Proposed tax reassessment: how can you defend your position effectively?

Receiving a proposed reassessment (proposition de rectification) means that the tax authorities intend to adjust the taxable amounts you have declared. This step does not, however, in itself result in the tax being definitively assessed: on the contrary, it opens an essential phase of dialogue with the tax authorities.

The adversarial reassessment procedure is the standard framework where the tax authorities identify an understatement, an inaccuracy, an omission or a concealment in the information used to calculate the tax. Its defining features are precisely the existence of a dialogue between the taxpayer and the tax authorities and a number of procedural safeguards.

What matters, therefore, is not to regard the proposed reassessment as a mere notification to be endured.

The first few weeks after receipt are decisive for analysing the grounds relied on by the tax authorities, identifying any weaknesses in their reasoning and building a response that is well argued in law and in fact.

1. Proposed reassessment: understanding precisely the adjustments envisaged

A proposed reassessment must be adequately reasoned

The adversarial reassessment procedure is initiated by notifying the taxpayer of a proposed reassessment.

This document serves a twofold purpose: it informs the taxpayer of the adjustments envisaged and opens the dialogue with the auditing department.

The tax authorities must set out sufficiently clearly the nature, grounds and amount of the adjustments they envisage.

Article L. 57 of the French Tax Procedures Code (Livre des procédures fiscales, LPF) requires reasoning that enables the taxpayer to understand the legal and factual elements relied on against them and to take a position in full knowledge of the facts.

The initial analysis must therefore address both the substance of the reassessment and the lawfulness of the proposal itself.

Insufficient reasoning, poorly established facts, a questionable legal characterisation or a contestable method of calculation may each provide grounds for defence.

The taxpayer has a set period in which to submit observations

The proposed reassessment must state the period within which the taxpayer may respond.

This period is in principle 30 days and may be extended by a further 30 days at the taxpayer's request.

This time should be used to analyse the whole file: the documents relied on by the tax authorities, the provisions cited, the applicable case law, the consistency of the calculations and the financial consequences of the adjustments.

Failure to respond within the time allowed has the same effect as acceptance of the proposed adjustments. Conversely, the taxpayer may submit observations contesting all or part of the adjustments.

Responding therefore does not simply mean expressing disagreement. It is necessary to demonstrate, point by point, why the adjustments should be withdrawn or reduced.

2. The taxpayer's observations: the adversarial dialogue may lead to the adjustments being withdrawn

The response to the observations is a decisive stage

Where the taxpayer submits observations, the tax authorities are bound to examine them and to respond.

They may accept the arguments put forward and withdraw all or part of the adjustments envisaged.

If they maintain their position, they must give reasons for their rejection in a response to the taxpayer's observations, generally issued on form no. 3926.

At each stage of the written procedure, the tax authorities must also state the amount of the duties and penalties resulting from the adjustments they maintain.

This phase therefore makes it possible to measure precisely the points on which the tax authorities are prepared to reconsider and those on which the disagreement persists.

A persistent disagreement opens new avenues for discussion

Receiving an unfavourable response to the observations does not necessarily bring the discussion to an end.

The taxpayer may request a review by the inspector's line manager and then, where appropriate, by the departmental liaison officer (interlocuteur départemental).

These appeals must be made within strict time limits: in particular, the hierarchical appeal must be requested within 30 days of receiving the response to the taxpayer's observations.

This phase offers a fresh opportunity to present the case at a different level within the tax authorities and to revisit the points of disagreement that remain.

It should therefore be approached not as a mere formality, but as a genuine stage of negotiation and defence.

3. Tax commissions: pursuing the challenge before the tax is issued for collection

Certain disputes may be brought before a commission

Where the disagreement persists, certain questions may be referred to a specialised commission.

Depending on the nature of the dispute, this may be the departmental or national commission for direct taxes and turnover taxes, the departmental conciliation commission or the advisory committee on the research tax credit.

The departmental commission for direct taxes and turnover taxes deals in particular with certain questions of fact relating to business profits, turnover, remuneration and certain provisions and expenses.

Its opinion is not binding on the tax authorities, but its involvement can have a significant influence on the subsequent course of the case and on the burden of proof in any later litigation.

The strategy must be built from the moment the proposed reassessment is received

The adversarial reassessment procedure ends, in particular, with the acceptance of the adjustments, the rejection of the observations where no commission is involved, or notification of the opinion delivered by the competent commission. The tax authorities may then issue the additional assessments for collection.

The quality of the defence developed during the adversarial phase is therefore decisive.

The involvement of a tax lawyer makes it possible to analyse the lawfulness of the proposed reassessment, to verify the legal grounds relied on by the tax authorities, to reconstruct the facts where their presentation is open to question and to draft precise, reasoned and well-supported observations.

It also makes it possible to identify the remedies that may be pursued, to prepare the exchanges with the line manager or the departmental liaison officer and, where the conditions are met, to refer the matter to the competent commission.

The firm supports taxpayers from the moment they receive a proposed reassessment, building a defence strategy tailored to each head of adjustment and deploying the procedural safeguards available before the tax is issued for collection.

The aim is to turn the adversarial phase into a genuine space for defence, in order to secure the withdrawal or reduction of the adjustments wherever the legal and factual arguments allow.