Court scathing over the tax authorities: 'Can the judge still believe the tax authorities? '

Judges wonder whether they can still “believe and trust” the tax authorities. This is stated in a firm ruling in a case where a company has been wrongly chased by the tax authorities for years. The entrepreneur, who received four hundred blue envelopes, was right on all counts.

The ruling of the court in Arnhem-Leeuwarden is remarkable for several reasons.

First of all because of the judge's fierce words, but also because this time it's about the tax authorities themselves and not the Supplements department; the tax authorities are therefore hit in the heart.

It also appears that companies were also on the Fraud Signaling Provision (the controversial black list that underpinned the benefits scandal) of the tax authorities, and therefore not just people.

What is also striking is that the tax authorities still appear to be sticking to “the strict approach” until the hearing. Only when the court comes up with intrusive questions will the additional taxes be withdrawn.

The private company concerned in this case is owned by a couple who manage several companies. An employee of one of those companies was checked for possible fraud with a child's benefits. An inspector from the tax office in Emmen then decided in 2016 to also subject the owners of the BV to an audit.

What is the Fraud Alert Facility?

• The tax authorities kept a blacklist for twenty years.
• This data system included the data of citizens who (without evidence) were thought to be committing fraud
• It involved 270,000 citizens
• There was no legal basis for the system
• When assessing the risk of fraud, the tax authorities used ethnic profiling, so they looked at external characteristics and nationality.
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Couple chased by tax inspector for years with no proof

Who the employee is and who is the couple who ran the company is unknown. However, the ruling states that the tax authorities controlled expenses for “children with a partly foreign-sounding name”. The entrepreneur did not feel heard after filing complaints about the inspector due to discrimination.

According to the entrepreneur and his wife, the tax authorities assumed without substantive review that they were not in good faith privately, after which they were accused of gross fraud. For years, the couple has been chased for alleged wrong tax returns, for which there appears to be no shred of evidence. Deductions were not accepted, after which they received substantial additional taxes.

The entrepreneur and his partner declare to the judge that they received “four hundred blue envelopes” and that they have filed a hundred objections and appeals. “The physical and psychological stress and the misunderstanding of what happened to them are still taking their toll,” they say. One of them is under medical treatment with burnout symptoms and mental health problems.

See also: Tax authorities apologise to 240,000 blacklisted people

Inspector admits careless action

In May 2021, one of them received the message that they were included in the so-called Fraud Signaling Facility - the “black list”. The tax inspector acknowledged at the hearing that “careless action” was taken and understood that the “investigation was experienced as strict”. The tax office employee who carried out the audit was known to use “the strict approach”. He no longer works in that position.

During the hearing, there was a tough confrontation between the court and the tax inspector. The entrepreneur had requested the documents related to the FSV and also tax files, but he did not receive them. The inspector claimed that there was an inspection. But the documents were not shared during the hearing either.

The judges refused to go along with the inspector's claims. “The court asks whether the judge can still believe the tax authorities,” the judgment says. When the inspector replied that the attacks “are probably true”, the judges said: “The court asks if this is the case and asks again whether the judge can trust the tax authorities.”

The inspector, who did not come up with the evidence for the FSV alert, then suddenly said that the case “requires a solution” and was willing to quash additional tax assessments and “solve other tax cases as well”.

The court called the annulment of the additional taxes “a start”. The entrepreneur won the case on all counts and the tax authorities were ordered to reimburse the court costs, with the judge asking to be “generous”. The inspector then insisted that “no careless action was taken”, but admitted that “the big picture” does require “generous compensation”.

Leijten and Omtzigt ask Parliamentary questions about the ruling

MPs Pieter Omtzigt (Member Omtzigt) and Renske Leijten (SP) asked the Secretary of State for Finance questions about the ruling. Omtzigt wonders why the case was not appropriate sooner. “Four hundred blue envelopes, then you are not collecting taxes fairly, but destroying lives.”

SP'er Leijten, who, together with RTL News and allegiance brought out the existence of the FSV lists, calls it only “right” that the judge is now stopping the tax authorities. “With an endless series of motions, we are trying to force the tax authorities to provide people with information about those lists. They say they're doing everything they can, but that doesn't turn out to be the case at all. In fact, the files are not being released. That is now being rectified by the judge.”

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