Where a disagreement with the tax auditor persists over the reassessments proposed at the end of a tax audit, several out-of-court remedies are available before litigation has to be considered. The hierarchical appeal (recours hiérarchique), that is, the possibility of referring the matter to the auditor’s superior, is one of these remedies and is often overlooked.
The right to refer the matter to the auditor’s superior
A taxpayer subject to an accounting audit (vérification de comptabilité), an accounting review (examen de comptabilité) or an in-depth review of personal tax affairs (examen contradictoire de la situation fiscale personnelle) can contact the auditor’s superior in the event of difficulties during the audit or persistent disagreement. This right is provided for by the charter of rights and obligations of the audited taxpayer (charte des droits et obligations du contribuable vérifié), whose provisions are binding on the tax authorities under Article L. 10 of the French Tax Procedure Code (Livre des procédures fiscales) (in French).
A hierarchical appeal can be made at two distinct stages. During the audit, it allows you to report difficulties affecting the conduct of the audit, up to the sending of the proposed tax reassessment (proposition de rectification). After the tax authorities have replied to the taxpayer’s observations, it concerns the merits of the reassessments maintained, as part of the adversarial reassessment procedure. The request must then be made within thirty days of receipt of that reply. A request made as soon as the proposed tax reassessment is received would be premature.
How to make a hierarchical appeal in a French tax audit
The request is made in writing and sent to the auditor’s superior, the divisional or principal inspector (inspecteur divisionnaire ou principal), whose contact details appear on the notice of audit. It must clearly set out the points of disagreement, the taxpayer’s arguments and the supporting evidence. A well-documented request with sound legal arguments is far more effective than a mere expression of dissatisfaction. If significant disagreements remain, the taxpayer can then refer the matter to the liaison officer (interlocuteur) designated by the director, within thirty days of receipt of the report on the hierarchical appeal.
What does a hierarchical appeal achieve in practice?
A hierarchical appeal has several advantages. It provides a fresh look at the file from an official who did not conduct the audit work and who can assess the taxpayer’s arguments with more distance. It creates an additional record in the file, which can be useful if the procedure continues before the commissions or before the court. It can lead to the reassessments being dropped or reduced, thereby avoiding long and costly litigation.
How the hierarchical appeal fits with the other remedies
A hierarchical appeal does not exclude the other remedies: it can precede or accompany a referral to the advisory commissions (commission départementale des impôts directs et des taxes sur le chiffre d’affaires, commission départementale de conciliation) and, as a last resort, litigation before the court hearing the tax dispute (juge de l’impôt).
For assistance during a tax audit, see our dedicated tax audit lawyer and tax lawyer pages.
