On the possibility of public control over on-site tax audits in the Russian Federation: towards the formulation of the problem

Malinovskii Oleg Nikolaevich ORCID: 0000-0001-6541-9046 PhD in Law Associate Professor; Department of Civil Procedure and International Law; Kuban State University 350040, Russia, Krasnodar Territory, Krasnodar, Stavropol str., 149 niipgergo2009@mail.ru Other publications by this author     Goncharov Vitalii Viktorovich PhD in Law Associate Professor; Department of Civil Procedure and International Law; Kuban State University 350040, Russia, Krasnodar Territory, Krasnodar, Stavropol str., 149 niipgergo2009@mail.ru Other publications by this author

Petrenko Elena Gennad'evna PhD in Law Associate Professor of the Department of State and International Law, Kuban State Agrarian University named after I. T. Trubilin 350044, Russia, Krasnodar Territory, Krasnodar, Kalinina str., 13 niipgergo2009@mail.ru Other publications by this author

Introduction.

The issues of organization and implementation of public control are widely studied in the works of R. Sh. Abakarova, ^{[1, pp. 49-51]} L. G. Baranova, ^{[3, pp. 102-110]} M. E. Bubnova, ^{[5, pp. 107-110]} E. G. Vasilyeva, ^{[6, pp. 82-89]} A. Y. Vishnevetskaya, ^{[7, pp. 53-58]} V. V. Voitova, ^{[8, pp. 104-116]} A. S. Yemelyanova, ^{[22, pp. 205-209]} T. B. Kuvaldina, ^{[24, pp. 38-45]} N. V. Kuznetsova, ^{[25, pp. 186-191]} I. V. Maryasis, ^{[26, pp. 123-127]} D. V. Ryabkova, ^{[32, pp. 282-284]} P. S. Chikunova, ^{[34, pp. 49-55]} Z. S. Yakupova, ^{[36, pp. 550-556; 37, pp. 478-485]} as well as a number of other authors. At the same time, special attention is paid to the problems of tax audits as the main activity of tax authorities in the works of E. E. Golova, ^{[9, pp. 20-26]} O. V. Grishchenko, ^{[13, pp. 21-29]} D. G. Dzichkovsky, ^{[20, pp. 42-46]} A. S. Yemelyanov, ^{[23, pp. 17-26]} E. A. Safokhina, ^{[33, pp. 205-209]} B. Han, ^{[35, pp. 183-185]} as well as some other scientists. In turn, a number of authors, for example, A. I. Baichurina, ^{[2, pp. 39-41]} A. A. Borisova, ^{[4, pp. 86-98; 11, pp. 81-90]} M. S. Golovneva, ^{[10, pp. 4-10]} E. G. Petrenko, ^{[14, pp. 21-32; 15, pp. 186-188; 16, pp. 194-196]} M. A. Egorova, ^{[21, pp. 10-15]} V. V. Nagaytsev, ^{[27, pp. 113-129; 28, pp. 63-77]} S. Yu. Poyarkov, ^{[30, pp. 60-73]} A. A. Pukhov, ^{[31, pp. 90-98]} note the importance of organizing and exercising public control over activities, acts and decisions of public authorities (especially in the financial sphere, as well as in the field of taxes and taxation). However, the proportion of studies devoted to a detailed analysis of public tax control is insufficient. In this regard, the main purpose of the study is not only to identify, formalize and analyze the main problems that hinder the construction of an optimal system of public control over the activities, acts and decisions of tax authorities in the Russian Federation in the field of on-site tax audits, but also to build and substantiate a system of proposals to resolve these problems. In turn, the main objectives of this scientific research are, in particular: a) formalization of the role and place of the institute of public control in the system of legal guarantees of the rights, freedoms and legitimate interests of individuals and legal entities in Russia; b) substantiation of the importance of the activities, acts and decisions of tax authorities in the system of objects of public control in the country; c) substantiation of the role and importance of on–site tax audits among the activities of tax authorities as the most influential on the rights, freedoms and legitimate interests of legal entities and individual entrepreneurs; d) identification, formalization and analysis of the main problems that hinder the organization and implementation of public control over tax authorities, especially in terms of on-site tax audits; e) development and justification of a system of proposals and recommendations to resolve these problems.

Methods and methodological basis of the research.

The methodological basis of the research consists of several scientific methods, in particular: formal-logical; historical-legal; comparative-legal; statistical; sociological; method of studying specific legal situations. The empirical basis of the study was: The Constitution of Russia; norms of international and national legislation; materials of judicial practice, practice of work of subjects of public control; sources of scientific legal doctrine devoted to the analysis of the organization and implementation of public control in the Russian Federation.

The main text.

The level of stability of any modern democratic state in the world directly depends, on the one hand, on the degree of development, detail and consolidation in its constitution and current legislation of the system of rights, freedoms and legitimate interests of individuals and legal entities, and on the other hand, on the level of reality, validity, realizability of these rights, freedoms and legitimate interests in practical activities of both public authorities and individuals and legal entities.

In the Russian Federation, according to its Constitution, a person, his rights and freedoms are designated as the highest value. At the same time, the activities of all public authorities in one way or another are devoted to the issues of consolidating, implementing, protecting and protecting the above-mentioned supreme value in the state. Citizens of the country can realize, protect and defend their rights, freedoms and legitimate interests both individually and by uniting in various non–governmental non-profit organizations (primarily public associations), whose rights and legitimate interests also need to be protected and protected.

The Russian Constitution of 1993 established a large number of legal guarantees aimed at the realization, protection and protection of constitutional rights, freedoms and legitimate interests of individuals and legal entities, the key of which is the institute of public control, through which citizens of the Russian Federation and public associations (other non-governmental non-profit organizations) have the opportunity to monitor activities, acts and decisions of public authorities, state and municipal organizations, and other bodies and organizations exercising certain public powers on the basis of federal laws.

In this regard, it is of interest to analyze the activities of one of the key types of federal public authorities – tax authorities, whose activities, acts and decisions are one of the main objects of public control in the country.

Why are these objects of public control so important?

Firstly, the activities of the tax authorities are the most important instrument of the state's influence on the country's economy. By changing the content of tax legislation, mitigating or aggravating the tax burden in certain sectors of the economy, the state gets the opportunity to create favorable conditions for economic development in the necessary sectors of the economy, ensuring the economic security of the Russian Federation.

Secondly, the activity of the Federal Tax Service of the country and its numerous territorial divisions directly affects the degree of filling of budgets and extra-budgetary public funds throughout the country. In particular, the percentage of uncollected mandatory payments of all types to the income of the state and municipalities, the level of tax offenses and crimes depends on the level of professionalism, the corruption component in the ranks of civil servants of the tax authorities of the state, which requires close constant attention from the civil society of the country.

Thirdly, the activities, acts and decisions of the tax authorities directly affect any family living in the country, any legal entity. Because all individuals and legal entities act as payers of taxes, fees, fines, penalties, excise taxes and other mandatory payments. The federal budget, regional budgets, municipal budgets, as well as budgets of extra-budgetary public funds, are formed largely from the payment of these mandatory payments. In turn, the expenditure part of the budget also directly depends on the degree of collection of these mandatory payments. That is, the salaries of state employees, as well as other government expenditures, are determined mainly by these payments. And the degree of professionalism and legality of the activities of the tax authorities depends on how effectively and efficiently the revenue parts of these budgets and extra-budgetary public funds in the Russian Federation will be formed.

Tax authorities carry out various types of activities, the most important of which are tax audits, which, in turn, are divided into on-site and off-site.

The most important form of tax audits is an on-site tax audit. Why is it so important compared to a desk tax audit?

Firstly, during the on-site tax audit, employees of tax authorities have the opportunity to familiarize themselves with all the taxpayer's economic documentation in real time, which minimizes the risks of hiding taxpayer's income from taxation.

Secondly, an on-site tax audit allows tax officials to conduct an oral real-time survey of any taxpayer's employees (for example, if there is a suspicion that part of the salary is paid "in an envelope", outside of official registration).

Thirdly, an on-site tax audit is an important preventive incentive for taxpayers. Since they are often planned in nature, taxpayers put the documentation in order before an on-site tax audit, pay (add) mandatory payments to budgets and extra-budgetary public funds of all levels.

Fourth, due to the fact that in most cases an on-site tax audit is carried out on the territory of the taxpayer, or at the location of a separate subdivision of such an organization, employees of tax authorities have the opportunity to verify offline in real time, for example, the actual availability of tangible assets and their reflection in accounting and tax accounting documents.

However, the organization and conduct of public control in relation to both the activities, acts and decisions of tax authorities in general, and in relation to on-site tax audits (as the most important type of activity of tax authorities), are associated with numerous problems, among which the following are the largest:

Firstly, a significant problem is the fact that the institution of public control is not reflected in the Constitution of Russia in any way. The tax authorities, the institute of taxes and other mandatory payments, in turn, are described in detail in the text of the Constitution. This creates peculiar difficulties in determining, on the one hand, the grounds and limits of public control over the activities, acts and decisions of tax authorities, and on the other hand, their status and significance both in the eyes of tax officials and the population of the country as a whole. Moreover, there is a concept of "tax secrecy" (and it makes it even more difficult to resolve the issue of the limits of public tax control in Russia). The solution to this problem is seen in the incorporation of this institution of civil society into the text of the Constitution (with a detailed definition of the principles, forms, methods, types of subjects of public control, as well as the consolidation of signs by which objects of public control can be identified). It is necessary to identify the main forms of interaction between public authorities and subjects of public control.

Secondly, a serious problem today is the fact that the Tax Code of the Russian Federation, in fact, has not consolidated and detailed the institution of public control in the country. Although Federal Law No. 212-FZ dated 07/21/2014 "On the Basics of Public Control in the Russian Federation" removed a number of objects of public control from its subject matter in article 2, it left the activities, acts and decisions of tax authorities among the objects of public control regulated by this Federal Law. We see the solution to this problem in the development and consolidation in the Tax Code of the country of a separate chapter dedicated to the institute of public control. It should be detailed which subjects of public control, on what grounds, and within what limits, should and can exercise public control over the activities, acts and decisions of tax authorities. It is necessary to describe in detail, in particular, how subjects of public control can exercise control over on-site tax audits, which, in our opinion, are the most susceptible to corruption (among all types of activities of tax authorities in the Russian Federation). For example, it is possible to fix the possibility of mandatory participation of representatives of subjects of public control in conducting on-site tax audits at the request of the taxpayer's legal representative, or if the subject of public control has suspicions about the legality of the grounds for conducting the specified tax audit in relation to the taxpayer.

Thirdly, a significant problem is the fact that the subjects of public control, in fact, have insufficient powers to organize and implement public control in relation to these on-site tax audits. This problem should be solved by assigning appropriate powers to the subjects of public control. Due to the fact that this control activity of tax authorities is related to tax and other secrets protected by law, it is necessary to tighten the requirements for candidates of representatives of subjects of public control who will participate in the implementation of public control measures in relation to on-site tax audits.

Fourth, a major problem is the fact that the country's legislation, as well as even the scientific theoretical doctrine of public control, has poorly developed a system of principles, forms, methods, techniques, types of public control measures that could be used by subjects of public control in organizing and conducting it in relation to activities, acts and decisions tax authorities in general (as well as when conducting on-site tax audits). This problem requires a comprehensive solution. On the one hand, the Government of the Russian Federation, through the development of appropriate federal programs, should stimulate scientific, theoretical and practical developments in this area, for example, by training specialists, bachelors and masters of appropriate qualifications for subjects of public tax control at the expense of the federal budget in an appropriate amount. On the other hand, it is necessary to analyze the existing domestic experience in this area in order to identify positive successful forms of it with subsequent scaling throughout the country. The Public Chamber of the Russian Federation, as well as public councils under the Federal Tax Service of the country and its territorial divisions should be involved in this process.

Fifthly, a significant problem, in our opinion, is the fact that specialized subjects of public tax control (the Public Council under the Federal Tax Service of the country and public councils under its territorial divisions), in fact, are not public councils, since their composition is approved by the heads of tax authorities. This circumstance in itself is absurd (the person being checked approves the composition of the persons checking him). This problem requires an immediate solution, otherwise the activities of such subjects of public control, in fact, will be formal. We propose to delegate the right to form these public councils under the Federal Tax Service and its territorial divisions to the Public Chamber of the country, as well as to the public chambers of the subjects of the Russian Federation, without any coordination with any officials of the tax authorities, which will make it possible to give these subjects of public control a real public character.

Sixth, in our opinion, a significant problem is the weak use in Russia of foreign positive experience in the organization and implementation of public tax control, especially with regard to on-site tax audits. It seems that this experience should be analyzed by the Public Chamber of the country. But since this activity is very financially costly, it should be funded within the framework of relevant federal programs aimed at developing the institute of public control in the Russian Federation.

Seventh, a major problem, as we have already noted in previous studies, ^{[12, pp. 170-178; 19, pp. 196-200]} is the weak use by subjects of public control of modern digital technologies, as well as artificial intelligence technologies, which significantly reduces the effectiveness and efficiency of public control measures carried out by these subjects. ^{[17, pp. 127-130; 18, pp. 199-202]} The solution to this problem, in our opinion, is seen in the development and adoption by the Government of the country (after consultations with the Public Chamber of the Russian Federation) A federal program dedicated to the accelerated introduction of modern digital technologies and artificial intelligence technologies into the practice of public control subjects. This is especially true with regard to public tax control, since the Federal Tax Service of Russia is the most technically equipped federal executive body in this area.

Conclusion.

In the course of our scientific research, we have made a number of conclusions:

1. The Institute of Public Control acts as a key legal guarantee for the realization, protection and protection of not only the rights and freedoms of citizens of the Russian Federation, but also the rights and legitimate interests of certain categories of legal entities (in particular, public associations and other non-governmental non-profit organizations).

2. Among the system of objects of public control, the activities, acts and decisions of tax authorities are of great importance, since: they affect the rights, freedoms and legitimate interests of all legal entities and individuals in the country; the degree of fullness of the revenue side of budgets of all levels, as well as public extra-budgetary funds, directly depends on the activities of tax authorities; this activity is the most important form of regulation of economic relations in the country.

3. The most important type of activity of tax authorities in the Russian Federation are on-site tax audits, during which representatives of the Federal Tax Service on the territory of the taxpayer, at the location of a separate subdivision of such an organization, or at the location of the tax authority, carry out various actions to monitor compliance with the taxpayer, payer of fees, payer of insurance premiums or tax agent legislation on taxes and fees.

4. Public control over this type of activity of federal executive authorities is fraught with numerous problems, among which are: a) the lack of consolidation of this institution of civil society in the Constitution of the country; b) the lack of detail of the process of public control in the Tax Code of the Russian Federation, including in relation to on-site tax audits; c) the specifics of the formation of public councils under the Federal Tax Service of Russia and its territorial divisions, in which we question the independence of their members from these authorities; c) the lack of elaboration in legislation, as well as educational and scientific literature, of a system of specific forms, methods, principles and types of public control measures in relation to on-site tax audits; d) weak use of foreign experience of civil society control in relation to tax authorities; e) insufficient use by subjects of public control of modern digital technologies (including when monitoring the activities, acts and decisions of tax authorities in the Russian Federation).

5. The resolution of these problems will require the development and implementation of a number of events, among which are the following: a) the formalization of social control institution in the Constitution; b) fixing the Tax code of the Russian Federation, a separate Chapter is devoted to the organization and implementation of public control in respect of the activity of the acts and decisions of tax authorities; C) change the order of formation of specialized subjects of public control, currently under development with the tax authorities (so that the data of public councils were elected (argued) public chambers of the appropriate level without the participation of officials of the tax authorities); g) development and adoption by the Government of the Russian Federation Federal programmes aimed at promoting scientific and practical research in the field of social control, including, in relation to the activities, acts and decisions of tax authorities (including tax inspection); d) the organization of the Public chamber of the country together with the Public Council under the Federal tax service of the Russian Federation in the development of projects of normative legal acts on the implementation of modern forms, methods, techniques, methods, activities of public control in respect of the activity of the acts and decisions of tax authorities (including tax inspection), with the subsequent direction of these projects the government of the Russian Federation; e) the organization of the Public chamber of the country of the analysis of modern foreign experience of civilian control over the activities of the tax authorities (first of all – with the use of modern digital technologies and artificial intelligence technologies), including in part of field tax audits, with the aim to implement this experience in the practice of Russian subjects of public control.