There are situations whose tax classification is deeply controversial and therefore the legal situation is opaque. Nevertheless, tax return forms primarily do not ask for individual facts, but sum information. However, these are already the result of an individual subsumption process that concerns an opaque legal situation. In order not to expose oneself to the charge of tax evasion in such cases, there is a lot to consider when submitting the tax return. Therefore, we will explain to you how to submit your tax return correctly.

In order to justify tax evasion, the taxpayer would have to have provided inaccurate or incomplete information in his tax return. He would therefore have objectively misled the tax office. This can mean any explanation that is objectively contrary to the truth. The object of this misleading can only be facts. Such are defined as present and past events accessible to proof. Therefore, value judgments and expressions of opinion are not covered.

If a tax return is now filed in an opaque legal situation, the own legal opinion or the personal subsumption result is presented via the classification of the facts. This is basically only an expression of opinion. Nevertheless, a legal opinion can also be suitable for causing errors. For example, the legal opinion can be understood to mean that the existence or non-existence of facts is falsely explained. In contrast, the same is to be understood as a disclosure of facts.

Therefore, it is of considerable importance how the explanation is to be understood (interpreted). The recipient of the statement must therefore assess whether the statement is to be divided into a core of opinion and a core of fact or is to be recorded only as an expression of opinion.

It is clear that the taxpayer does not explicitly provide incorrect information when assessing the tax situation. Rather, he can at best explain facts implicitly wrong. Therefore, it can only be an implied deception.

This is when the recipient is allowed to attach an explanatory value to the message that does not correspond to reality and that is facts. Whether he is allowed to do so must be assessed on the basis of the objective recipient horizon of the recipient, taking into account the circumstances of the individual case.

A subsumption result is not incorrect if it is at least acceptable. A result is acceptable according to a view at least if it is not merely an outsider opinion that is not recognized in general literature. However, tax evasion would then be limited to those cases in which the taxpayer explicitly lies to the tax office about facts, since almost every tax subsumption result can be represented methodically.

A further understanding therefore considers incorrect declarations as already present if the taxpayer deviates from the highest court case law in his tax return. However, the taxpayer is allowed to work towards a change in supreme court case law. In particular, the supreme court case-law is never established.

Incorrect information is therefore only accepted if the taxpayer takes a different view from the supreme court case-law and the opinion of the tax administration and this leads to omission of factual information that would be relevant for the subsumption of the other legal view.

Ultimately, however, everything can somehow be relevant for taxation. It is therefore important when taxpayers have a duty to disclose certain facts.

From § 90 (1) sentence 2 AO, case law has derived a disclosure obligation. This exists in relation to facts whose legal relevance is objectively doubtful. Legal doubtfulness is assumed if the taxpayer wishes to deviate from guidelines of case law, guidelines of administration or a regular assessment practice. Depending on what is to be deviated from, the disclosure obligation is further specified.

3.2.1. Tax return correctly if deviating from jurisdiction

The taxpayer must, in addition to his personal opinion, provide information on the facts required for the deviating subsumption according to guidelines of the case law of the Bundesfinanzhof (BFH). Such a guideline in case law is to be assumed in particular if the BFH has decided a legal question and other federal courts do not deviate from it.

Obiter dicta of a federal court are not yet suitable for shaping the recipient horizon of the financial authority, because the contents expressed there can sometimes contain aberrant and immature opinions. However, if the case-law has created a clear and recognizable prejudice for the explainer, the explainer is reasonable to make corresponding statements in his tax return.

The administration announces its legal opinion in different modes. The Federal Ministry of Finance (BMF) may issue instructions to its civil servants in the form of letters from BMF in accordance with Article 108 (3) sentence 2, Article 85 (3) GG. This is intended to ensure uniform and uniform tax enforcement in the federal territory. They are published in the Federal Tax Gazette I. Therefore, they are administratively binding and recognizable and retrievable by the taxable person.

In addition, the BMF gives instructions for dealing with the highest court case law of the BFH. This is done by publishing in the Federal Tax Gazette Part II, in consultation with the highest financial authorities of the provinces, those decisions which are to be applied by the officials of the financial administration beyond the individual case. If the BMF and the supreme financial authorities decide not to apply a judicial decision beyond the individual case, the decision is published in the Federal Tax Gazette II and evidenced by a non-application decree in the Federal Tax Gazette I. The reasons for such a non-use decree are manifold. The primary issue, however, is that the tax administration wants to exclude a BFH argument that is detrimental to it.

Sometimes it is argued that primarily the publications in the Federal Tax Gazette should be decisive. The reason for this is that the explanation horizon of the tax authority results from the abstract-general announcement in the Federal Tax Gazette.

But even then it is not clear to the taxpayer what the recipient horizon should concretize, since administration and jurisdiction do not have to coincide. Ultimately, an administrative opinion can also be rejected for the first time by the decision of a tax court or the Federal Finance Court. It also happens regularly that BMF letters contradict each other in content. Apart from the publications in the Federal Tax Gazette, the taxpayer is also confronted with guidelines and instructions, which are published by the Federal Government with the approval of the Federal Council. Include orders of the chief financial directorates, as part of the administrative opinion. In addition, it is possible that the tax administration has not yet taken a position on a legal issue.

3.2.3. Correct tax return in case of deviation from regular assessment practice

The third category of objective doubtfulness, which then establishes a duty of disclosure, lies in the deviation from the regular predisposition practice. However, there should be overlaps with the administrative guidelines, as these basically justify the regular investment practice. However, in addition, a regular investment practice could be acceptable. In addition, tax authorities often assess tax issues differently from the guidelines. The investment practice of one or more financial authorities need not be congruent with the conduct of the decisive financial authority.

The decisive factor is therefore the relationship between the case groups.

According to § 150 paragraph 7 sentence 1 AO, tax return forms, which can be transmitted according to officially prescribed data set, contain an input field. There, the taxpayer can draw the clerk's attention to his legal opinion. In doing so, he can provide additional information, in particular on the own legal concept or the economic substance of a company, in order to avoid potential penalties.

However, it is controversial whether there is a duty to use the text field and whether infringements have criminal consequences. The financial administration assumes that the use of the free text field is mandatory. However, the wording of § 150 paragraph 7 sentence 1 AO does not imply any obligation for the taxable person. Rather, the administrative provision stipulates that the taxpayer should also be granted legal hearing within the framework of the tax return form within the meaning of § 91 AO. Therefore, the taxpayer does not provide incorrect information if he omits the free text field.

The taxpayer also meets the disclosure requirements if he submits an accompanying letter to the completed reference field. Regularly, accompanying letters are more suitable for revealing information due to the limited text field.