Tax control is a special type of activity of specialized bodies. The employees of this service are authorized to conduct tax audits, as well as to supervise the financial activities of entities of all forms of ownership.
How is tax control and tax audits performed? What are their goals and what types of actions are there? Consider these points in more detail in the article.
What is tax control?
Control in the field of taxation is recognized as the activity carried out by specially authorized bodies. It is a set of certain measures regarding control over the proper implementation of tax legislation, as well as the identification of violations in this area that can be committed by both legal and private individuals.
In the process of tax control, authorities pursue certain goals and apply various methods of influence on subjects of legal relations. The forms of control are also diverse. Which ones - consider below.
Control objectives
The bodies that carry out control in the field of taxation, always set themselves certain tasks. So, the main task is to detect violations of the law in the field of tax payments, record keeping, etc. In addition, their activity also consists in providing individuals and enterprises with all the conditions that are required for the normal fulfillment of tax obligations.
In the event that during the audit, tax control officers find violations of any degree, they are obliged to prevent them.
In addition to all of the above, control should be aimed at directly contributing to the proper and lawful maintenance of accounting, as well as the provision of reports in the correct and current form.
Object and subjects of control
The bodies that conduct tax control conduct their professional activities in relation to certain objects. The main object in this type of legal relationship is certain illegal actions, and in some cases, inaction, which is carried out by the taxpayers themselves. In addition, tax agents, as well as persons who are directly involved in the collection of taxes and contributions, fall under the group of persons whose actions are considered an object of control.
Who performs supervisory activities? To the bodies exercising tax control, the legislator includes a certain number of services and organizations. On their behalf, activities are carried out by some authorized officials. The group of entities that control in Russia includes financial authorities, tax and customs services, tax and duty collectors, as well as various extrabudgetary organizations that operate within the framework of their specific competence.
About forms of control
If we talk about forms of tax control, it should be understood that this activity can be presented in various forms. All control options are prescribed in legislative acts, as well as in the official job regulations of certain employees of structures that are authorized to engage in this type of activity.
Among the forms of tax control, there are such types of activities as conducting inspections at enterprises or at another place where a person carries out his activities. Among these forms are cases of demanding certain documents to establish specific information necessary for tax authorities. Data checks, inventories and accounting are also certain forms of control that are currently widely used in practice by specialized bodies.
Recently, a new type of tax control has become widely used in the system - monitoring.
We will consider each form of activity mentioned earlier in more detail below.
Checks
Conducting inspections is the most common form and method of tax control that can be carried out at any enterprise. The procedure for conducting inspections is spelled out in a separate regulation, which is mandatory for all employees of controlling departments involved in this type of activity to study.
Current legislation provides for two options for implementing this form of control: desk and field checks. What is their essence?
If we talk about desk audits, they are carried out by authorized inspectors of the tax services by examining the documents that contain reports on the conduct of financial transactions at an individual enterprise or institution. The duration of this form of control should not exceed three months. Its peculiarity lies in the fact that, through a desk audit, information can only be established regarding the collection or type of tax in respect of which the authority received reporting.
If we talk about on-site inspections, then, unlike desk-based inspections, they should be carried out exclusively at the location of the controlled object. As for the object of verification, they can be absolutely all types of payments.
Separately, verification of the data that was provided to services in the framework of accounting and tax accounting can be carried out. Within 10 calendar days, they are required to provide any taxpayer in an appropriate form to the authorized body. Authorized employees of specialized services must declare the requirement to provide this type of data in the manner prescribed by law. As part of such an audit, service employees are required to establish how correctly the accounting records are maintained at the enterprise, and whether the financial report is properly prepared by its employees.
Practice shows that inspections are most often carried out if the authorities conducting control of bona fide taxpayers have some reason to believe that an enterprise, organization or institution hides certain objects of taxation from the service. Also very often this is done as a result of the discovery of the fact of growth of this object, especially if this factor was not reflected in declarations, reports or in other documents.
In addition to these situations, a check can be carried out if the person who is a taxpayer provides in the declaration and in the reports that information that is not comparable with the data on his embezzlement and actual income. In the event that the document in which information regarding the person’s income and expenses was submitted was not submitted to the tax authorities on time or is absent at all, this is also considered a good reason for the audit.
The legislator provides for mandatory field inspection in the event that a legal entity is liquidated or reorganized.
Based on the results of each audit, the authorities that carried it out are required to draw up a document that will fully reflect the course of their actions, as well as violations identified. Documents must be attached to this act, the content of which confirms the existence of an offense. Having considered the results obtained during the control measures, all participants in the commission sent by the authorized body should express their opinion on the degree of violations, as well as the possibilities for their elimination. At this stage, it is also necessary to stipulate the real terms in which the shortcomings will be eliminated. All such decisions may be taken by the authority within a 10-day period and communicated to the other party.
Getting explanations
Another variant of the form of control is the request for explanations by authorized bodies of services regarding certain issues related to the payment of taxes and contributions, accounting, as well as other aspects of financial activities that are carried out at enterprises and organizations of various forms of ownership.
The legislator determines that, within the framework of this form of control, authorities can receive both written and oral explanations, which the taxpayer is required to provide. Regarding the time limit for the clarification, it should be a maximum of 10 days.
Inventory and inspection
Often, experts from the system of control bodies apply such forms as inventory and inspection in practice. Practice shows that the main goal of tax control of this type is to establish the fact that a taxpayer has certain property. Such a form of supervision can be applied only when an on-site inspection is carried out, since it requires the actual presence of an inspector at the location of the object.
As for the inspection, it is carried out in relation to things, structures, documents, as well as the territory related to the subject of inspection.
Upon the fact of the audit, an inventory report must be compiled, in which an indication of a clear reflection of the state of things is required.
Monitoring
As for monitoring, this is a type of additional tax control measures that has been applied relatively recently in the Russian Federation since 2015. It was established that this form can be applied exclusively to large taxpayers and only by their personal application, in which the corresponding desire will be expressed. In parallel with the receipt of the application, permission is required from the authority conducting financial control.
In the process of carrying out actions, special service employees get full access to the databases, which contain all the information regarding a specific taxpayer. As for the duration of the monitoring, it is conducted on an ongoing basis, continuously.
Methods
Tax control and tax audits that are conducted for its purpose are carried out using certain methods. What does this concept mean?
Control methods in the field of taxation is a combination of all possible methods and techniques, using which the tax control authorities are able to carry out their work.
In the process of their activity, representatives of structures have the right to apply general scientific methods, which include visual inspection, economic analysis, and the dialectical approach. In the process of carrying out the work, representatives of the control bodies can use such analysis methods as logical and systemic. Practice shows that in reality specialists very often apply this type of control, such as selective verification of documents.
Practice shows that the concepts of form and method are very closely related. In fact, it is very difficult to separate them.
All the main methods of tax control, which are used in practice by employees of the relevant bodies, are divided into two large groups: main and additional. And those, in turn, into separate subgroups, depending on how this method is implemented in practice. So, we will consider each of these groups in more detail.
Main methods
The main methods of tax control include documentary and actual. Practice shows that both are widely used by specialists.
The essence of documentary methods is that they provide for all kinds of checks regarding the correctness of the compilation and filling of reports, documents, as well as for their reliability. In addition, in the course of such operations, control specialists must establish whether the expenditures were targeted, as well as how reasonable the operations were.
In practice, documentary verification is also expressed in the form of certain arithmetic calculations, as well as control as to whether all financial actions comply with the current law.
One of the main methods of documentary verification is the collection of registers, documents, as well as reports regarding the conduct of financial transactions, the movement of funds within a specific taxpayer. In accordance with the procedure established by the regulations, these documents may also be seized.
As for the second subgroup, which is one of the main methods of conducting tax control by authorized bodies, it consists in establishing the actual correspondence of the availability of certain funds and objects to what is written in the statements. As part of the actual inspections, examinations as well as inventories may be carried out. This category also includes control purchases and all kinds of analyzes of raw materials used in the manufacturing process.
Additional methods
The methods of additional tax control include settlement-analytical and informative operations.
As for informative methods of control, they consist of various requirements, the implementation of requests, as well as the requirement to provide any verbal or written explanations regarding a particular issue related to the conduct of economic activity of an enterprise or institution.
If we talk about the calculation and analytical methods of control, then their spectrum is wider. In particular, this subset of measures includes technical calculations, the provision of logical estimates, control over pricing issues, and economic analysis of the data provided. Often, in order to carry out such control techniques, services are involved in this activity of specialists in specific industries who are professionally versed in the narrow issues of the activity of enterprises of a certain direction.
Types of control
Like the concept of tax control, the types of this activity are also provided for in the legislative sources of the Russian Federation. Modern regulations provide for a fairly large-scale classification of types of control in the field of taxation. Their division occurs depending on what entities carry out activities, with what frequency, planning, what volume of securities is provided for inspection, etc. Let us examine in more detail what types of tax control are divided in the Russian Federation.
Depending on which territory is being inspected, it can be divided into a cameral and an exit one. The difference between these two concepts is that in the first case, all control activity is carried out on the territory of the tax authority itself, and in the second case, within the enterprise in respect of which the verification procedure has been instituted.
Depending on the sources from which information is taken to take action, the checks can be divided into factual and documentary. Their difference lies in the fact that in the first case, the employees of the controlling service draw all the necessary information from documentary sources: reports, acts, estimates, etc. As for the second type, it provides for conducting control actions based on the information provided as a result of the actual inspection of objects of interest, from witness testimonies, inventory results, audits, etc.
If we talk about such a concept as priority, it provides for the division of types of control into primary and repeated. In the notes to the second definition, the legislator indicates that re-control is considered such when all procedures are carried out for the second time in a year on the same taxation issue.
Depending on whether the audit was carried out in accordance with the established plan or if it is spontaneous on a sudden question, it may belong to the group of planned or unscheduled. In the first case, the taxpayer must be notified of the upcoming control functions.
Control measures can also be divided depending on how much documents and information are submitted to the authorities for verification. So, if absolutely all registers and documents classified as primary, left over the last year, are subject to verification, then such verification will look like a continuous one. In some cases, it becomes necessary to check only a certain part of the documentation selected by specific parameters - this type of check is selective.
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As for the sanctions applied to dishonest taxpayers, they consist in imposing fines. The amount of financial costs directly depends on how significant violations were identified during the implementation of tax control measures. In some cases, the legislator is not limited to recovering material assets from the violator. So, if we are talking about acts of a criminal scale, then criminal liability is liable for them.
How can a taxpayer protect his rights?
Practice shows that sometimes authorities in the course of tax control measures make certain mistakes, thereby violating the rights of bona fide payers. In this case, the party whose rights and interests have been infringed has the right to appeal to the court. If it is a question of protecting the rights of an individual who is a private entrepreneur, he should submit his application to the court of first instance, and if the party to the legal relationship is a legal entity, then to the arbitration one. However, according to the latest innovations in the legislation, persons who are registered as private entrepreneurs can protect their interests in court only when they have passed the administrative stage, which involves submitting a complaint addressed to a senior official of the highest tax authority.
As recent legal practice shows, judicial protection of the rights of taxpayers is recognized as more effective. This is due to the fact that the panel of independent judges is engaged in the consideration of the case in this order. In addition, the process of consideration of the issue has a clear legislative regulation, and also, if it is necessary to suspend the consideration of the issue, the parties can submit an application.