FSV- what can the tax advisor do with it
FSV- what can the tax advisor do with it
Post posted on May 15, 2023 by:Ilse Engwirda
Tax Affairs I number 2 I May 2023
In 2020, it came to light that since 2012, the tax authorities had used a blacklist that included more than a quarter of a million people: the Fraud Signaling Facility (FSV). In it, the tax authorities registered various signals that could indicate tax or tax fraud. Registration in the FSV took place for many reasons, from a 'tip' from an angry ex to an FIOD investigation. The threshold for registration was low: an anonymous click letter, a mistake in a deduction, a donation to a mosque, it could just lead to registration, followed by stricter supervision. It has now emerged that the tax authorities acted unlawfully. Does an FSV registration offer opportunities for the tax advisor to oppose checks, returns and claims?thru mr. drs. E.G. (Ilse) Engwirda, Jaeger Lawyers and Tax Experts
In the context of combating fraud, the tax authorities used (and applies) selection rules, so that, for example, returns with certain deductions are selected for inspection (“ejected”). Until 2018, all returns that were thus selected were registered in the FSV, according to the Dutch Data Protection Authority's Inquiry Report. In the following years, the tax payer's returns were critically monitored. Research by PwC showed that, as part of the selection at the gate, for example, between 2014 and 2018, the tax authorities had classified donations to mosques as a fraud risk. When it comes to health care costs, high drug costs raised by taxpayers with a surname ending in -ic were considered a fraud risk. Applications for benefits were also selected for control based on selection rules and registration in the FSV could follow. In the childcare benefits, for example, people with dual nationality were additionally checked.
The people who purchased childcare at the childcare agencies and daycare centers that the Combiteam Approach Facilitators (CAF) investigated also ended up in the FSV.
Information from external sources was also included: reports from Report Crime Anonymous, from citizens, suspicions of fraud from the UWV, SVB, Public Prosecutor's Office, FIOD, Customs, etc. In short: from a tip from a vengeful ex or a request for information from a municipality in connection with social assistance, from a suspicion of too high a health deduction to a suspicion of large-scale tax fraud: it all led to registration in the FSV. A lot of information was added to the FSV without keeping track of who added information and why. Nothing was removed or corrected from it. Once registered, those who were registered were subject to intensive supervision by the tax authorities.
In fact, people got and kept the label of fraudsters.
After this came out via the media, the use of the FSV stopped on February 27, 2020. The Data Protection Authority published a devastating report in October 2021: the purpose of the FSV was unclear, stored information was often incorrect, kept for too long, and processing personal data in this way was unlawful. To avoid misunderstandings: not all information in the FSV was incorrect and a taxpayer's registration was not always accurate in itself. onrechtmatig.Dat raises the question: if someone came into contact with the tax authorities via an FSV registration and an assessment was imposed, is that an argument for the advisor to defend themselves? Can the appearance in the FSV be an argument for getting an attack off the track? What paths can the advisor then take to address this?
Control due to a signal in the FSV is allowed
Last year, the Supreme Court already outlined some principles for the elaboration of an entry in the FSV. The Supreme Court considered that it is not unlawful for the tax authorities to investigate a specific tax year after an audit for an earlier year found that deductions could not be substantiated. In other words: if, based on a signal in the FSV that something may have been wrong in a certain year, the reports are also checked in the following years, that's okay. Even, adds the Supreme Court, if the data about this is stored in a file (namely: the FSV) and that data processing is unlawful. Indeed, the legality of the inspector's decision to check a return is, in principle, not affected by how information about the taxpayer has been processed.
Unless: selection is a violation of a fundamental right
There is, however, an exception. If the audit results from the FSV or another risk selection and that selection involved a criterion that violates a fundamental right, such as discrimination based on origin, orientation or religious beliefs, the matter is different. Then the judge can conclude that the actions of the tax authorities “go against what can be expected of a properly acting government that the use of what was revealed during that audit should be considered inadmissible under all circumstances”. Then the assessment or additional tax is therefore off track. The Supreme Court refers to such a situation as an “exceptional case”.
How exceptional this has actually been remains to be seen.
Discrimination
It is obvious that certain (not all) registrations in the FSV have involved discrimination. For example, in its report on childcare benefits, the Data Protection Authority found that the use of nationality as an indicator in the risk classification model was discriminatory. The same applied to the use of nationality in detecting organized fraud. Research by PwC showed that FSV registered special personal data, such as ethnicity, medical data and a second nationality. PwC stated that there was a risk that, in the context of selection at the gate, the analysts will focus more on the characteristics of the taxpayer than on the tax risks. The Board of Human Rights found that in the 2014 survey population, people with a foreign origin were five times more likely to appear in FSV than people with a Dutch origin. Partly on this basis, the Board has formulated a presumption of discrimination and reversed the burden of proof. In case of complaints, it is up to the tax authorities to prove that there was no discrimination.
The practice
If the taxpayer states that there has been a violation of his or her fundamental rights, it is up to him or her to state that with reasons. For this purpose, it is sufficient if the taxpayer provides facts that suggest that there has been a distinction, the so-called reduced burden of proof (art. 10 AWGB).
The inspector must then provide the information that is important for assessing that claim, according to the Supreme Court. After all, it is the inspector who can still see what is found in the FSV. The taxpayer has only very limited information about this and depends on the tax authorities to obtain that information. In a recent case by the Arnhem-Leeuwarden Court of Appeal of 21 February 2023, the taxpayer requested a review of an earlier court ruling concerning registration in the FSV. According to the taxpayer, this registration is unlawful, so that the verification of the resulting returns is also unlawful. Therefore, the points revealed during that audit should not have led to a correction of the returns. In this case, the taxpayer did not substantiate that there was a violation of his fundamental rights. However, this issue was raised at the hearing. The inspector provided information about the reason for selection. This showed that when the IB/PVV 2015 attack was imposed, the position was taken that the taxpayer's antique shop was no longer a source of income, so that the loss suffered was no longer considered a negative income item. It was subsequently decided to also assess the 2016 through 2018 returns taking into account this position. This was not due to a violation of a fundamental right and the taxpayer's request to review the ruling was rejected. Even in similar cases, the argument that an FSV registration infringes a fundamental right and that an assessment should therefore be dismissed has not yet been successfully made.
Current case law shows that the taxpayer must not only properly argue that his registration in the FSV or risk selection that has been applied to him is a violation of his fundamental rights, but also that the audit took place on the basis of that unlawful registration or risk selection. We are waiting for the first success. One possibility is that the taxpayer also files a complaint with the College of Human Rights, and thus (hopefully) obtains the finding that he has been discriminated against by the tax authorities — to use that finding in further proceedings. notified and these taxpayers can receive further information about this. Registration in the FSV may be (was) a relevant factor in controlling and imposing an attack. That may be the novelty needed for a review. Has the taxpayer not previously opposed an assessment? Then it is possible to file an objection and, if necessary, appeal with an appeal for an excusable period (under art. 6:11 AWB). The reason for excusability is then that the taxpayer did not know that he was registered in the FSV and why. Finally, the taxpayer could also request an ex officio reduction. The way is open to file objections and requests to review judgments.
The chances of success do not seem great at the moment. In addition, it is of course necessary that the information that the taxpayer needs to demonstrate that there was a violation of a fundamental right should come from the tax authorities.
Source: Data Protection Authority, Tax Administration Research Report:
Processing personal data in the Fraud Signaling Facility (FSV), 29.10.2021, p. 16, 3;
PwC, Research queries at the gate, 16.03.2022, p. 25, 24;
Supreme Court 10-12-2021 (EAL:NL:HR: 2021:1748), including r.o. S.3;
Data Protection Authority, The processing of the nationality of applicants for childcare allowance, 16-7-2020, p. 3;
PwC, Research into the effects of FSV private individuals, 22.22-2021, p. 12, 3;
College for Human Rights, Preliminary investigation into the alleged discriminatory effects of the Tax Administration/Surcharges, 15.09.2022,
Arnhem-Leeuwarden Court 21.02.2023 (ECU:NLCHARL: 2023:1519),
Court of Amsterdam 21.02.2022 (ECLI:NLGHAMS: 2O 22:5 O4),
Court of The Hague 01-03.2022 (ECLI:NUGHDHA: 2022:308),
Court of Amsterdam 10.05.2022 (ECLI:NL:GHAMS:20223643) Act: art. 6:11 Awb and art. 10 AwgBbz2o23.33
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