In his article in the Financial Director magazine, Alexey Stanchin, Head of Tax Compliance practice area, told how a company's lawyers can build communication with tax inspectors depending on the stage of control.

Familiarization meeting

A familiarization meeting is most often initiated by the tax authority. The most common situation is when you have acquired a company, changed the director and founders. After that, the tax authority summons the taxpayer to give explanations. The purpose is to hold an introductory conversation with top management. In practice, participation in the event of the director is optional, but our experience shows that it is better not to ignore this wish of the inspectors. This strengthens the position of the taxpayer. Separately note that in our experience, such notifications and participation of the director not only does not carry risks, but even on the contrary. Sometimes inspectors are willing to disclose non-obvious points that may have remained from the previous owners.

Pre-inspection analysis

In the course of a pre-verification analysis, the main task of the tax authorities is to react to a risk factor, obtain information which the inspectorate can use in the future and persuade the company to voluntarily pay additional taxes. The task of the company's lawyers is to obtain from the inspectorate maximum information on controversial issues. The optimal scenario assumes that the company will avoid an on-site inspection and agree on an acceptable adjustment of tax liabilities, if it believes that it will not be possible to completely repel the claims. 

In your dialog with the inspector, try to convey your position primarily in terms of methodological issues. For example, in one of the cases we explained the peculiarities of the production of inert material. This helped to show that the risk that the tax authority presents is irrelevant for the taxpayer.

If taxpayers have found gaps in VAT chains, it is most important to make arguments that are based on an understanding of the processes of pre-check, administration, formation of VAT chains and work to reduce the specific amount of unformed VAT chains.

Field inspection

Interaction with the inspectorate within the framework of control measures begins from the moment when the tax authorities issue a decision on an on-site audit. The first thing a taxpayer has to do is to find out the Inspectorate employee who will be in charge of the field audit. Most likely, this person will hand over to the taxpayer's representative the decision on the appointment of the tax audit. Most often the decision is handed over by hand. If this did not happen, then find out the inspector leading the audit can be by phone. No one will hide this person.

We always recommend to find out who is conducting the inspection. This often helps to avoid some unpleasant control measures, such as seizure. In addition, you can reduce the number of technical problems. A common situation is the exchange of documents and receipt of claims via telecommunication channels. Almost every audit we observe that due to technical problems the inspector does not see the documents sent to him in response, or the program recoded the files so that the taxpayer's answers are unreadable. Banal communication with the inspectors will eliminate these technical risks.

Document retrieval and seizure

Often direct contact with the person who conducts the audit can reduce the amount of unnecessary labor costs. Employees of the field tax department proceed from a list of activities that they are obliged to carry out during the tax audit. The first of them is a requirement to provide documents and information.TC-1 The tax authority makes several requirements, usually of a general and comprehensive nature. Interaction with the auditor will allow you to prioritize the answers and often simply remove questions that inspectors do not need. The fact is that the draft requirements are general and, at least in the beginning, usually not specified for individual characteristics of the taxpayer.

If you correctly build the work on the transfer of documents and contact with the inspection, there is a high chance to avoid seizure. However, the practice of some inspections still proceeds from the fact that this event is necessary. If the seizure still occurred, correct interaction with the tax authority will reduce the damage from it. Thus, in most cases, we manage to agree with the inspectors on the position of employees. That is, after the start of the event, we can release persons whose duties do not include interaction with government agencies. In this way, we reduce the negative factors associated with the company's labor resources. 

For more details on how to organize interaction with tax inspectors, what to prepare for and what advantages can be gained with the right strategy, read the magazine «Company Lawyer».