Tax audit: the administration must inform you of your right to advice from the time of the adjustment proposal

Imagine: you are a property owner in Château-Gontier, and you receive a letter from the tax administration informing you of an accounting audit. Panic on board? Not necessarily. But a question nags at you: must the administration offer you the assistance of an adviser from the start of the operations? And if it does not, is the procedure void?

This question was asked to the Court of Cassation in 1964 by a Strasbourg football club. And the answer, still relevant today, is clear: the obligation to inform the taxpayer of his right to be assisted by an adviser only arises when an adjustment proposal is made, not during the preliminary verification operations.

In other words, the administration can verify your accounts without offering you a lawyer or accountant on the spot. It is only when it considers that an adjustment is to be made that it must inform you of this possibility. A nuance that is important, as we shall see.

The facts: a story that happens every day

The "Football Club of Strasbourg 1906" had organised sporting events and received profits. The club's president and treasurer were subject to an accounting audit by the tax administration. At the end of this audit, the administration considered that adjustments were necessary and notified an adjustment proposal to the club.

However, during the verification operations, the administration had not informed the directors that they could be assisted by an adviser. It was only at the time of the adjustment proposal that this information was given. The directors then challenged the procedure, arguing that the lack of information from the start of the verification operations rendered the entire procedure void.

The case was brought before the Court of Cassation, which had to decide: does the obligation to inform apply from the first contact with the taxpayer, or only when the tax authorities decide to make an adjustment?

The reasoning of the court — explained

The Court of Cassation relied on Article 1649 septies of the General Tax Code (CGI), which requires the tax administration to inform the taxpayer of his right to be assisted by an adviser. But the Court specified the time at which this obligation must be fulfilled.

It held that the obligation to give notice to the taxpayer that he may be assisted by an adviser only applies to the administration, on pain of nullity, at the time when an adjustment proposal is made. However, this obligation does not affect the verification operations themselves, from which this proposal may result.

Why this distinction? The judges considered that verification is an investigation phase, where the administration collects information. It is only at the end of this phase, when it decides to make an adjustment, that the taxpayer must be able to defend himself, assisted by an adviser. Before that, the administration can act without particular procedural constraints.

The decision therefore confirms a strict interpretation of Article 1649 septies: no nullity if the information is given only at the time of the adjustment, provided it is actually given at that stage.

What this changes for you — practically

For landlord owners, tenants, co-owners or real estate professionals, this decision has direct scope: if you are subject to a tax audit, do not expect the administration to offer you an adviser from the start. You may be questioned, your documents consulted, without you having the possibility to be assisted on the spot.

Let's take a concrete example: you are a property owner in Craon and you rent out a property. The tax authorities audit you on your property income declarations. During the verification, the inspector examines your bank statements, your rent receipts. You do not have the right to demand a lawyer at that time. But if, at the end, the tax authorities notify you of an adjustment of €5,000, they must then inform you that you can be assisted by an adviser to contest this adjustment.

If you are in this situation, you must therefore know that the lack of information during the verification is not a procedural defect. On the other hand, if the adjustment proposal does not mention your right to an adviser, you can request its annulment. Note: the deadline to contest is generally 30 days from receipt of the proposal.

Four tips to avoid this type of dispute

• Keep all correspondence from the tax administration: as soon as you receive a verification notice, keep a copy of each document. The moment when the information on the right to an adviser was given to you is crucial for the validity of the procedure.
• Do not sign anything without understanding: during the verification, the inspector may ask you to sign documents. Take the time to read them. If an adjustment is proposed to you, ask to be assisted by an adviser before signing anything.
• Check the adjustment proposal: as soon as you receive an adjustment proposal, ensure that it explicitly mentions your right to be assisted by an adviser. If not, you can challenge the procedure for a procedural defect.
• Consult a tax lawyer as soon as you have a doubt: even if the administration does not have to offer you an adviser during the verification, nothing prevents you from consulting one on your own initiative. A lawyer can help you prepare your defence in advance.

Further reading: related case law and developments

This 1964 decision is part of a consistent line of case law. The Court of Cassation has confirmed this position on several occasions, notably in a judgment of 12 July 1976 (No. 75-90.123) where it held that the omission of information during the verification does not render the procedure void if the information is given in the adjustment proposal.

Since then, the law has evolved. Article L. 47 of the Tax Procedures Book now requires that the verification notice mention the possibility for the taxpayer to be assisted by an adviser. But the distinction between verification and adjustment proposal remains valid: the lack of information during the verification is not sanctioned by nullity, unless the adjustment proposal itself omits to mention it.

In the future, courts may be called upon to clarify this point if taxpayers invoke the right to a fair trial (Article 6 of the European Convention on Human Rights). But for now, the rule is clear: the information must be given at the time of the adjustment, not before.

In practice: what to do

FAQ:

• Can I refuse the verification if the administration does not offer me an adviser? No, the verification can proceed without you being assisted. You cannot interrupt it for this reason.
• What if the adjustment proposal does not mention my right to an adviser? You can contest the nullity of the procedure within 30 days. Send a registered letter to the tax administration invoking this procedural defect.
• Can I be assisted by an adviser during the verification if I wish? Yes, absolutely. Nothing prevents you from calling a lawyer or accountant from the start. It is even advisable if you have concerns.
• What are the risks if I do not contest in time? You lose the possibility to invoke this procedural defect. The adjustment becomes final and you must pay the sums claimed, plus late payment interest.

Are you in a similar situation? A first 30-minute consultation with Maître Zakine (€45) can save you months of procedure — and often much more. Book an appointment →