Translated material
Accountants in uniform
The Supreme Court recognized the right of police officers to conduct tax examinations
In a difficult legal struggle, the Russian police yesterday defended their right to conduct tax examinations in criminal cases of tax crimes - that is, in fact, the right to independently assess the scale of arrears, which serves as the basis for bringing forward specific charges. The Supreme Court (SC) held a hearing on the application of Muscovite Victoria Dedyaeva, who argued that such examinations can only be carried out by tax inspectorates - only they are able to correctly assess the correctness of tax payments and calculate the amount of arrears. And the amounts of non-payments determined by experts of the Ministry of Internal Affairs cannot even be challenged in court, she complained, which grossly violates the rights of citizens, especially those who are suspects and accused in criminal cases of tax crimes. This is exactly what Ms. Dedyaeva had to experience for herself - as a chief accountant, she once had to become a defendant in a criminal case about tax evasion from a legal entity.However, she failed to defeat the police. The meeting participants agreed with Ms. Dedyaeva that there may be some gaps in the laws in this regard , but she could not prove exactly how this violated her rights.
A criminal case was opened in November 2006 by the Main Directorate of Internal Affairs of the Krasnodar Territory against the head of LLC Corporation AK Elektrosevkavmontazh Evgeniy Subbota and the financial director of this enterprise Lyudmila Popova, as well as their Moscow colleagues, employees of Promstroyproekt LLC - general director Alexander Bryuzgin and the chief accountant Victoria Dedyaeva. They were suspected of evading taxes from the organization by including deliberately false information in the tax return. The amount of funds not received by the state was determined by specialists from the Expert Forensic Center (ECC) of the Central Internal Affairs Directorate of the Krasnodar Territory. According to their calculations, it amounted to over 3 million rubles. According to the note to Art. 199 of the Criminal Code, this is enough to initiate a criminal case: criminal liability arises for non-payment of taxes in excess of 500 thousand rubles.
Ms. Dedyaeva questioned the fairness of the experts’ conclusions and contrasted them with the result of an audit by the Federal Tax Service (FTS), which counted arrears of only 490 thousand rubles. The courts of the Krasnodar Territory refused to consider claims against experts from the Ministry of Internal Affairs, since the content of any forensic examinations cannot be disputed at all. This was, apparently, the reason for the Moscow chief accountant to delve into legislative and regulatory acts and find out on what basis the police were given the right to instruct their experts to calculate taxes.
Ms. Dedyaeva came to the conclusion that neither the Tax Code nor the Law “On the Police” define the rights of internal affairs officers in this area. The concept of tax examination - the study of the fulfillment of obligations to calculate taxes and fees - is contained only in the list of all types of examinations that are carried out in the forensic units of the Ministry of Internal Affairs, approved by order of the head of this department in June 2005. According to the applicant, the Supreme Court should have excluded tax examination from this list, that is, taken away this function from the experts of the Ministry of Internal Affairs altogether.
Ms. Dedyaeva’s position was explained in detail at a court hearing yesterday by her representative Sergei Nazarov. According to him, when conducting a tax examination, police specialists go beyond purely professional knowledge in the field of science and craft, as required by the rules of criminology, and invade the field of law, while they are prohibited from giving any legal assessments. He also noted that according to the Constitution, “laws that establish new taxes or worsen the situation of taxpayers do not have retroactive effect.” Monitoring compliance with legislation in the field of taxes and fees is regulated by the Tax Code, and the powers of the police are clearly defined in it.
In particular, together with tax authorities, at their own request, police officers can participate in joint on-site tax audits. And “if circumstances are identified that require the performance of actions that are within the powers of the tax authorities by the code, the internal affairs bodies are obliged to forward the materials to the appropriate tax authority to make a decision on them.” As Mr. Nazarov noted, the Law “On the Police” gives its employees the right to participate in tax audits at the request of the tax authorities, to receive information that constitutes a tax secret, and if there is sufficient data indicating signs of a crime related to violation of tax and fees, conduct inspections of organizations and individuals. That is, there is not a word in any law that the police are given the right to conduct tax examinations. It is only in the order of the head of the Ministry of Internal Affairs, but, as Mr. Nazarov assured, he does not have the right to distribute such powers to his employees unless this is stipulated in the laws.
Ms. Dedyaeva’s representative said that taxpayers can challenge in arbitration courts the claims made against them by tax inspectorates and may disagree with the amount of amounts charged to them as underpaid to the budget. And the courts, he noted, often side with entrepreneurs. Moreover, the Supreme Arbitration Court (SAC), at its plenums, making generalizations of practice, gives interpretations to certain tax rules and makes certain instructions on how various taxes and fees should be calculated by enterprises. And the experts of the Ministry of Internal Affairs, Mr. Nazarov noted, cannot apply the practice of the Supreme Court in their research, since, again, this relates to the legal sphere, where they are prohibited from interfering. “The rights of citizens are being seriously violated,” he said. “Especially those who become accused and suspected in criminal cases of tax evasion, since they are deprived of the opportunity to appeal the amount charged to them in the courts.” Thus, tax inspectorates - and only they - are competent to conduct an examination of the payment or non-payment of taxes, Mr. Nazarov concluded.
Representatives of the Ministry of Internal Affairs argued that their experts were engaged in calculating tax payments legally. And they were able to defend their point of view. In particular, the representative of the Ministry of Internal Affairs in the Supreme Court, Hayk Maryan, noted that until July 2003, the investigation of tax crimes was carried out by the Tax Police, which was authorized by a special law to conduct forensic economic examinations, which included the tax authorities. After the abolition of this structure in 2003, all its powers passed to the Ministry of Internal Affairs , including conducting examinations.
In addition, according to Mr. Maryan, the rights of suspects and accused are in no way violated. According to the Code of Criminal Procedure, they have the right to challenge an expert, and the expert’s conclusion itself can be recognized in court as invalid or inadmissible evidence obtained in violation of the law. They may also apply for the appointment of additional or independent, i.e. non-state, examinations. The representative of the Ministry of Internal Affairs also drew attention to one of the resolutions of the plenum of the Supreme Court regarding tax crimes: it states that when investigating such crimes, courts should be guided by various evidence, including expert opinions.
Doctor of Law, Deputy Head of the Ministry's Legal Department Ilya Kucherov also spoke in defense of the Ministry of Internal Affairs experts. Mr. Marjan called him “the developer of the scientific basis for investigating tax crimes.” “In Russia, for the first time, a tax examination in a criminal case of tax evasion was carried out in the famous Mavrodi case. Today, about 3 thousand such examinations are carried out annually,” said Mr. Kucherov. -- The Tax Code does not contain a single article that would affect relations in the field of criminal offenses. And the materials that tax authorities collect often fail to detect that a tax crime has been committed. Acts of tax inspections appear in our (Ministry of Internal Affairs - Ed. ) criminal cases only in 3-5% of cases. Tax authorities cannot dig as deep as our operational units. Their materials are only what the taxpayers themselves provided them with. And in our path, what, on the contrary, is carefully hidden, is obtained through cunning conspiracies.”
Deputy Head of the Forensic Center Emil Musin, who oversees the tax examination department, stood up for his specialists. “Our experts are not just people knowledgeable in the field of economics. These are highly qualified specialists with higher economic education. A tax expert is the same economist as the chief accountant at an enterprise, they just apply their knowledge in different areas.” Mr. Musin emphasized that experts do not study whether the actions of a particular person should be classified as theft or shortage; for example, they do not establish signs of tax evasion: “Experts study huge amounts of financial and economic documents, accounting and accounting, tax accounting, tax reporting and tax returns. And then the investigators make a conclusion about the presence or absence of a crime.”
Judge Nikolai Romanenkov asked Ms. Dedyaeva about the progress of the investigation into her criminal case. It turned out that last summer it was discontinued, in January 2008 it was resumed again, and the other day the chief accountant received news of the next closure of the case. Moreover, this time the basis for closure was the same police examination. “She saved you!” Intellectuals saved you!” - Emil Musin immediately exclaimed.
Ms. Dedyaeva still insisted on the imperfection of the legislation. “Perhaps, you and I need to initiate amendments to the Tax Code,” she suggested to representatives of the Ministry of Internal Affairs. “We have already proposed, but the authors of the Tax Code said that the police have nothing to do with it,” Mr. Kucherov threw up his hands.
The court rejected the application of the chief accountant Dedyaeva. Neither she nor her representative made any comments. They only said that they were unlikely to appeal this decision.