If you work or intend to work in Tax Law, you should already know how important defending the taxpayer is in the administrative tax process.

This is because, every day, the Public Administration carries out the practice of "administrative acts" of tax assessment. 

That is to say: 

• "Joãozinho bought a house, he will pay property tax";
• "Maria received a million-dollar donation, she will have to pay inheritance tax."
• "Antônio bought a car, he will pay vehicle tax."

Taxes are levied on the manifestations of wealth of the taxpayer. And the Public Administration, acting to protect the public interest, carries out the assessment and notifies taxpayers for the payment of taxes.

However, when a citizen feels harmed by an act committed by the Public Administration, in accordance with the law, they can initiate self-control over that act, requesting its review in order to correct the illegality present in it. 

In general terms, one of the structural foundations of the tax administrative process is the principle of legality, which holds that the Public Administration can review its own acts, annulling them, when it finds any illegality in them. 

Want an example? Imagine that Antonio didn't buy a car. He's using a borrowed car owned by Ana. Therefore, the responsibility for paying the IPVA (Vehicle Property Tax) falls on Ana, the vehicle owner. If the tax authorities notify Antonio to pay the IPVA, he can defend himself through an administrative tax process.

The purposes of the tax administrative process

In this way, we can say that the purpose of the tax administrative process is to protect the interests of those subject to administration (taxpayers) who suffer arbitrary or illegal measures from the Public Administration when a tax or tax penalty is mistakenly levied.

In other words, when a taxpayer files a petition challenging the improper assessment of a tax, they either do not want to be taxed or are resisting taxation.

Through this challenge, the Public Administration exercises self-regulation, which is a public and non-negotiable right. Furthermore, the possibility of self-regulation by the Public Administration is enshrined in the content of Precedent 473 of the Supreme Federal Court.

"The administration may annul its own acts when they are flawed by defects that render them illegal, because no rights originate from them; or revoke them for reasons of convenience or opportunity, respecting acquired rights, and reserving, in all cases, judicial review."

In practice, if the taxpayer's defense is unsuccessful in the administrative tax process, they may seek judicial protection. That is, they can challenge the non-applicability of the tax or penalty in court. 

The possibility of judicial review 

The administrative tax process, carried out by the Public Administration, is not capable of forming res judicata, that is, deciding something definitively. This, in fact, is one of the functions of judicial activity.

It's always good to remember Administrative Law classes: we don't adopt the French model, where there is res judicata in administrative matters. We actually adopt the model of judicial review of administrative acts.

It is important to mention that the Superior Court of Justice has already stated that: "due to the discretionary power of the administration, not all issues relating to administrative acts can be analyzed by the Judiciary".

This issue is of essential importance to tax administration practice, since the lawyer can use the concepts of mandatory or discretionary administrative acts to challenge a particular tax. 

In general, the Judiciary is limited to analyzing the legal requirements for the validity of an administrative act, but it can also analyze administrative principles, such as the principles of reasonableness and proportionality.

The principles of the tax administrative process

The principles guide those who undergo the tax administrative process in determining the best course of action to take in a specific case. 

The correct application of the principles of administrative procedure is indispensable, since it is through this procedure that the tax assessment is questioned, allowing the taxpayer the possibility of presenting their reasons.

to avoid the application of a specific tax/penalty.

The material truth

In tax administrative proceedings, the old adage "what is not in the records does not exist in the world" does not apply. This is because the Public Administration is not bound by the truth of the records.

In the tax administrative process, the Public Administration can and should investigate beyond the information gathered by the taxpayer in the process, seeking the fair application of the tax law.

Due process of law 

As one of the guiding principles of the Democratic Rule of Law, the principle of due process must be observed without exception.

The unfolding of this principle is the respect, in the course of the tax administrative process, for the right to a full defense and due process.

By following these guidelines, it will be avoided that either party in the litigation will be surprised by behaviors that lack constitutional or legal support. 

It is worth mentioning that due process of law has a constitutional basis, within the list of fundamental rights and guarantees ( article 5 of the Brazilian Federal Constitution of 88 ). Observe the constitutional rules:

• No one shall be deprived of liberty or property without due process of law (article 5, item LIV of the Brazilian Federal Constitution of 88). 

• Litigants in judicial or administrative proceedings, and defendants in general, are guaranteed the right to due process and full defense, with the means and resources inherent to it (item LV of article 5 of the CRFB/88).

Practical application!

Based on these constitutional principles, the Supreme Federal Court deemed unconstitutional Article 33 of Decree 70.235/1972 (ADI 1.976), which provided for administrative listing and a 30% deposit of the debt amount as a security deposit.

The issue even led the Supreme Court to issue Binding Precedent No. 21 , which states: "The requirement of prior deposit or listing of money or assets for the admissibility of an administrative appeal is unconstitutional."

What happens if this ruling is disregarded? 

The taxpayer may file a Constitutional Claim, expressly authorized in Article 998 of the Code of Civil Procedure .

Furthermore, it is not uncommon for Constitutional Complaints to be filed with the Supreme Federal Court due to non-compliance with the precedent. Note:

"The requirement to pay fees or charges for filing an administrative appeal is a matter that does not strictly adhere to the understanding embodied in..." Binding Summary 21“, (Rcl 50.859 AgR, rel. min.  Alexandre de Moraes, 1st Chamber, judgment of 14-2-2022, Official Gazette No. 32 of 18-2-2022).

Having knowledge of the problems and appropriate remedies for practice in the tax process makes your legal practice an authority on the subject. Furthermore, it generates greater client confidence in the lawyer, who needs an effective solution.

And here's my advice: deepen your studies in Tax Law!

Don't stop studying! A specialization in tax law is essential for your professional development. You'll see how many more job opportunities will open up for you.

With IDP's specialization, online classes (and even better, live classes), for example, you will be able to do thorough reading on complex tax law topics and have your questions answered by professors who are experts in tax credit recovery.

I often say that specialization is the gateway to establishing authority in the tax administration process. With it, you can work in large firms, prepare legal opinions in highly complex cases, and become a prominent figure in the legal profession.

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