The Treasury can only extend the scope of a limited verification if it is communicated before the deadline for allegations

The Supreme Court affirms in its resolution that it does not share the extensive interpretation made by the TSJ of the Valencian Community when it states that the term "prior" also allows this extension to be "simultaneous".

The second section of the contentious-administrative chamber of the Supreme Court (TS) has issued a ruling in which it establishes doctrine in relation to the limited verification procedures carried out by the Treasury. Specifically, it rules on when the Tax Administration can communicate to the verified the extension of the scope of a procedure of this type so that it is valid.

The room establishes that, in guarantee of the taxpayer's rights recognized in articles 34.1.ñ) and 137 of the General Tax Law (LGT), the Treasury may only extend the scope of its limited verification actions, motivated by reference to the specific case, when it is communicated to the verified "prior" to the opening of the period of allegations.

It adds that it will be "null, therefore, the final act of the management procedure of such class in which this extension has been agreed at the same time, or subsequent to, the communication to the verified of the granting of the period for manifesting and for make allegations to the liquidation proposal".

The court applies this doctrine to the specific case resolved in this judgment in which it upholds the appeal filed by a taxpayer who was notified by the Treasury in the pleadings process of the extension of a limited verification and the proposal for a provisional settlement.

This taxpayer appealed the resolution of the Regional Economic-Administrative Court (TEAR) of the Valencian Community on the settlement made in relation to the 2013 personal income tax before the Superior Court of Justice of the Valencian Community. The judgment under appeal dismissed the appeal and confirmed the settlement amounting to 15,327 euros, but annulled the sanction. He understood that said extension of the procedure occurred at the time of the opening of the period of allegations and not after it, which is vetoed by article 164.1 of Royal Decree 1065/2017, of July 27, which approves the regulation of the actions and procedures of management and tax inspection.

The Supreme Court affirms that it does not share the extensive interpretation made by the TSJ when it states that the term "prior" also allows that expansion to be "simultaneous".

It affirms that the adoption of an extension, considered as such by the Administration itself, "at the same time -not before- and on the occasion of revealing the file and giving a hearing, in the same act, on a liquidation proposal, does not it is limited to being a mere non-invalidating irregularity, as the Trial Chamber maintains and the State Attorney also alleges".

And this because "the infringement of article 164 RGAT does not imply a formal or procedural defect, it is not a defect of form, but a substantive infringement of the letter and spirit of the formal law, including the regulatory text itself that, by requiring the previous character, excludes any enlargement that was not. From this perspective, the previous cannot encompass the simultaneous, since both notions are not only different, but incompatible".