What procedure should a taxpayer follow when identifying errors in a previously submitted declaration, if the error led to an underestimation of the amount of tax payable, and what are the possible consequences of an untimely correction of such an error?
If an error is found in a previously submitted tax return that has led to a reduction in the amount of tax payable, the taxpayer should immediately take a number of sequential steps. Let's consider in detail the procedure for making changes and the consequences of possible avoidance of timely error correction.
Procedure of actions
Step 1: Establishing the presence of an error. The taxpayer must independently identify the error or receive a corresponding notification from the tax authority.
Step 2: Preparation of the clarifying declaration. A citizen or an organization is required to submit an updated declaration reflecting the correct indicators of tax obligations.
Step 3: Payment of the missing amount of taxes and penalties. If the amount of tax turned out to be underestimated due to mistakes, the taxpayer must pay the arrears together with accrued penalties for the period of late payment of the tax.
Step 4: Submit an updated declaration to the tax authority. The clarifying declaration is submitted to the same tax authority where the original reporting form was submitted.
Possible consequences of failure to comply with the obligation to make corrections
Failure to comply with the established procedure and deadlines for submitting clarifications entails adverse legal consequences for the taxpayer.:
- Imposition of a fine. For failure to submit an updated declaration within the prescribed period, liability is provided in the amount of 20% of the unpaid tax amount. If a deliberate violation is proven, the fine increases to 40%.
- Additional sanctions. In addition to the main fine, it is possible to hold a taxpayer accountable for concealing income or property used to calculate taxes.
- Verification activities. The presence of detected errors increases the likelihood of an on-site inspection by regulatory authorities.
- Arrest of current accounts. In extreme cases, the tax authorities have the right to suspend operations on the bank accounts of an organization or individual entrepreneur until the debt is paid off.
The obligation to independently identify and correct errors in tax reports is an important part of fulfilling a citizen's constitutional obligation to pay legally established taxes and fees. Timely elimination of errors helps to prevent negative consequences and minimize the risks of conflict situations with government fiscal structures.