Ask a tax advisor on the topic of Profit and loss statement

Tax audit

May 17, 2011 | 30,00 EUR | answered by Dipl.BW/SB Ulrich Stiller

Dear Sir or Madam,
I operate a small trade in building components and I had a tax audit in March. The reason for the audit was that the tax office deemed my markup on the sale of my goods and services to be too low. The tax auditor then simply doubled the profit that I had declared in my profit-loss statement and calculated the additional payment based on that. Supposedly, there is a table that the tax office follows for this. I have since obtained a copy of this table. However, it cannot be right for the tax office to dictate a factor to a business owner. It should be up to me to determine how much I sell my services and goods for. The auditor did not find any major errors during the audit, except for a few minor details that he removed as expenses from the profit-loss statement. But that would not have been a problem. He only noted that I had not marked up the purchase price enough for the tax office. He did not care that I would not get any orders otherwise. In this context, I also mentioned that I can work with a lower markup because my wife supports the family. When I compare the actual profit and the one determined by the auditor, I have worked almost exclusively for the tax office in 2007, 2008, and 2009. This approach cannot be right. What can I do now? Do I have to accept this dictatorial behavior of the tax office? I have already lodged an appeal, but a solid justification is still pending. Perhaps a specialist can help me in this regard. If you require the report and the profit-loss statements, I would be happy to fax them to you.
Thank you.

Dipl.BW/SB Ulrich Stiller

Dear client,

Thank you for your inquiry, which I would like to answer based on the information you provided and in the context of your commitment in an initial consultation as follows:

You should not accept this. Therefore, it was correct to file an objection against the amended notices.

However, filing an objection does not prevent the due date for the additional payment amounts indicated in the amended notices, which are due within one month of the notice being issued. In addition, you must also apply for a postponement of the enforcement of the notices. Based on this request, the tax office must suspend the enforcement of the notices if there are serious doubts about their validity. Therefore, you must first establish to the tax office that there are serious doubts about the notices.

In order to successfully challenge the tax office, the audit report and the filed tax returns with profit determinations are needed for review, as the auditor cannot simply apply the administrative standard rates without restriction.

You can send the documents to me via fax at 07152/22709 or to my email address StillerStB@gmx.de.

Best regards,

Ulrich Stiller
Tax consultant/Diploma in Business Administration