Tax Inspection: Key Functions, Official Documentation, and Record Classifications

Functions of Tax Inspection

The essential purpose of tax inspection is research and evidence: investigating the facts of tax liability for the discovery of those ignored by the administration, and verifying the correctness of declarations submitted by taxpayers. Alongside these fundamental research and testing functions, the inspection also develops a series of functions listed in Section 141 of the LGT.

Documentation of Inspection Measures

The documents that support the actions of the inspection may be of several types, with their definitions laid down in the RGIT:

• Records (Actas): These formal documents are extended during the inspection procedure to document all facts or circumstances relevant to the service, as well as declarations from the person or persons under inspection. They reflect the outcome of verification and investigation proceedings, and in any case propose to regularize the taxpayer's situation, tax withholding rights, or declare them. The substance of these records is the proposed resolution.
• Communications: These are the means through which the Inspection relates to individuals in the exercise of its functions. The most significant is the requirement. Examples include warnings issued during the inspection procedure, which can be directed at taxpayers.
• Reports: Unlike records and communications, reports do not express a declaration of will. These reports are issued ex officio or at the request of others. They are mandatory when required by the Administration or other public authorities necessary to implement taxes, in which case they justify the appropriateness of their issuance.

Types of Tax Inspection Records

Tax inspection records can be categorized as:

• Records with Agreement: These are the result of negotiations between the Administration and the taxpayer. This type of record functions as a form of transaction. It may address specific points rather than all elements related to the record, while still respecting the principle of unavailability of the tax credit.
• Conformity Records: These records state that the taxpayer explicitly concurs with the facts and the proposed adjustment outlined in the record.
• Non-Conformity Records: These are records in which the inspected party expressly disagrees with the content of the record and fundamentally with the draft resolution contained therein. This category also includes cases where the party refuses to sign the record. In any case, express or implied disagreement will be explicitly reflected in the record.