He who states must prove. This means that your statement must be substantiated. This also applies to income tax returns and deductions. The person filing a tax return must always be able to prove that the deductions are justified. The tax authorities must also be able to prove that someone had a higher income than he or she declared. How does the burden of proof work?
Income tax return: state the correct income
Everyone with income must declare this to the tax authorities, even if they ultimately do not have to pay income tax. The tax authorities want to know exactly who is working and how much has been earned. Whether you have to pay tax depends on your personal situation and the level of income. Sometimes you can earn extra tax-free, but even then all income must be reported to the tax authorities. This then calculates how much has to be paid or whether you will even get money back from the tax authorities.
Mortgage interest deduction
People who own their own home (owner-occupied home) are faced with mortgage interest that must be paid. Mortgage interest is deductible for up to 30 years, less in certain cases. There are also only a number of mortgage types that are deductible. The costs can be deducted via a provisional assessment or annually via the income tax return. Anyone who receives the costs monthly via the provisional assessment must still file the annual tax return. The tax authorities will then check whether additional payments need to be made or whether they will receive anything back.
Burden of proof of the private individual
The tax authorities do not just give away money: the person filing a tax return must demonstrate that the deductions are correct. Anyone who is going to deduct mortgage interest must have an owner-occupied home with a mortgage. The tax authorities therefore require supporting documents for this. Evidence includes, for example, bank statements that clearly show that the mortgage has been paid. The mortgage deed can also serve as evidence if the tax authorities have doubts about whether you have a mortgage for the home. For a renovation, an invoice from the contractor/handicraft company is often sufficient. Always provide written proof: the tax authorities do nothing with e-mails or telephone calls. Sometimes the tax authorities decide to carry out an additional check when they have doubts. A letter will then be sent requesting (more) supporting documents. Submit this on time: the letter always states a date by which everything must be received by the tax authorities. Feel free to ask the tax authorities again whether everything has been received. Anyone who does not deliver on time or does not deliver at all will sometimes be faced with a higher assessment than expected. An objection can be lodged against this higher assessment. The tax authorities require more supporting documents for this. Anyone who cannot provide this will have to accept the decision of the tax authorities. The following applies to income: always enter the correct amount. The tax authorities will not make a fuss if someone has miscalculated one euro, but do not tamper with the income tax return. When the tax authorities receive a tip from third parties about income received on which no tax has been paid, the tax authorities will contact the tax debtor. This person will have to make a statement about this. The tax authorities then decide what to do with it. Anyone who declares income tax and still withholds something also runs a risk. If the tax authorities suspect that income has been withheld, they will impose a higher assessment. Have you received a higher assessment because the tax authorities believe that you had more income? Then you must be able to demonstrate that this was not the case. And that often becomes very difficult.
Burden of proof of the tax authorities
The tax authorities are not allowed to simply say that someone had more income than stated, for example because this person lives beyond his means. The tax authorities rely on, for example, tips from third parties, advertisements placed by someone or a declaration from the employer. For example, the tax authorities deal with websites such as Marktplaats, eBay or regional or major newspapers. In 2007, a woman was arrested for posting more than 1,378 advertisements on Marktplaats.nl selling strollers. The woman was on benefits and did not declare income from sales. After the advertisements were filtered out for duplicates, the total value of sales turned out to be 48,629 euros. Although the woman claimed that she had sold for only 5,000 euros, she received a tax assessment of 27,386 and a Health Insurance Act contribution of 11,000 plus a fine of 2,237 euros. The court had decided this. The tax authorities did not just come up with this out of the blue: they conducted thorough research and followed the woman for a long time. The tax authorities must also prove when they claim. When the tax authorities receive a tip about undeclared work, the tax authorities will in most cases investigate this. Once again, the tax authorities must be able to prove that the tip is correct. Many people give a tip to spite someone else, even when it turns out to be untrue. Nowadays it has become easier for the tax authorities to provide proof. Social media such as Facebook, Hyves and Twitter are often used by undeclared workers or tax evaders. And not only your friends see that you are working illegally again today, but also the tax authorities. A good tip? Report all income neatly to the tax authorities. This will prevent you from a lot of misery.