One of the serious and underestimated by organizations risks arising during control measures of tax authorities or inspections of law enforcement agencies lies in the so-called "humanfactor".
Testimonies of company employees often become evidence that has a significant impact on the amount of additional tax charges. In this case negative consequences may have testimonies of employees who resigned with mutual claims, as well as at their own volition. The testimony of the current personnel, especially the management level, is of great importance.
Inspection of the organization by law enforcement agencies
Law enforcement and tax authorities have the resources to determine the period of employment of an individual and his/her position in the organization of interest. Also, the controlling authorities can easily determine whether the employee received income during the audited period in another organization, from other sources, worked part-time in affiliated companies, etc.
If at the time of the audit the employee is no longer engaged in labor activity in the organization, but during the period of interest was on the staff, the law enforcement and tax authorities have the right to summon him to their office for questioning or interrogation.
As part of the audit, law enforcement agencies have the right to send a notice to appear for explanations to all persons who, in the opinion of law enforcement agencies, can clarify the issues of interest to them. Basically, the inspectors are interested in those employees who signed documents, had management positions, and may have influenced certain parts of the business.
After obtaining explanations from executives and clarifying the structure of the business, law enforcement agencies begin to collect explanations from rank-and-file employees in order to form an evidentiary base.
As a rule, ordinary employees, in order to avoid responsibility, do not confirm or even deny the evidence previously given by the management on certain aspects of the organization's activities. This circumstance is subsequently interpreted by law enforcement officials as a contradiction in the testimony of witnesses and, with a high degree of probability, may lead to unfavorable consequences for the organization.
Peculiarities of work of tax authorities
In the work of tax authorities in carrying out tax control measures, there is a different trend. The tax inspector begins to summon first rank-and-file employees and those who are no longer employed.
This approach is due to the fact that after analyzing the information obtained through the software system ASK VAT-2, the tax inspector already has a list of indirect evidence of certain violations. In other words, the tax authorities need direct evidence of the absence of relations with a particular counterparty (testimony), and ordinary employees are often not aware of all the business processes in an organization, as a result of which they give, as a rule, incorrect and compromising evidence.
Separately, employees who were dismissed with a conflict should be noted: these individuals are initially unfriendly and, unlike other dismissed employees, who may report the call to their previous employer, on the contrary, are more likely to conceal this fact and provide the necessary evidence to the tax authorities during the questioning at the inspection.
In order to minimize the risks associated with questioning employees, it is worth paying attention to the following:
- confidential information should remain confidential: the fewer persons are privy to the details of the organization-the better;
- do not leave your work computer unattended and log out of all programs, including corporate email, when you take a break;
- do not use any devices in the workplace other than those on the organization's balance sheet;
- It is necessary to regularly improve the legal literacy of employees in the context of the activities of law enforcement and tax authorities (these trainings are advisable to conduct under the guidance of lawyers practicing in these areas);
- it is reasonable to conduct training and control work with employees in order to simulate their behavior during control activities carried out by law enforcement and tax authorities;
- It is important to convey to each employee the information about the need to timely notify the management when receiving a summons for questioning;
- It is necessary to develop internal documentation, ensuring the safety of information and the prohibition of its transfer upon termination of an employee;
- It is also critical to maintain a positive relationship with all personnel, regardless of the position each individual employee holds.
Tax Compliance attorneys have years of experience in disputes with tax and law enforcement agencies and are prepared to share with your employees an effective strategy to pass interviews and interrogations with minimal risk to beneficiaries and the business as a whole.