“The burden of consequences will fall on the individual”: lawyers talk about canceling taxes on citizens without trial

What the Ministry of Finance proposed

The Ministry of Finance proposed to collect taxes from Russians extrajudicially. For now, this measure applies to organizations and individual entrepreneurs, but the ministry proposes to extend it to individuals and self-employed workers, the Izvestia newspaper reported on November 26, citing the Federal Tax Service. The new mechanism is expected to become operational from November 1, 2025. Currently, authorities can only collect tax arrears through the courts.

Extrajudicial collection of fines and compulsory payments from individuals will help increase the revenue of regional budgets by 22.5 billion rubles. This will reduce the burden on the judicial system, when tax authorities are forced to go to court to recover, for example, several thousand rubles. In 99% of cases, the judicial system sides with the tax authorities.

What threatens Russians with extrajudicial forgiveness of their debts to the Federal Tax Service?

Lawyers explained to RB.RU what the new initiative threatens citizens with and suggested that now individuals should be more careful about paying taxes.

How to explain corporate lawyer Yulia BondarenkoThere is logic and common sense in the proposals of the Ministry of Finance, but the lawyer fears that the sanctions are peremptory in nature.

“Tax authorities have a fairly wide range of powers and collection mechanisms. And then they canceled it and the citizen had to go and challenge it. That is, the burden of adverse consequences and proof has been shifted to the individual,” the lawyer stated.

Bondarenko noted that if a citizen does not have time to challenge the write-offs, but after making the deductions proves their illegality, it will be difficult to return the money immediately.

“It is unlikely that it will be possible to return the written off amounts of money even with a positive court decision, most likely they will be taken into account in the next tax period,” the lawyer said.

• According to the new rules, the judicial procedure will continue if the payer filed a claim to dispute the debt until the time the tax authority decides to collect it. For this, 30 days are given.

According to the lawyer, the initiative could provoke a wave of popular discontent.

“Taxpayers see a figure of 22.5 billion rubles that they want to collect from them. How and why? Then they will have to figure it out themselves,” Bondarenko added.

How will debts be canceled without trial?

Partner at Five Stones Consulting Ekaterina Boldinova He said that so far the procedure for collecting debts from individuals looks like this:

• As of January 1, 2023, all taxpayers have a Unified Tax Account (UTA). If a negative unified tax arises, it means that the citizen has arrears in paying taxes and coercive measures will be applied.
• First comes a demand for payment and then the tax authority requests a court order from a court of general jurisdiction.
• After receiving the order and its legal entry into force, if the debtor has bank accounts, the tax office sends instructions for writing off funds to the bank.
• If there are no bank accounts, the judicial act is sent to the bailiff and the execution procedure begins.

The new bill proposes to change this procedure.

“It is assumed that if the taxpayer does not pay mandatory payments on time, the tax authorities will have the right to independently make a decision on debt collection in an amount not exceeding the negative balance of the Unified Tax Service. The tax authorities must make such a decision within six months following the expiration date of the deadline to comply with the debt payment requirement. If this deadline is exceeded, the decision is considered invalid and cannot be executed,” Boldinova said.

In some cases, the foreclosure of individuals’ money will be limited by the State, Boldinova clarified.

• It will not be possible to recover compensation received by the taxpayer in connection with compensation for damage to health, in connection with the loss of breadwinner or care for disabled citizens.
• In addition, it will not be possible to recover the full amount of the salary: according to the legislation on enforcement procedures, no more than half of it can be withheld from the debtor.

Partner Five Stones Consulting added that the bill provides a number of safeguards for taxpayers:

• It is assumed that in relation to debts that are disputed, for example, the taxpayer has filed a complaint with a higher tax authority, the undisputed collection procedure will not apply.
• Within 30 days following the date of receipt of the tax payment notice, the taxpayer may express disagreement with the assessed amount by submitting a notice of disagreement.
• If the tax authority, after considering the taxpayer’s arguments, leaves the notification unchanged, the citizen has the right to disagree with it again, and then the tax collection will take place only in court.

“The process of collecting taxes that are not in dispute will be simpler and more convenient and will eliminate additional burden on the courts. However, with such changes, taxpayers will have to independently and very carefully monitor and verify the information in tax notifications so as not to miss the disagreement deadline,” the lawyer stated.