LEGALITY OF PRESUMPTIONS IN TAX MATTERS

One of the most effective tools used by the tax authorities in the exercise of their powers to determine omitted taxes are the presumptionsThis legal figure was created to make it easier for the tax authorities to ascertain the facts that make it possible to determine the magnitude of the tax liability of the taxpayer, assuming new facts, derived from a known fact, that update the tax generating assumption.

Thus, the presumptions in tax matters are provided for in Articles 54 to 61 of the Federal Fiscal Code and the reality is that each precept could be analyzed in depth, by virtue of the scope it may have in the legal sphere of the governed; however, in this article we will only analyze the content and scope of article 59 (which establishes the grounds that give rise to the presumptions and applies generically to all taxpayers) and whether it truly respects the principle of legality. Now, before entering into the study of the matter, Article 59 establishes the following:

"Article 59. For the verification of income, of the value of acts, activities or assets for which contributions must be paid, as well as the updating of the hypotheses for the application of the rates established in the tax provisions, The tax authorities presushall, in the absence of proof to the contrary:

1. That the information contained in the accounting, supporting documentation and correspondence in the taxpayer's possession corresponds to transactions carried out by the taxpayer, even when they appear without his name or in the name of another person, provided that it can be demonstrated that at least one of the transactions or activities contained in such elements was carried out by the taxpayer.

1. That the information contained in the accounting systems, in the name of the taxpayer, located in the possession of persons at the taxpayer's service, or of shareholders or owners of the company, corresponds to operations of the taxpayer.

III. That the deposits in the taxpayer's bank account that do not correspond to records in his accounting that he is obligated to keep, are income and value of acts or activities for which contributions must be paid. For the purposes of this section, it is considered that the taxpayer did not record in his accounting the deposits in his bank account when, being obligated to keep it, he does not present it to the authority when it exercises its verification powers.

It will also be presumed that deposits made in a fiscal year, the amount of which exceeds $1,804,010.00 in the bank accounts of a person who is not registered in the Federal Taxpayers Registry or who is not required to keep accounting records, are income and value of acts or activities for which contributions are payable.

The provisions of the preceding paragraph shall not apply when, before the authority initiates the exercise of its verification powers, the taxpayer informs the Tax Administration Service of the deposits made, covering all the requirements that said decentralized body establishes by means of general rules.

1. Deposits made in personal checking accounts of managers, administrators or third parties are income and value of acts or activities of the company for which contributions must be paid, when they make payments of debts of the company with checks from said account or deposit in said account, amounts that correspond to the company and the company does not record them in the accounting records.

1. That the differences between the assets recorded in the accounting records and the actual stock correspond to income and value of acts or activities of the last fiscal year under review for which contributions are payable.

1. Checks drawn on the taxpayer's accounts to suppliers or service providers that do not correspond to transactions recorded in the taxpayer's accounting records are payments for goods purchased or services for which the taxpayer obtained income.

VII. (Repealed).

VIII. That the inventories of raw materials, semi-finished and finished products, fixed assets, expenses and deferred charges held by the taxpayer, as well as the land where it carries out its activity are owned by the taxpayer. The assets referred to in this paragraph shall be valued at their market prices or, in the absence thereof, at the appraisal price.

1. That the goods that the taxpayer declares to have exported were sold in Mexican territory and were not exported, when the taxpayer does not exhibit, at the request of the tax authorities, the documentation or information that proves any of the following assumptions:

1. a) The material existence of the acquisition operation of the good in question or, as the case may be, of the raw material and of the installed capacity to manufacture or transform the good that the taxpayer declares to have exported.

1. b) The means used by the taxpayer to store the good declared to have been exported or the justification of the reasons why such storage was not necessary.

1. c) The means used by the taxpayer to transport the good to foreign territory. In case the taxpayer has not transported it, it must demonstrate the conditions of the material delivery of the same and the identity of the person to whom it was delivered.

The presumption referred to in this section shall operate even when the taxpayer has the export customs declaration documenting the dispatch of the good".

In this sense, it is evident that the legislator established several facts that empower the authority to assume the fact generating a tax charge, without having to prove it reliably; consequently, the burden of proof is reversed to the taxpayer, who must discredit the presumption of the tax authority. However, the tax authority does have the obligation to verify that any of the circumstances set forth in Article 59 of this Law are present. to carry out the corresponding presumption.

Based on the above, the question we are interested in resolving in this article is the following: Any of the cases provided for in Article 59 (especially Sections I and II) allow the authority to justify the determination of a tax credit, regardless of whether it is a natural person or a legal entity?

As can be seen from the sections provided for in the referred article, most of them are based on a legal and material fact that allows the authority to ensure that the taxpayer's assets were affected, either by having received goods in kind; by having kept goods that were destined for export; or directly by cash flow. In other words, the authority is obliged to ascertain any of the following assumptions: a. that the taxpayer received undeclared income or, b. maintained assets that modify its net worth without having been taken into account to determine the tax base; therefore, regardless of the applicable assumption, the taxpayer's taxpaying capacity is modified.

However, the fractions I y II allow, based on the information contained in the accounting records of the taxpayer or third parties, to presume that it corresponds to transactions carried out by the taxpayer, which, in turn, empowers the tax authority to determine omitted taxes, since, if it is presumed that a certain transaction was carried out, this could trigger a tax generating event. However, Is this in harmony with the system of taxation of individuals for income tax purposes or is it sufficient to determine the respective tax?

It should be noted that individuals are taxed according to flow, which, in terms of Article 101 of the Income Tax Law, refers to the fact that income is accrued until the time it is actually received (as opposed to corporations) and therefore, income is accrued only when it is received, Until that time, they are obliged to pay the tax. The foregoing is reiterated in Article 6 of the CFF in the sense that, taxes are levied as legal or factual situations arise, as provided for in the tax laws..

Now, if we analyze the content of Sections III to IX of Article 59, they expressly state that the following shall be considered as a income the factual situation that each one foresees, unlike sections I and II, which only establish that, based on the accounting (in possession of the taxpayer or third parties) the authority may presume that these are operations carried out by the taxpayer, however, they do not foresee that based on this, income may be determined. Therefore, under the principle of strict tax law, the authority would not have sufficient powers to determine presumed income to individuals based on sections I and II.

The distinction is made between individuals and corporations because the latter accrue their income in a different manner and not necessarily until the consideration is actually received. Therefore, by way of example, if the tax authority notices that tax receipts were issued (which are part of the accounting records), regardless of whether they have been paid or not, the amounts stated therein are considered accruable income for income tax purposes. Therefore, in the case of legal entities (with the exception of corporations and civil associations rendering independent personal services, which, like individuals, are also taxed in accordance with the flow), the factual situations set forth in the first sections of Article 59 are sufficient for the authority to determine presumed income.

Thus, there is another fundamental reason (being the most important one) why the authority could not determine presumed income to individuals, based on sections I and II. This is so, because, no taxpayer is obligated to pay income tax on non-accruable income.Therefore, it would be insufficient for the authority to consider only the accounting information to determine presumed income, because even if an income is found in the taxpayer's accounting, if it has not been duly paid, there would be no obligation to accrue and therefore, the taxable event cannot be actualized. This is supported by the following isolated thesis issued by the Collegiate Circuit Courts:

"Digital registration: 2007660

Instance: Collegiate Circuit Courts

Tenth Epoch

Subject(s): Administrative

Thesis: I.7o.A.115 A (10a.)

Source: Gaceta del Semanario Judicial de la Federación. Book 11, October 2014, Volume III, page 2895.

Type: Isolated

PRESUMPTION OF INCOME ESTABLISHED IN ARTICLE 59, SECTION III, OF THE FEDERAL TAX CODE. ITS TEMPORAL SCOPE OF VALIDITY FOR THE DETERMINATION OF CONTRIBUTIONS CORRESPONDS TO THE MOMENT OF THE DEPOSITS IN THE TAXPAYER'S BANK ACCOUNTS. In terms of the first paragraph of the aforementioned provision, for the verification of income, of the value of the acts, activities or assets on which contributions are payable, the tax authorities shall presumeAccording to section III thereof, deposits in the taxpayer's bank account that do not correspond to accounting records that the taxpayer is required to keep, are income and value of acts or activities for which taxes are payable. Thus, the word "verification" could lead to consider that it refers to an instrumental aspect and that, therefore, in order to determine its temporal scope of validity, the moment in which this attribution is exercised must be taken into consideration; however, the valid reading of this first paragraph must be carried out in harmony with both section III indicated, as well as with section III, and with the first and second paragraphs of section 6 of the Federal Fiscal Code., which establish that contributions are incurred as legal or factual situations arise, and shall be determined in accordance with the provisions in force at the time they are incurred. Consequently, if in terms of article 59, section III, of the Federal Fiscal Code.The presumptive estimation of income and value of acts or activities is possible, and these are elements that will lead to the accrual of taxes; therefore, the temporal scope of validity of this last rule corresponds to the moment in which the legal or factual situations that lead to the accrual of taxes are actualized. presumptive estimate and subsequent causationThe taxpayer's taxable income, i.e., deposits in the taxpayer's bank accounts".

As a result, in order for the tax authority to determine omitted taxes payable by an individual through the figure of presumption of income in terms of article 59, it must demonstrate not only that any of sections I and II, if applicable, are met, but it would also be obliged to demonstrate that the taxpayer is located in any of the cases provided for in sections III to IX, Until that moment it could be affirmed that the taxpayer effectively received income and/or increased its patrimony and consequently, it is obliged to pay the corresponding tax, since, as previously mentioned, taxes are only levied when the legal or factual situations foreseen in the tax law are fulfilled, since, as previously mentioned, taxes are only levied when the legal or factual situations foreseen in the tax law are fulfilled. Laws tax. In other words, not all presumptions entail the accumulation of income in order to be able to apply the omitted taxes. The foregoing is supported by the following isolated thesis issued by the First Chamber of the SCJN:

"Digital registration: 161517

Instance: First Chamber

Ninth Epoch

Subject(s): Constitutional, Administrative

Thesis: 1a. CXL/2011

Source: Judicial Weekly of the Federation and its Gazette. Volume XXXIV, July 2011, page 306.

Type: Isolated

PRESUMPTION OF INCOME AND THE VALUE OF ACTS OR ACTIVITIES. ARTICLE 59, SECTION III, OF THE FEDERAL TAX CODE DOES NOT VIOLATE THE PRINCIPLE OF TAX PROPORTIONALITY. Although the aforementioned provision provides for the power to verify income and values of acts or activities through the presumption made by the tax authority, as well as a presumptive determination in relation to bank deposits not recorded in the accounting records, The fact is that it does not contain any provision in relation to the income accumulation nor with respect to the calculation of the tax payable, or with respect to the creditable value-added tax, as this is a matter for the respective lawsThe taxpayers shall be responsible for regulating the presumption of taxable income and the taxable income of the taxpayer, as provided in Article 90 of the Income Tax Lawand the reduction of the creditable amounts that are demonstrated, in accordance with the provisions of article 39 of the Value-Added Tax Law. Thus, the taxpayer will pay income tax according to his taxpaying capacityThe taxable income derived from bank deposits not recorded in its accounting records must be presumed to be taxable, and in relation to the value added tax, it will cover the tax on the amount of the value of acts or activities indirectly estimated and that entered its patrimony, being able to reduce the creditable amounts that it proves; from which it follows that the article 59, section III, of the Federal Fiscal Code.does not violate the principle of tax proportionality, as set forth in Article 31, section IV, of the Political Constitution of the United Mexican States.."

In this sense, it would obviously be insufficient for the tax authority to start from the information contained in the accounting records of the taxpayers (individuals) to determine presumed income; therefore, it is essential to first prove that the taxpayer received the income (through cash flow or in goods). alleged. Along the same line of thought, Article 101, second paragraph, of the Income Tax Law establishes the following in the relevant matter:

"Article 101. For the purposes of this Section, income is considered accruable income for the performance of business activities or for the rendering of professional services, in addition to those indicated in the preceding article and in other articles of this Law, the following:

(…)

Income determined presumptively by the tax authorities, when applicable in accordance with the Federal Tax Code, shall be considered accruable income under the terms of this Section, when in the fiscal year in question the taxpayer predominantly earns income that correspond to business activities or the provision of professional services.

For the purposes of the preceding paragraph, it is considered that the taxpayer receives income predominantly from business activities or the rendering of professional services, when such income represents in the year in question or in the previous year, more than 50% of the taxpayer's taxable income.

(...)"

By way of conclusion, given the nature of taxation of individuals, it can be affirmed that the presumptions set forth in sections I and II of Article 59 of the CFF do not generate the taxation of the tax, until the authority demonstrates that any of the other assumptions contained in said numeral is also present. In other words, the authority must demonstrate that the person's patrimony was positively affected and therefore, his taxable capacity, otherwise, there would be a violation of the guarantees of legality and legal certainty enshrined in the Supreme Law.