Requests sent by the tax authorities (administration fiscale) are not uniform. Their content varies, as do their objectives.

In this respect, a distinction should be drawn between requests made by the tax authorities in the exercise of their right of disclosure (droit de communication) and requests made in the exercise of their right of audit (droit de contrôle) in the strict sense.

Requests for information

There is no precise definition of requests for information (demandes de renseignements). It is simply agreed that they are not very binding on the taxpayer. The tax authorities themselves acknowledge that they have no consequences for the assessment procedure and give rise to no penalty. Taxpayers may lawfully refrain from replying to them, and no legal provision sets limits on their use.

The Conseil d’État concludes from this that the tax authorities are not required to inform the taxpayer of the non-binding nature of a request for information.

However, contrary to a widely held belief, the content of these requests is not limited by any legal provision and may therefore not be entirely harmless.

In certain cases, this audit tool may then prove all the more dangerous because, owing to its non-binding nature, it is accompanied by no safeguards for the taxpayer. The only limit monitored by the courts is the duty of fairness required of the tax authorities, which amounts to considering that the person questioned must not be misled as to the scope of the request for information.

It is therefore necessary to examine with the greatest care the content of such requests in order to detect any ambiguity and to assess, in particular, whether they amount to a summary review or an in-depth audit, which our tax law firm can do. In the latter case, the tax authorities must comply with certain procedural safeguards.

Requests for clarification

A request for clarification is more precise than a request for information. The tax authorities ask the taxpayer to clarify information already in their possession. This is why these requests are closely linked to tax returns.

Clarification may be requested on any point of the return whenever it appears unclear, as regards either form or substance.

The taxpayer is then required to explain a given fact more comprehensibly, without having to provide evidence. Conversely, however, requests for clarification may only concern information contained in the return.

The consequences are as follows. These requests must explicitly state the points they concern and must make it possible to obtain from the taxpayer all the information necessary for understanding the return.

However, if the clarification provided makes the return understandable, the tax authorities may not pursue their investigations any further, except by requesting, where they are able to do so, justification.

Requests for justification

Unlike a request for clarification, which generally only yields uncertain information that can merely serve to guide investigations, a request for justification calls for precise and directly usable information.

Unlike clarification, justification requires from the taxpayer not vague explanations, but prima facie evidence.

This is why mere explanations that are not accompanied by any beginning of justification or by sufficient details are, by their generality and imprecision, equivalent to a refusal to reply.

However, whatever its merit, it is not sufficient to rely on a mere formal distinction between requests for information, clarification and justification.

In reality, what matters, beyond the name used by the tax authorities, is whether the requests they send must be accompanied by specific audit safeguards, and what the consequences of a failure to reply will be for the reassessment procedure subsequently implemented by the tax departments.

Our tax law firm can assist you.