Taxpayer Rights Around the World (Part 2)

By on March 24, 2017

We previously posted on Day One of the 2nd International Conference on Taxpayer Rights in Vienna, Austria. Below, we summarize the panels and issues discussed on Day Two.

Four panels were held on March 14: (1) Penalties and General Anti-Avoidance Rules; (2) The Role of Intergovernmental Actors in Furthering and Protecting Taxpayer Rights: A Conversation; (3) Building Trust I: Transforming Cultures of Tax Agencies; and (4) Building Trust II: Safeguards on Tax Agency Power.

Penalties and General Anti-Avoidance Rules

This panel looked at current research on the use of penalties and general anti-avoidance rules in tax administration from the perspectives of legal and economic theory and taxpayer behavior. Studies were discussed that found that delayed feedback on tax audit often results in increased tax compliance but reduces the perception of procedural fairness and diminishes trust in the taxing authorities. Participants in the studies viewed receiving delayed feedback and increasing the probability of audits and the potential for more fines. One conclusion presented was that the delay resulted in longer periods of uncertainty and may yield higher levels of honesty in the short term, but might undermine tax compliance in the long term.

The Role of Intergovernmental Actors in Furthering and Protecting Taxpayer Rights: A Conversation

This panel includes representatives from the Organisation for Economic Co-operation and Development (OECD), UN Panel of Tax Experts and others discussing their roles in establishing, delineating and protecting taxpayer rights. Several current issues relating to tax compliance and court matters from the European Court of Justice were discussed, including issues relating to the amount of interest that taxpayers should be entitled to on refunds, the sharing of information from parallel criminal proceedings in civil tax proceedings, the use of fishing expeditions by government agencies to obtain information and limitations period issues in value-added tax cases. There was also a very informative discussion from a judge of the Federal Fiscal Court from Munich, Germany. She set forth views on rights that taxpayers should have in their tax disputes, many of which were similar to the United States Taxpayer Bill of Rights discussed in our previous post. Some additional rights announced were that final decisions should be clear and easy to understand (i.e., the public should know what the court means in its decision), taxpayers should be entitled to legal aid if they cannot afford representation and precedent should be followed by the courts and taxpayers.

Building Trust I: Transforming Cultures of Tax Agencies

This panel discussed key factors in voluntary compliance such as culture, social norms, biases and past and current experiences of tax agency employees and taxpayers. One of the panelists was a professor at the Netherlands Institute for the Study of Crime and Law Enforcement. His discussion focused on what he called the Willing-Able, Willing-Daring model (WBAD). The WBAD model starts with the norm that individuals tend to comply with rules, even in the absence of punishment. However, depending on the level of complexity involved in making a decision and the consequences, one must look at whether a taxpayer is willing to transgress rules, able to transgress rules, and daring to transgress rules. If this is viewed as a staircase, one should focus on which element can be reduced the most to ensure compliance with rules.

Another panelist from the University of Nairobi Law School in Kenya addressed the challenges in getting taxpayers in developing countries to self-assess for tax purposes. She provided examples of advertisements by taxing authorities that could be viewed negatively and not resonate with taxpayers for purposes of being compliant. She also discussed several characteristics that need to be addressed by both individuals and agencies, ranging from transparency and accountability to fairness and justice.

The last panelist, who was from the Kenya Revenue Authority, presented his views on African countries dealing with basic tax issues. He indicated a change in Kenya to focus on taxpayer rights and a shift toward automation and quick resolution of audits (i.e., within 90 days). Some of the limitations perceived were the inefficiency of the judicial process and costs. He concluded that the old trend of compliance by threat was being replaced with compliance by choice with an emphasis on taxpayer education.

Building Trust II: Safeguards on Tax Agency Power

The final panel of the conference addressed issues related to Mexico and the United States, with the United States discussion focusing on the role of administrative law and tax judges. The administrative law discussion focused on the change in tide after the Supreme Court’s decision in Mayo Foundation v. United States, 562 U.S. 44 (2011), which generally rejected the idea of tax exceptionalism. The discussion noted how the US Department of the Treasury and Internal Revenue Service have recently begun providing more robust explanations for regulations in light of adverse court decisions. Regarding the role of tax judges, Special Trial Judge Peter Panuthos of the United States Tax Court discussed the high number of unrepresented taxpayers in tax cases and what can be done to assist them. Drawing on a report by a law school professor, Judge Panuthos discussed whether judges should follow the “passive norm” – just call “balls and strikes,” – or engage in affirmative judging (i.e., assisting taxpayers by asking questions and being more involved in the process). The discussion was very interesting, particularly with the point being made that in complex cases such as transfer pricing, judges routinely have conference calls with the parties and are actively engaged in trying to narrow the issues and get the parties to agree on what is really at issue.


The conference was extremely interesting and touched on many issues that impact taxpayers, not just at the individual level but at the corporate level. The planning processes for the third and fourth International Conference on Taxpayer Rights are currently underway, with the next conference taking place in the Netherlands on May 3-4, 2018, and the fourth conference taking place at the University of Minnesota Law School in 2019.

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