{"id":19989,"date":"2021-12-14T17:08:12","date_gmt":"2021-12-14T16:08:12","guid":{"rendered":"https:\/\/farewelltax.com\/controversy-surrounding-the-statute-of-limitations-on-claims-related-to-the-blank-year-justified-by-a-one-time-surge-in-activity\/"},"modified":"2026-09-24T11:36:11","modified_gmt":"2026-09-24T09:36:11","slug":"controversy-surrounding-the-statute-of-limitations-on-claims-related-to-the-blank-year-justified-by-a-one-time-surge-in-activity","status":"publish","type":"post","link":"https:\/\/farewelltax.com\/en\/controversy-surrounding-the-statute-of-limitations-on-claims-related-to-the-blank-year-justified-by-a-one-time-surge-in-activity\/","title":{"rendered":"Controversy surrounding the statute of limitations on claims related to the \u201cblank year\u201d justified by a one-time surge in activity."},"content":{"rendered":"\n<p class=\"has-drop-cap wp-block-paragraph\"><em>Statute of limitations on the filing of claims to obtain the CIMR for 2019 income, justified by a one-time increase in business activity.<\/em><\/p>\n\n<p class=\"wp-block-paragraph\">At the end of each calendar year, we at\ninvite our clients to file claims to obtain\na refund of taxes wrongfully assessed before they become\ntime-barred. The statute of limitations for tax matters is, in most cases,\nset for December 31.   <\/p>\n\n<p class=\"wp-block-paragraph\">The filing of a claim\nregarding a dispute by executives and independent contractors who were unable to take full advantage\nof the \u201cblank year\u201d for their 2018 income due to a\nsurge in business activity for that year alone is relevant.<\/p>\n\n<p class=\"wp-block-paragraph\">As a reminder, the \u201ctax-free year\u201d or CIMR (\n) was intended to waive the tax on non-exceptional income for taxpayers in the \u201c\n\u201d category. To prevent potential abuse, the CIMR applicable for the 2018 tax year\nwas capped at the higher of the incomes reported for the years 2015,\n2016, and 2017. A supplemental CIMR was then automatically applied to\nincome for 2019 if that income was higher than the income\nreported in 2018 (total supplemental CIMR) or, conversely, more\nhigher than the income for 2015, 2016, and 2017 (partial supplemental CIMR).   <\/p>\n\n<p class=\"wp-block-paragraph\">In the absence of an additional CIMR\nfor 2019, the taxpayer has the option to file a contentious claim\nregarding 2018 income by proving that the one-time increase\nin their reported net income for 2018 was related to an increase\nin business activity.  <\/p>\n\n<p class=\"wp-block-paragraph\"><strong>In the absence of specific provisions regarding the procedures governing this claim, we consider that it should be filed for the 2018 tax year, since it was for that year that the tax assessment was issued and not rescinded by the CIMR, and also because the evidence of the increase in business activity pertains solely to that year.<\/strong><\/p>\n\n<p class=\"wp-block-paragraph\">Consequently, pursuant t\n, the general statutory time limits (Art. R*196-1 of the Book of Tax Procedures) apply,\nthe deadline for filing a claim expires on December 31, 2021 (i.e., December 31 of\nthe second year following the collection notice issued in September 2019\nregarding the 2018 income tax). This position is also\nshared in specialized tax law journals (see Feuillet Rapide\nFiscal Social 50\/21\u2014published on December 2, 2021).  <\/p>\n\n<p class=\"wp-block-paragraph\">However, the tax administration\u2014and in particular the National Directorate for Tax Audits (DNVSF), considers that disputed claims regarding the granting of a tax credit for the year 208 based on a one-time increase in business activity must be filed in connection with 2019 income (2020 tax assessment notice). Consequently, according to the tax authorities, the statute of limitations for these claims would be <strong>December 31, 2022<\/strong> (<a href=\"https:\/\/farewelltax.com\/wp-content\/uploads\/2021\/12\/Imbroglio_1.pdf\">decision in the link<\/a>)   <\/p>\n\n<p class=\"wp-block-paragraph\">From a technical and legislative-\nperspective, we do not agree with this analysis, since the 2020 notice of assessment for tax collection\nbased on 2019 income was issued in accordance with the law and\nthe taxpayer was not eligible for a partial\nor full additional tax credit.<\/p>\n\n<p class=\"wp-block-paragraph\">This position would, by\n, also have adverse consequences for the taxpayer, particularly in the event\nthat the tax authorities\nchallenge the CIMR for the year 2018. The taxpayer would then have to pay the assessment for\nthe year 2018 and then file a claim for the year 2019.\nAny potential offset would be ruled out since these are two separate tax years\n; the taxpayer would therefore risk incurring a tax burden\n, particularly due to the penalties and late payment interest applied.    <\/p>\n\n<p class=\"has-text-color has-background has-very-dark-gray-color has-very-light-gray-background-color wp-block-paragraph\">In any case, as a precautionary measure, we believe these claims should be filed by <strong>December 31, 2021, especially <\/strong>since the tax authority\u2019s position has not been officially published in a manner that is legally binding.  <\/p>\n","protected":false},"excerpt":{"rendered":"<p>Statute of limitations on the filing of claims to obtain the CIMR for 2019 income, justified by a one-time increase in business activity. At the end of each calendar year, we at invite our clients to file claims to obtain a refund of taxes wrongfully assessed before they become time-barred. The statute of limitations for [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"rs_blank_template":"","rs_page_bg_color":"","slide_template_v7":"","footnotes":""},"categories":[96],"tags":[101,102,103],"class_list":["post-19989","post","type-post","status-publish","format-standard","hentry","category-tax-audit","tag-cimr","tag-cimr-prescription","tag-income-tax"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v28.5 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>Controversy surrounding the statute of limitations on claims related to the \u201cblank year\u201d justified by a one-time surge in activity. - FareWell Tax<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/farewelltax.com\/en\/controversy-surrounding-the-statute-of-limitations-on-claims-related-to-the-blank-year-justified-by-a-one-time-surge-in-activity\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Controversy surrounding the statute of limitations on claims related to the \u201cblank year\u201d justified by a one-time surge in activity. - FareWell Tax\" \/>\n<meta property=\"og:description\" content=\"Statute of limitations on the filing of claims to obtain the CIMR for 2019 income, justified by a one-time increase in business activity. At the end of each calendar year, we at invite our clients to file claims to obtain a refund of taxes wrongfully assessed before they become time-barred. 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