Capital Gains Tax Assessed Without Pre-Assessment Review Overturned by the Supreme Court
By directly contesting the procedural defect before reaching the merits, we brought down the tax assessment itself.
Background Facts
The tax authority assessed capital gains tax on the client's transfer of real estate.
The disposition was made without granting the opportunity for a pre-assessment review.
The first and second instance courts focused their judgment on the substantive taxation requirements and dismissed the claim.
Jeongpyeong's Assistance
At the appellate stage before the Supreme Court, we narrowed the issue down to the single point of procedural illegality.
We established, through case law and legislative history, that the pre-assessment review procedure is an essential process for protecting the taxpayer's right of defense.
We proved, using materials on the circumstances of the disposition, that the case did not fall within any exception permitting omission of the procedure.
We also submitted academic theories and precedents concerning the effect of procedural defects on the validity of a disposition.
Outcome
The Supreme Court reversed the lower court's decision and cancelled the tax assessment.
This was a case where the decision to narrow the issues in dispute made the difference.
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