In 2020, the tax audit brought in 8.2 billion euros, according to the General Directorate of Public Finances (DGFIP). This is 3.5 billion less than in 2019, when the tax audit brought in 11.7 billion. This decrease is explained above all by the health crisis, which delayed control operations, and not by French people better informed of the techniques of tax officials to identify errors or omissions.
In France, the tax audit can be triggered in the event that the taxpayer does not declare a declaration or if the declaration does not correspond to the declarations of organizations such as Urssaf or Pôle emploi. The control can also take place following a denunciation to the administration. If the administration finds omissions or errors in the declaration, it can also carry out a tax audit.
In the Figaro, Olivier Rozenfeld, chairman of the Fidroit group, and Arnaud Tailfer, tax lawyer at the Arkwood firm, unveiled the points particularly scrutinized by Bercy agents.
1 / Large family loans and pensions for adults
Family loans exceeding 5,000 euros, and not registered with the tax service, tend to be considered by the tax authorities as disguised donations. Likewise, paying child support to adult children can be misinterpreted.
“If you give him 2,000 euros per month when he already has a small income, the administration will never consider that it will be deductible. From the moment the child receives the equivalent of a monthly minimum wage , the tax authorities judge that the sums you pay them exceed their essential needs “, warns Arnaud Tailfer to the Figaro. The payment of alimony is deductible from income only if the child is in a state of necessity.
2 / The early transmission of assets
Another frequent technique to anticipate the transmission of heritage: giving bare ownership of real estate to one’s children while retaining the usufruct. This allows children to become full owners upon the death of their parents. But one should not live in the dismembered property during the lifetime of his parents, unless a rental contract and payment of rent are provided. “Otherwise, the administration quickly fell on you, considering that you did not give only the bare ownership, but the totality of the property; and that it is therefore a disguised donation”, warns Arnaud Tailfer.
3 / The display of wealth inconsistent with income
Bercy agents use various techniques to ensure the compliance of tax declarations: cross-checking of declarations, scrutinizing social networks, reading the press … Too much display of one’s wealth can therefore quickly attract the expert eye of the tax administration . “30% of the checks follow the identification of a lack of consistency between the standard of living and the declared income”, recalls Olivier Rozenfeld.
Suspicious income variations from one year to another also challenge the tax authorities. “Someone who would find himself for example overnight with strong real estate income without declaring tax on real estate wealth could only arouse the suspicions of the tax authorities”, considers Olivier Rozenfeld.
4 / The obvious vagueness of the use of real estate
If the sale of your main residence drags on after your departure from it, the tax authorities may call into question the qualification of “main residence”, and therefore the absence of expected capital gain. Likewise, when selling the property, you must clearly indicate whether part of your house was used for professional purposes (in the case of teleworking, if rent is paid in order to generate additional income and a charge for professional activity), at the risk of recovery otherwise.
Investors benefiting from the Pinel law must be particularly vigilant in respecting the income ceilings for tenants and the level of requested rents, imposed by the housing area. In the event of an adjustment, a penalty of 10% applies. Similarly, owning a property through a real estate company (SCI) does not allow a furnished rental.
5 / The application of reductions and discounts during an inheritance
We must also be careful not to reduce too much its tax on real estate wealth. “When we apply a succession of reductions and discounts, we arrive at values totally disconnected from reality”, points out Olivier Rozenfeld. However, the tax authorities are particularly vigilant on this point, in particular during the inheritance or the sale. Better to invoke the right to error in these cases, which removes the penalties.
6 / The non-declaration of online banks abroad
Finally, beware of online banks, whose headquarters may be located abroad. The tax administration requires that accounts opened abroad be declared on a specific form. If this declaration is not made, the taxpayer is exposed to a fixed fine of 1,500 euros over four rolling years.