Abbreviated checks under incorrect assumptions

Thanks to IT resources, data managers can cross-reference information and obtain results ...

Written by

Francisco Villalobos

Published on

23/03/2022
Blog

Thanks to IT resources, data managers can cross-reference information and obtain results. But as with anything else in life, if the premises to cross such information and obtain conclusions seek illogical or illegal results, the tool, conceived to improve processes, becomes the problem, because the results it achieves, generate a non-existent problem prior to its application.

We have seen these days, that after the taxpayers have filed our income tax return, the DGT, its systems programmed by human, officials, begin to produce previous liquidations by abbreviated verifications based on the information that the same taxpayers have provided to the tax administration.

First, what is a preliminary liquidation by abbreviated verification? It is an action through which the tax administration, based on certain data it has, finds a tax difference and through a brief act and without entering into an exhaustive investigation, establishes a higher tax than the one declared by one. Thus, Article 120 of the Tax Procedure Regulations: "Abbreviated verification actions will be those carried out using data and evidence in the possession of the Administration or that are requested from the taxpayer on a given period or tax, either prior to the initiation of the procedure of such verification or during its development, without extending to the examination of the accounting books of the business or professional activities that are verified. However, this does not limit the power to verify specific data or information of any account(s) or accounting record(s), referred to the data or information under study." In other words, it is a procedure limited to an element that arises from crossed information, usually, and that serves as a basis to determine a tax difference against the taxpayer.

Well, in the use of this mechanism we have seen that, if a company obtains services from what the DGT calls "sole supplier", that is to say, that only provides services to that company, the expense is rejected as deductible. The "sole supplier", it seems, is qualified, even though there is no rule that validates it, as fraudulent, since it only has as a client the company that has deducted this expense. This is a good example of an incorrect use of information, since having declared this legitimate expense generates this automatic adjustment that will now confront the DGT and the taxpayer for years. The application of technology without criteria or basis becomes a problem for the system. First, the criteria must be based on the law, then the technology must be used to improve control and compliance. It seems to me that the DGT is not clear about this order.

This taxpayer will have no choice but to reject the adjustment. Or accept, an illegal adjustment, to avoid the long and costly procedure. These cannot be the options generated by a control system that the taxpayers themselves pay for.

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