The hierarchical appeal is intended for taxpayers who encounter difficulties:

  • during the course of the accounting audit; or
  • during the contradictory examination of the personal tax situation.

The hierarchical appeal: an amicable means of appeal

The charter of rights and obligations of the audited taxpayer allows taxpayers to address:

  • to the divisional inspector (formerly the departmental inspector) or principal inspector; and then
  • to the contact person specially designated by the director of tax services.

The charter of rights and obligations of the audited taxpayer further allows taxpayers who disagree with the auditor on the envisaged rectifications:

  • to obtain further clarification from the divisional or principal inspector and, if significant differences remain after these contacts; and
  • to call upon the contact person specially designated by the director to whom the auditor reports.

The hierarchical appeal allows the taxpayer in practice to set out the elements that he or she considers justify a change in the tax administration’s position.

The hierarchical appeal: a remedy not provided by the legislator

This possibility of hierarchical appeal does not derive from any legal provision but from administrative doctrine. This procedure can be used against the tax authorities only on the basis of Article L 10, para. 4 of the Book of Tax Procedures. This text allows the tax authorities to appeal to the tax authorities on the basis of the law. This text in fact allows taxpayers to avail themselves of the administrative guarantees contained in the taxpayer’s charter.

The contributions of the Conseil d’Etat (decision of 25 March 2021 n°430593 “Sté RTE Technologies”)

The Conseil d’Etat recently had the opportunity to clarify that this possibility covered two distinct substantial guarantees open to taxpayers at two different moments of the control procedure:

  • in the first place, during the audit and before the rectification proposal is sent; and
  • in the second place, after the response made by the tax administration to the taxpayer’s observations, in case of disagreement on the merits of the envisaged adjustments.

It follows that the refusal of the tax administration to comply with a request for an interview made during the audit and stating difficulties during the audit is likely to result in the irregularity of the audit procedure. The irregularity of the audit procedure is the result of the refusal of the tax administration to comply with a request for an interview made during the audit and stating difficulties during the audit. The irregularity would thus be admitted even if an interview had been granted after a second request made by the taxpayer following the tax administration’s response to his observations. The question arises, however, whether the mere mention of difficulties is sufficient to support a request for an interview during an audit, or whether it is necessary to justify the difficulties encountered at the time of the request.