J'ai fait appel à Maître Uzan dans le cadre d'une procédure fiscale longue et techniquement complexe. Analyse rigoureuse du dossier, réponses précises dans des délais parfois très courts, et surtout une vraie capacité à maintenir un dialogue constructif avec l'administration plutôt qu'à durcir inutilement les positions.
Il a pris le temps de m'expliquer chaque étape et les options possibles, sans jargon et sans promesses excessives. Le dossier s'est conclu par une issue négociée.
Un accompagnement sérieux, du premier échange jusqu'au suivi complet de l'exécution. Je recommande sans réserve.
Proposed Tax Reassessment
By Marc Uzan, French tax lawyer in Paris
Proposed Tax Reassessment: How to Respond Within 30 Days
Tax lawyer at the Paris Bar since 2008 – exclusive tax law practice, including defence after a tax audit
Summary
- Response time limit: 30 days from receipt of the proposal, extended by 30 days upon a request received by the French tax authorities before the end of the initial period (Art. L57 and R*57-1 of the Tax Procedure Code (LPF)).
- Silence = tacit acceptance: in principle, without a response within the time limit, the adjustments are deemed accepted and the burden of proof then lies with the taxpayer.
- Remedies before the tax is collected: reasoned reply from the tax authorities, hierarchical appeal, the designated senior official (interlocuteur), then the departmental commission within 30 days.
- Penalties: late-payment interest of 0.20% per month (Art. 1727 of the French General Tax Code (CGI)) and surcharges of 10%, 40% or 80% (Art. 1728 and 1729 CGI), which your response can contest.
- Tax lawyer: checks the regularity of the procedure, drafts your observations and represents you at every stage.
What is a proposed tax reassessment and what must it contain?
The proposed tax reassessment (proposition de rectification) is the letter by which the French tax authorities inform you of the adjustments they intend to make following an audit (desk audit, in-depth examination of personal tax situation or business tax audit). It opens the adversarial phase: the tax has not yet been put into collection.
The law requires it to have specific content:
- Reasons: it must enable the taxpayer to make observations or to signify acceptance (Art. L57 LPF). Each adjustment must state the taxes, years, amounts and the legal and factual grounds.
- Notice of the right to be assisted by an adviser: the taxpayer must be informed that they may be assisted by an adviser of their choice, failing which the procedure is null and void (Art. L54 B LPF).
- Source of information: the tax authorities must state the content and source of information obtained from third parties and disclose it on request before the tax is put into collection (Art. L76 B LPF).
- The amount of penalties envisaged and the reasons for them.
In the case of a business tax audit or an in-depth examination of personal tax situation, the charter of rights and obligations of the audited taxpayer (charte des droits et obligations du contribuable vérifié) is given to you with the notice of audit. Its provisions are binding on the tax authorities.
How long do you have to respond and what happens if you remain silent?
The taxpayer in principle has 30 days from receipt of the proposal. This period is extended by 30 days on simple request, provided that the request is received by the tax authorities before the first period expires (Art. L57 LPF). A late request is in principle not admissible. A written request, with proof of receipt, may be useful.
In principle, in the absence of a response within the time limit, the taxpayer is considered to have tacitly accepted the adjustments. They may still file a claim after the tax has been put into collection, but it is then up to them to prove that the tax is excessive. Conversely, where observations have been submitted within the time limit, the burden of proof in principle lies with the tax authorities (subject to the exceptions in Art. L192 LPF).
| Step | Time limit | Legal basis |
|---|---|---|
| Response to the proposed tax reassessment | 30 days from receipt | Art. L57 and R*57-1 LPF |
| Extension | + 30 days, upon a request received before the end of the initial period | Art. L57 LPF |
| Tax authorities' reply to the observations | Before the tax is put into collection; 60 days for certain small audited businesses (silence = acceptance of the observations) | Art. L57 and L57 A LPF |
| Referral to the departmental commission | 30 days from receipt of the tax authorities' reply | Art. L59 and R*59-1 LPF |
| Regularisation during the audit | Before the proposal (business tax audit, ESFP) or within 30 days of its receipt (desk audit) | Art. L62 LPF |
How to build an effective response to the proposed tax reassessment?
- Analysis of each head of adjustment, ideally with your lawyer: tax, year, amount, legal basis, penalties. Depending on the case, it may be possible to accept some points and challenge others.
- Review of the procedure: limitation period, delivery of the charter, sufficient reasoning, mention of the right to be assisted by an adviser, disclosure of documents obtained from third parties.
- Discussion of the merits: applicable texts, enforceable administrative guidance (BOFiP, rulings), characterisation of the facts, calculations.
- Penalties: the 40% surcharge requires the tax authorities to prove that the failure was deliberate (Art. L195 A LPF); depending on the case, it may be challenged.
- Evidence: contracts, invoices, statements, certificates, with a list of exhibits.
- Sending within the time limit: by registered letter with acknowledgement of receipt or via the secure messaging service, with a copy usefully kept.
What happens after your response and what remedies exist before the tax is collected?
- Reply to observations: if the tax authorities reject your observations, even partially, their reply must state reasons (Art. L57 LPF).
- Hierarchical appeal: you may ask to meet the auditor's superior. For a desk audit, this appeal is provided for by Article L54 C LPF.
- Designated senior official (interlocuteur): if the disagreement persists after the hierarchical appeal, the charter provides for referral to a senior official designated by the director (interlocuteur départemental).
- Commissions: the departmental commission for direct taxes and turnover taxes (commission départementale des impôts directs et des taxes sur le chiffre d’affaires) or the departmental conciliation commission (commission départementale de conciliation) may be referred to within 30 days of receipt of the tax authorities' reply (Art. L59 and R*59-1 LPF), for matters within its jurisdiction. It issues an opinion.
What penalties do you face and can they be reduced?
- Late-payment interest: 0.20% per month, i.e. 2.40% per year (Art. 1727 CGI). It compensates the Treasury for its loss and is not a penalty.
- Surcharge of 10% to 80% for late filing or failure to file: 10% in principle, 40% if the return is not filed within 30 days of a formal notice, 80% where an undeclared activity is discovered (Art. 1728 CGI).
- Surcharge for understatement: 40% for a deliberate failure, 80% for fraudulent practices, 40% or 80% for abuse of law (Art. 1729 CGI).
- Regularisation during the audit: in principle, where a taxpayer acting in good faith files a supplementary return and pays the tax, late-payment interest is reduced by 30% (Art. L62 LPF).
- Settlement: the tax authorities may agree to reduce penalties by way of settlement, but in principle not the tax itself (Art. L247 LPF).
If the reassessment is upheld, the tax is put into collection (tax assessment notice or notice of collection, Art. L256 LPF). A prior claim may then be filed (Art. L190 LPF), together, where appropriate, with a request for a stay of payment (Art. L277 LPF). These steps are detailed on the pages tax reassessment and tax litigation.
What I see in my cases
In the proposed reassessments I examine, the weaknesses mainly lie in procedural errors, particularly when the procedure drags on, with successive appeals and exchanges. The limitation period and the regularity of the procedure are therefore among the first points I check; I have fairly regularly obtained the annulment of reassessments on these grounds. Tax law is complex, and adjustments are sometimes proposed wrongly: discussion may then make it possible to call them into question.
Amicable remedies (hierarchical superior, designated senior official, commissions) are very useful, but here again, everything depends on how things are presented. As regards surcharges, good faith is assessed in the light of many factors specific to each situation: where assets are held abroad, the ties with the country concerned, the origin of the funds, constructive cooperation with the tax authorities. And almost every time, I attempt a negotiation.
Why use a tax lawyer?
- Responsiveness: the 30-day period is short. The lawyer can request the extension and organises the collection of documents.
- Review of the procedure: the lawyer looks for irregularities that may lead to the discharge of all or part of the assessments.
- Argument: they draft observations based on the texts, administrative guidance and the documents and, depending on the case, challenge the penalties.
- Representation: the lawyer assists you in the hierarchical appeal, before the designated senior official, the commission and, if necessary, the court.
For an analysis of your proposed tax reassessment, you can book an appointment.
FAQ
How do I request the additional 30 days to respond?
In principle, a written request is sent to the department that issued the proposal. It must be received by the tax authorities before the initial 30-day period expires. The extension is then in principle granted as of right.
A registered letter with acknowledgement of receipt or the secure messaging service may be useful to keep proof of the date of receipt.
What happens if I do not respond to the proposed tax reassessment?
In principle, silence amounts to tacit acceptance of the adjustments, and the tax is then put into collection.
The taxpayer in principle retains the right to file a claim, but it is then in principle up to them to prove that the tax is excessive.
Can the 40% surcharge for deliberate failure be contested?
In principle, yes. Errors are presumed to be unintentional: it is for the tax authorities to demonstrate that the failure was deliberate (Art. L195 A LPF). The reasons for the penalty must appear in the proposal.
Your response can therefore contest the surcharge independently of the tax itself, setting out the elements that establish your good faith.
Who is the departmental senior official (interlocuteur départemental) and in which cases can they be approached?
This is an official designated by the departmental or regional director of public finances. The charter of the audited taxpayer provides for referral to this official after an initial appeal to the auditor's superior, where the disagreement persists.
Glossary
- Proposed tax reassessment (proposition de rectification): a reasoned letter by which the tax authorities announce the adjustments envisaged and open the adversarial process.
- Tacit acceptance: the effect of failing to respond within the 30-day time limit (or 60 days in the event of an extension).
- Departmental senior official (interlocuteur départemental): an official designated by the director, approached after the hierarchical appeal.
- AMR: notice of collection (avis de mise en recouvrement), the instrument that makes the tax payable.
Further reading
- Tax Procedure Code (LPF): Art. L54 B, L54 C, L57, L57 A, L59, L62, L76 B, L192, L195 A, L247, L256, L277 and R*57-1, R*59-1.
- French General Tax Code (CGI): Art. 1727 (late-payment interest), 1728 and 1729 (surcharges).
- BOFiP: BOI-CF-IOR-10-50 (effects of the proposed tax reassessment), BOI-CF-IOR-20-10 (regularisation during the audit), BOI-CF-PGR-30-10 (safeguards), BOI-CF-INF-10-20-20 (surcharges).
- Charter of rights and obligations of the audited taxpayer (DGFiP).
- Related pages: Tax reassessment, Tax litigation, Tax audit: defending yourself.
