Defence in the face of a tax audit rests largely on the quality of the legal arguments deployed. The precise citation of the texts (French Tax Code, French Book of Tax Procedures, BOFiP, case law of the Conseil d'État, the Cour de cassation and the CJEU), their coherent articulation, and the command of procedural deadlines (LPF art. L. 57: 30 days to answer an adjustment notice, extendable by 30 days on request) determine the outcome of the dispute. The binding force of administrative doctrine (LPF art. L. 80 A and L. 80 B) is an often under-used lever. This page sets out our method for building the legal arguments of the defence.
A response to an adjustment notice that relies solely on factual arguments or general opinions loses ground against reasoning built on the texts. Conversely, a response that draws precisely on the applicable articles of the French Tax Code and the French Book of Tax Procedures, on the BOFiP doctrine in force at the date of the facts, and on the relevant case law, compels the tax authorities to answer point by point on legal ground.
Three little-known levers: (1) the binding force of doctrine (LPF art. L. 80 A): the tax authorities are bound by their own doctrine, provided the taxpayer complied with it in good faith; (2) the advance ruling (LPF art. L. 80 B): a formal commitment by the tax authorities on a given situation, binding even where the doctrine subsequently changes; (3) review of the procedure (LPF art. L. 55 to L. 62): a defect of form may lead to the full discharge of the reassessment.
The firm builds the defence in five passes: procedural analysis (defects of form), analysis of the characterisation (applicable text), case-law analysis, binding force of doctrine, and computation and adjustment of the penalties.
First step: precisely identify the applicable articles of the French Tax Code, the French Book of Tax Procedures, the Commercial Code or others. An erroneous characterisation by the tax authorities (wrong article, wrong interpretation) opens the way to a discharge. Precision matters: citing "CGI art. 39, 1, 1°" is stronger than "the rules on the deduction of expenses".
Conseil d'État, Cour de cassation, CJEU, lower courts: the applicable case law must be cited precisely (date, appeal or docket number). Recent case law consistent with the taxpayer's situation is a powerful asset. It must be presented with its factual context to demonstrate its relevance.
The tax authorities are bound by their own doctrine for as long as they have not amended it. Where the taxpayer applied the BOFiP doctrine in force in good faith, the tax authorities cannot carry out a reassessment contrary to that doctrine, even if they consider the doctrine to be mistaken. A powerful lever often overlooked in the first responses.
The advance tax ruling is a formal commitment by the tax authorities on a given situation, at the taxpayer's request. It is binding on the tax authorities even where their position subsequently changes. A taxpayer holding a favourable ruling enjoys strong legal certainty. To be considered ahead of high-stakes operations, but also to be relied on in the defence where a ruling has been issued.
The audit procedure is strictly framed (LPF art. L. 55 to L. 62). Possible defects: absence of the audit notice, excessive duration, failure to state reasons in the adjustment notice (LPF art. L. 57), failure to respond to the taxpayer's observations, irregular composition of the commission. A defect of form may lead to the full discharge of the reassessment: an angle to be examined systematically.
The firm builds each response to an adjustment notice following a protocol: (1) exhaustive procedural analysis (defects of form); (2) analysis on the merits (characterisation, applicable texts, case law); (3) search for binding doctrine and any advance rulings; (4) computation of penalties and mitigation arguments; (5) drafting articulated with precise citations and a hierarchy of arguments.
For high-stakes disputes, we coordinate the analysis with external consultants (economists, chartered accountants, sector specialists) to strengthen the factual argument in support of the legal argument.
Because the tax authorities and the court reason on precise texts. A vague or generic response allows the tax authorities to maintain their position without having to justify it point by point. A response that deploys precisely the applicable articles, the BOFiP doctrine and the relevant case law compels the tax authorities to answer on legal ground, which often reveals the weaknesses of their position.
30 days from receipt (LPF art. L. 57), extendable by 30 days on a simple request sent to the tax authorities before the initial deadline expires, so up to 60 days in total. Beyond that period, the adjustment becomes, in principle, irrevocable. The request for an extension is, in practice, almost systematic to allow a thorough analysis.
Article L. 80 A of the French Book of Tax Procedures provides that the tax authorities are bound by their own doctrine (BOFiP, instructions, published ministerial answers) for as long as they have not amended it, even where that doctrine is more favourable than the strict wording of the statute. Consequence: a taxpayer who applied a doctrine in force in good faith may rely on that doctrine against the tax authorities, who cannot carry out a contrary reassessment. A powerful lever.
The advance ruling (LPF art. L. 80 B) is a request for a formal commitment addressed to the tax authorities on a precise factual situation. The tax authorities' answer is binding and commits them for as long as the facts remain unchanged, even where the doctrine subsequently changes. The ruling must be requested ahead of high-risk operations (typically before a complex transaction). Response time: 3 months for general rulings, 6 months for valuation rulings.
Yes, in certain cases. The audit procedure is strictly framed by articles L. 10 to L. 62 of the French Book of Tax Procedures. Frequent defects: absence of the audit notice, excessive duration of the audit (in practice: 3 months maximum for an accounts audit of a business with turnover < €783,000), failure to state reasons in the notice (LPF art. L. 57), failure to respond to the taxpayer's observations. A defect may lead to the full discharge of the reassessment.
A strategy in five passes: (1) procedure: defects of form to exploit; (2) merits: characterisation, texts, case law; (3) doctrine: binding force of BOFiP, rulings; (4) penalties: mitigation of the surcharges; (5) negotiation: hierarchical appeal, settlement where appropriate. The trade-off between litigation and negotiation depends on the analysis of the prospects of success and the economic risk.
Simulation of a tax audit conducted by a lawyer, ahead of the tax authorities: a quantified report, covered by professional privilege.
Voir la page Tax auditGeneral procedure of audit and defence.
Voir la page Tax auditData mining, CFVR, collection on social media.
Voir la page Property dealerTypical case of abuse-of-law procedure (LPF art. L. 64).
Voir la page LitigationPost-adjustment defence strategy, hierarchical appeal, litigation.
Voir la pageA confidential initial consultation to build the defence strategy, deploy the relevant legal arguments and exploit any procedural defects.
© BENSAID Avocats — The information on this site does not constitute legal advice and cannot replace a personalised tax analysis.