The objection procedure is a legally regulated remedy with which you can take action against decisions of the tax office. As an appeal procedure, it is therefore subject to certain conditions and time limits. The objection procedure can lead to consequences which require an examination even before the objection is filed. The prospect of success is of course also related to the circumstances of the respective case. Regardless, knowledge of the objection procedure and of possible alternatives and complementary measures to the objection is an important prerequisite for success.

1. possibilities of redress

The appeal is generally the legally provided possibility to arrange for a change or annulment of a decision (administrative act) made by the authorities. The procedure for this in the tax code is also known as opposition procedure. However, the appeal procedure only covers the out-of-court aspect of the appeal. However, a court action usually occurs only after the conclusion of a preliminary objection procedure. The action as an instrument of remedy finds its corresponding regulation in the Financial Court Code.

The objection procedure consists of two possible measures: the objection and the request for suspension of execution which is optional. In the financial administration, however, one also knows an alternative in addition to the objection procedure: the so-called request for simple change.

1.1. Objection

The most famous remedy to take action against an administrative act by the tax office is the objection. By filing the objection, the tax office is informed that, for example, the tax notice issued requires a review. This may become necessary if the decision is partially or completely incorrect or if it has to be amended or cancelled in the present form for other reasons. On the basis of the objection, the tax office carries out the required examination. The most important prerequisite for lodging an objection with the tax office, however, is the observance of the objection period.

1.2 Suspension of execution

In addition to the objection, there is also the possibility to request a suspension of execution. This is to ensure that an open tax claim is suspended until clarification by the objection procedure, so that a payment can be omitted for the time being. However, it should be noted that the tax office actually agrees to the suspension. In addition, the tax office usually only gives consent to the suspension of execution if it is foreseeable that the objection will be granted or if the further payment obligation could constitute an undue hardship. In order to check this, a certain processing time is therefore understandably required.

As long as there is no consent, the taxpayer is therefore still obliged to pay the taxes imposed on him by the complaint. This must be taken into account in particular if the request is made shortly before the expiry of the opposition period. In this case, the tax office simply lacks the time to decide on a corresponding approval before the expiry of the payment period. Consent sent to the taxable person in good time before the payment deadline is therefore very unlikely. The consequences of such a risk are late payments and interest rates. Therefore, we recommend: always act early!

1.3. Request for simple amendment

However, in addition to the objection, there is another alternative to defend against a tax assessment. It is the simple amendment already mentioned. This application must also be submitted to the tax office. Here, too, the objection period must be respected. Unlike the objection, however, the law does not provide for the possibility of requesting a suspension of execution in the case of a simple amendment.

In order to provide a better overview, we present below the request for simple amendment in parallel with the two actual elements of the objection procedure. Even if the request for a simple amendment is legally outside the actual objection procedure, most of the conditions as they exist for the objection also apply to it.

2.1 Admissibility of objection or request for simple amendment

In principle, an appeal procedure in tax matters can only be used if it is directed against an administrative act on the part of the tax office. However, this is only one possibility, albeit by far the most important. In contrast, there are also criteria that exclude permissiveness. The most significant is the so-called objection decision, with which the tax office announces a negative decision on an objection.

In the event of an objection, it must still be noted that the taxpayer is complained with the administrative act. In other words, this means that it is disadvantaged by the previous administrative act. In most cases, this is a financial disadvantage. The objection is intended to remedy this situation. This also applies essentially analogously to the request for simple amendment.

While the objection can be filed on all aspects of a decision, the application of the request is limited to simple modification only to certain types of tax. But this also includes the most common ones, such as income tax.

2.2. What is the objection period during the objection procedure?

Probably the most important requirement to use the objection procedure is compliance with the objection period. According to § 355 AO, it is exactly one month and takes place after the announcement of the administrative act. The period shall always begin at 0.00 a.m. of the day following the day of notification. It ends one month later at midnight.

2.3 Jurisdiction in the inclusion procedure

The tax office which issued the defective administrative act is responsible for receiving an objection, a request for suspension of execution or a request for simple modification. However, if an objection is received by an authority other than the competent authority, it is sufficient that the tax office actually competent receives the objection before the expiry of the objection period. However, this only applies to the written or electronic transmission of the objection.

2.4 Form of objection

In principle, there is a requirement that an objection must be submitted in writing or in writing. This means that you either write the objection yourself, or that you speak in person at the tax office. The tax officer then takes over the formulation of the objection, which then only needs to be signed. If one sets up the objection itself, both dispatch as a document and electronic transmission are permitted.

Even if the word “objection” itself should be absent from the declaration, this is still recognized as an objection. The main thing is that the letter indicates the intention for this. This requires that the administrative act against which an objection is lodged is also actually mentioned in the objection. In addition, the objection may include a justification for either amending or repealing the administrative act. However, this is not a mandatory requirement. However, it can be helpful for the financial officer if he already knows in advance why the appeal was made. Since finance officials also have little time, this may have the positive side effect that the rest of the decision is then examined less closely. Further errors contained in the decision to the detriment of the taxpayer thus perhaps go unnoticed.

In contrast to the objection, the legislature has not laid down any precise rules on the form of the request for simple amendment. Thus, both personal and telephone requests are possible. However, it is important that the objection period is also respected here. Furthermore, the request must state the decision to be challenged and the precise reason for amending or revoking the decision.

3rd course of opposition proceedings

3.1. Opening of opposition proceedings

As already shown, one should be aware of the reasons for challenging an administrative act of the tax office. However, an objection is also admissible without justifying it. This can be a recommendation, for example, if you want to discuss the case with your tax consultant, but the objection period expires before the meeting date.

If you submit a request for simple change to the competent tax authority instead of the objection, it should mention the reason and the relevant tax assessment. Even more important is the fact that the taxpayer still has to pay and thus has to pay his taxes. The prospect of success is therefore not a criterion that could remove an existing payment obligation.

3.2. Withdrawal of an objection

As long as the decision is examined by the tax office, there is the possibility to withdraw the objection. Such a step can also be taken without justification.

With the withdrawal of an objection, a possibly previously approved suspension of execution also expires. As a result, the taxpayer immediately has to pay again.

3.3 Effect of the appeal procedure

After submitting the objection, the tax office examines the entire administrative act. It is therefore possible that, in addition to the objected point, further errors are noticed during the examination. This can therefore also be to the detriment of the taxable person. This is called an aggravation. However, in such a case, the law provides that the taxpayer is informed. He is thus given the opportunity to withdraw the objection. If he does, then the decision remains unchanged.

In contrast to the objection, the tax office only examines the aspect requested in the application for a simple change. Even if, coincidentally, another error in the notification should be noticed, no change in this point comes into question. An esterification is thus excluded.

3.4 Outcome of the appeal procedure

3.4.1. Remedy decision

If the tax office finds errors in the review of the complaint, it has to change them. A so-called remedy decision informs the taxpayer about the success of his request. At the same time, the complaint loses its validity. Instead, the remedy decision takes its place. The content of the remedy may also affect the taxable person's obligation to pay. If the taxpayer as complainant does not raise any further complaints, the objection procedure ends.

In certain cases, a legitimate objection or a request for simple modification may result in the objection resulting in the cancellation of the entire administrative act. Here too, the taxpayer receives his own notification from the tax office. The annulment decision is of course also a potential objection, so that here again an objection or a request for simple change is possible.

3.4.2. Objection decision

If, however, the tax office considers that there is no reason to amend or cancel the administrative act in the event of an objection, it informs the taxpayer by objection decision. Although the objection decision is also an administrative act, the law excludes further out-of-court appeal proceedings against an objection decision. The appeal decision therefore ends the out-of-court appeal procedure. In order to achieve further changes, only the path of a complaint before the competent court remains.

4. Legal possibilities following the objection procedure

If the appeal decision does not lead to a positive result, only the way remains through the courts. In tax matters, the locally competent tax court is charged with the factual clarification. This is the first instance. The second and last regular authority is the Bundesfinanzhof (BFH), which operates at national level. It is based in Munich. However, a claim before the BFH is only admissible if the tax court allows a revision in its judgment. In the opposite case, you can submit a complaint to the BFH to clarify whether it considers a revision to be admissible. However, authorisation to review presupposes that it is a matter of general interest. This is therefore unlikely in very specific individual cases. By the way, this also means that both the taxpayer and the defendant tax office can seek a revision.