implemented.
Feedback on the practices implemented by the auditors
With regard to the tax audits of large companies which come under the National and International Audit Department (DVNI), the procedure for requesting computer processing is carried out by specialized auditors from the computerized accounting audit brigades (BVCI) who, taking into account technical and organizational constraints of the companies, formalize in writing, in the processing request, that the taxpayer has a period generally between 5 and 7 days to formalize his choice for one of the three processing methods.
While a cooling-off period is also generally granted by the other control services (regional or departmental tax control departments) in the context of due diligence checks in companies under their jurisdiction, it is clear that this is not the case. not always mentioned in the processing request letter.
It is not uncommon to see companies formulating their option on the same day of receipt of the mail requesting computer processing, or even when it is delivered in the presence of the auditor department on the premises of the company. ‘business. Most often, moreover, the company is not informed that it has a deadline to make its choice, either because the letter requesting computer processing does not mention any particular deadline, or because the request for an option is formulated orally by the auditor service, during its intervention on the premises of the company.
Recent judgments rule out the failure to grant a time limit as tainting the procedure with irregularity
By a decision of March 15, 2019 [2], the Council of State ruled that the taxpayer cannot take advantage of the 30-day period provided for in Article L 11 of the LPF to respond to a request for computer processing, this constituting “an element of the dialogue” to which gives rise to the audit of accounts and not a request for information, clarification or justification within the meaning of these provisions. The High Court also considered in this case that the Court of Appeal had been able to make a sovereign assessment of the facts by judging that the company had benefited from sufficient time (7 days in the particular case) to exercise its choice from the delivery of the mail implementing the IT processing on which was mentioned the response time to be provided.
More recently, the Administrative Court of Lyon, for its part, ruled that in the absence of a legal provision concerning a possible deadline for formulating the option, a processing request procedure cannot be vitiated by irregularity on the grounds that the company has formalized an option the same day the mail is delivered.[3]
But a decision of the administrative court of appeal of Paris seems, as for him, to recognize the requirement of a sufficient time. Thus in this case, the company’s representative had formalized his choice on the same day as the presentation of the treatment request. The court states that: It does not follow from the investigation that he asked for a delay which was refused or that the auditor deprived him of sufficient time to formulate his answer. The plea alleging that he was not given sufficient time to choose between the options offered can therefore only be dismissed.. »[4]
However, did the company representative know that he could have a period of reflection to formalize his option? How to formulate a choice for one of the three processing methods in an “informed” manner in the absence of a reasonable period of time to establish contact with a service provider, for example, in order to know whether the processing can be carried out in full (option b of article L 47 A II of the LPF)?
What attitude to adopt in such situations?
Faced with this type of procedure, which can have serious consequences in the event of breaches (failure to formulate one of the three options is considered as a ground for opposition to the tax audit and may lead to the application of the automatic assessment (article L 74 of the LPF), the consecutive increases / reminders of the implementation of this can be accompanied by a fine corresponding to 100% of the increased rights charged to the company), and in view of recent case law decisions, it can only be recommended to formally request a deadline from the auditor service to make its choice.
It should also be remembered that the law does not preclude the company from changing its option (because the one chosen initially, sometimes in haste, may ultimately prove unsuited to the organizational and/or technical constraints of company) as long as the period for carrying out the processing has not expired.
Finally, the use, from the start of the procedure, of a specialist in the matter often proves useful. It should be remembered that the decision of the Council of State mentioned above 2, specifies that the letter implementing computer processing is “a dialogue element “, which implies that it falls fully within the framework of the oral and contradictory debate and must give rise to an exchange, including
[1] §160 and §120 BOI CF-IOR-60-40-30 in its version as of January 13, 2021.
[2] Decision of the Council of State of March 15, 2019 n° 414580.
4 Administrative Court of Appeal of Paris, September 22, 2021, 20PA00654 “Driving school Marko”.
Article published in Option Finance on 03/21/2022
