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No correction required for assessment errors of the tax office

The daily press covered The Federal Fiscal Court judgment that taxpayers are not obliged to correct erroneous tax assessments which are in their favour.

In the deciding case, the tax office had inadvertently assessed an operating profit of about EUR 500,000 as a loss of the same amount. The favoured taxpayer was not only happy about the tax savings that year, but also used the assessed loss to offset against his positive income in subsequent years.

When his audit was announced, the taxpayer began to doubt whether he had acted lawfully and voluntarily paid in order to avoid a penalty fee. The Federal Fiscal Court stated in its decision that the voluntary disclosure would not take effect because the taxpayer was not guilty of tax evasion. The tax office must correct its own errors within the time limit.

In this case, the opportunity for the tax office was unfortunately already past when the mistake was recognised.

Source: BFH-judgment on 04.12.2012 (VIII R50/10)


Michael Leinauer, Partner, Auditor, Tax Advisor

Tags: tax advice

By Michael Leinauer, Partner, Auditor, Tax Advisor, published 2013-05-01

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