In our article, we will explain why the presence of a lawyer during a tax audit is essential. A lawyer not only protects the taxpayer’s rights, but also makes it easier to navigate the laws.
Receiving a tax audit notice can be unsettling for many but, with proper preparation, no worry is necessary. One of the most important steps is to seek the help of a lawyer who is well-versed in tax law in addition to our accountant: this not only provides security, but also contributes to more effectively enforcing our rights and responding appropriately to the challenges that arise during the audit. Stay tuned for more details.
How is the inspection carried out?
During a tax audit, the Tax Authority examines the fulfillment of tax obligations, including the correctness of the tax assessment, the payment of tax, and the adequacy of tax returns and other data submissions. The audit begins with the delivery of a notification or a letter of mandate, which includes the subject of the audit and the audit period. Some audits only apply to specific tax types or a shorter period, while the so-called comprehensive audit examines tax obligations in full for a given tax period, thus creating a closed period. During the audit, the Tax Authority may use various means of proof, such as inspecting documents, commissioning an expert, inspecting real estate, and even ordering an official seal.
What rights does the taxpayer have?
Representation of the taxpayer by a lawyer is important, among other things, because not only the tax authority, but also the taxpayer has various rights in connection with the procedure, which are worth knowing. S/He is entitled, among other things, to make comments on the findings made during the audit, to inspect the minutes, taking into account certain limitations, and to submit a motion for evidence. However, without a legal representative, it is extremely easy to get lost in the maze of complicated tax legislation.
What are the benefits of being represented by a lawyer?
The use of a lawyer during a tax audit is also of paramount importance because, with their professional knowledge, they can effectively represent the interests of the taxpayer, thus supervising, for example, the enforcement of the right to a fair trial and the avoidance of possible irregularities. A lawyer who is knowledgeable in tax law issues is also able to more effectively monitor legislative changes that may affect the taxpayer’s situation during a tax audit. The lawyer’s assistance thus not only serves to protect the taxpayer, but also ensures that he or she fulfills his or her obligations in accordance with the law.
A declaration omitted or improperly submitted during the audit can permanently close the future possibilities of a business. It is worth being aware of the fact that the rule of tax administrative – and, more broadly, administrative – procedures is that arguments omitted in the „basic stage” are no longer taken into account later in the appeal part.
When should you see a lawyer?
Of course, the sooner you contact a lawyer, the better off you are. If possible, it is important to consult with a lawyer before an audit begins, especially if you are conducting an unusual transaction or if your business operates in an area included in the annual tax audit plan of the Hungarian Tax and Customs Administration (NAV).
If your company is subject to a tax audit, we recommend that you consult with your attorney. If you need an attorney experienced in tax law, please feel free to contact Dr. Nemes Law Office.
