Tax Audits Are Not a 'Face-to-Face Obligation' — A Proposal for Practical Reform to Clarify Taxpayers' Right to Choose Response Methods

■ The Problem: The Practice of 'Face-to-Face Presumption'

In tax audits, the understanding that 'responding in person is the principle' is widely shared in practice.

However, upon examining the question and inspection powers (Article 74-2 et seq. of the National Tax General Law) that form the basis of tax audits, there is no explicit provision limiting the response method to face-to-face interactions.

This is an objective fact from a legal perspective, and the institutional design allows for multiple methods, such as:

- Written communication
- Telephone
- Online
- Representation by an agent

■ Risks Arising from Discrepancy with Practice

This 'discrepancy between law and practice' creates the following risks:

- Excessive psychological burden on taxpayers
- Audit operations that do not consider health conditions, etc.
- Creation of unnecessary adversarial structures
- Decrease in audit efficiency

Particularly for taxpayers with significant mental burdens or operational constraints, compulsory face-to-face interactions can lead to substantial disadvantages.

■ Solution: Clarification of the Right to Choose Response Methods

This project proposes the institutionalization of the following regarding response methods in tax audits:

1. Presentation of Choice at the Start of the Audit

At the commencement of the audit, the following options are formally presented to the taxpayer:

- Face-to-face audit
- Written correspondence (both questions and answers)
- Online correspondence (e.g., Zoom)
- Representation by an agent
- Telephone correspondence
- Combination of multiple methods

This is not merely a matter of convenience but a procedural foundation that ensures cooperation based on the taxpayer's free will.

2. Clarification of Duty to Consider Health

When health restrictions are recognized by a medical certificate or similar, it is necessary to clarify the obligation to prioritize less intrusive methods such as:

- Written correspondence
- Representation by an agent

This operation is also consistent with the reasonable accommodation stipulated in the Act on the Elimination of Discrimination against Persons with Disabilities.

3. Suppression of Forced Face-to-Face Interactions and Internal Controls

If only face-to-face interaction is demanded without considering other methods, institutionalizing the following:

- Obligation to record the deliberation process
- Connection to internal supervision

This is a concretization of the principles of proportionality and minimum infringement in administrative law.

■ Expected Effects

With the introduction of this system, the following will be simultaneously realized:

- Strengthening of taxpayer rights protection
- Improvement in audit flexibility
- Reduction of administrative costs
- Mitigation of dispute risks

In particular, the standardization of written correspondence is highly effective from the perspective of improving record accuracy.

■ Institutional Significance

This proposal is not about creating new rights but 'visualizing' the rights inherent in existing laws.

In other words, it is an initiative to correctly reflect the flexibility assumed by the law in practice.

The diversification of response methods in tax audits is not only for the protection of taxpayers but also a reform that enhances the sustainability of administration.

This project aims to prevent the ossification of the system and achieve more rational tax administration.

Global Union (National Tax Union)
Web: https://globalunion-grp.org/mikata/u/kokuzeiunion/