Hanna Filipczyk
The elements of negotiation in disputes between taxpayers and tax authorities
Summary
The purpose of this paper was to show that from the perspective of both law and practice the disputes between tax authorities and taxpayers can have significant features of a negotiation process. In this ‘negotiation without negotiation’ – since without calling it officially so – it is desirable to adopt integrative strategy (‘win-win’). This strategy assumes that it is possible to find a solution to the conflict of differing interests that will be beneficial for both parties.
The legal nature of the tax proceeding does not preclude conducting negotiation within it. Launching negotiation is reasonable where the subject matter of the dispute is complex enough for a tax authority to perceive its resolution as ambiguous, and where dealing with the case amicably and favourably for a taxpayer allows to meet the interests of a tax authority (and an officer responsible for the case) to the extent not lesser than they would be satisfied should the case be dealt with otherwise.
In the disputes of this kind it is worthwhile to comply with the (appropriately adjusted) four propositions for negotiating, as formulated by R. Fisher, W. Ury, B. Patton – the authors of the ‘principled negotiation’ model. It is crucial in particular to identify the interests of a tax authority (an officer) and address them (overtly or covertly) in the argumentation. In the paper the following were recognized as such interests: conformity of the taxpayer’s tax settlements with the law, securing the financial interest of the State Treasury, keeping the image of a ‘good officer’ in one’s perception and the perception of others, ensuring personal security, maintaining the good relationship with a taxpayer. It results that reasons used in tax disputes (in the adopted typology: ad rem arguments, arguments from authority, arguments from the ‘good taxpayer’, arguments from consequences of the negative decision) are corresponding with these interests – according to the pattern proposed in the paper.
The positive result of a negotiation between a taxpayer and a tax authority is an agreement satisfying both parties, subsequently framed officially as a tax decision. Still, even its negative outcome does not render unrewarding the efforts made – for the process itself offers some benefits to the party.
The procedure based on settlements (negotiations) is envisaged in the draft law “General rules of the administrative law”. According to the draft institution of the administrative agreement is to be used also for tax cases.
Appreciating a dispute with a tax authority as a negotiation game and using within it the tools worked out in the theory and practice for this game promotes effectiveness of the taxpayer’s strategy and enhances his chance of winning the case.