Regarding this inspection investigation being conducted under the direction of Kumamoto National Tax Bureau Director Atsushi Kitamura, this union raises several important points purely from a legal perspective.
The authorities' explanation changed before and after the personnel change.
In this matter, the union understands that the authorities' explanations regarding the seized items changed before and after the personnel change.
During the tenure of the previous person in charge (Chief Investigator Nobuhiro Kawaguchi), taxpayers requesting the return of seized items were met with responses to the effect of, "If you want them back, come and get them."
By the time of the successor in charge (Principal Investigator Hiroshi Oka), two years have passed since the seizure, and the answer has changed to the taxpayer not even being able to view the seized items.
This change has decisive legal implications.
Crucial evidence is solidifying, and allowing access to it would suggest that the accusation is imminent, such as the possibility of them colluding.
Point 1: This change in explanation is an admission that "face-to-face surveys are not a prerequisite for survey progress."
The previous officer's approach was based on the premise that "proceedings related to the seized items would advance if an in-person investigation were conducted."
The next stage of the successor's response is structured as follows: "Regardless of whether an in-person investigation is conducted, the investigation will reach the stage of access restrictions after two years."
From this, there is a conclusion that logically follows.
The authorities, by their actions, acknowledge that the inspection can proceed without in-person investigations.
This is extremely important for taxpayers because it proves that the Kumamoto Regional Taxation Bureau itself has demonstrated to taxpayers nationwide who are strongly urged to undergo in-person interviews that "the authorities' investigation will proceed even if they do not agree to an in-person interview." In-person interviews are not something taxpayers are forced to accept, and the exercise of the right to question and inspect also has limits for the other party's obligation to endure (Articles 74-2 et seq. of the National Tax General Law, and questioning and inspection based on said law are permitted only within the framework of due process, even with penalties as a background). Since the authorities themselves have shown that "it will proceed even without an in-person interview," the coercion of in-person interviews loses its grounds for necessity.
■ Point 2: "Not Found" and "Cannot Be Viewed" Are Mutually Exclusive - Accountability for the Preservation Process
In the past, this union understands through the Mamizuka memo that Director Shimazaki Tsuyoshi stated the seized items "could not be found." On the other hand, the current explanation is "cannot be viewed."
"Cannot be found (location unknown)" and "cannot be viewed (exists but is not shown)" are logically incompatible. To make them compatible, an organizational explanation is essential regarding what happened to the confiscated item and how its custody progressed.
Regarding seized items, authorities have a strict duty of safekeeping.
- The duty to manage seized items is an inherent duty within the seizure procedure under the Code of Criminal Procedure (including the provisions applied mutatis mutandis in the investigation of tax offenses).
- The loss, damage, or disappearance of seized property can lead to an evaluation of illegality under Article 1, Paragraph 1 of the State Compensation Act.
- Taxpayers' rights regarding seized property are based on Article 29 of the Constitution, which guarantees property rights. Seizure is a significant restriction on property rights, and whether that restriction is properly managed is a matter that authorities must continuously explain indefinitely.
- Due process (Article 31 of the Constitution) applies to the entire process of managing and returning seized property.
Therefore, the authorities are accountable in writing for the transition of the explanation from "not found" to "unavailable for viewing." This is an organizational obligation, regardless of who the responsible person is.
■ Point 3: An "accusation" made without exercising the right to examine questions violates due process.
As far as the Union understands, in this case, the taxpayer's right to question and inspect is not being properly exercised, meaning sufficient factual hearings are not being conducted with the parties involved, and prosecution is now imminent.
This is a legal argument that cannot be overlooked.
- The right to inspect and question (Article 74-2 et seq. of the National Tax General Law) is a system for the authorities to clarify the facts of a case, and at the same time, it also serves to guarantee taxpayers an opportunity to state their understanding.
- A process that reaches a conclusion without hearing from the parties concerned violates due process (Article 31 of the Constitution). It is an established understanding (case law of the Supreme Court) that the guarantee of Article 31 of the Constitution extends not only to criminal proceedings but also to administrative proceedings.
- The practice of treating taxpayers as "tax evaders" before a definitive judgment or disposition is made violates the principle of presumed innocence and may infringe upon the right to personality (Article 13 of the Constitution).
- These can be subject to an illegality assessment under Article 1, Paragraph 1 of the National Compensation Act.
An accusation is merely the entrance to criminal proceedings. If the authorities have not completed their inquiries and investigations before standing at that entrance, the legitimacy of the entire procedure will be questioned on that ground alone. What should be questioned in court, prior to the taxpayer's circumstances, is the reasonable basis of the authorities in bringing an accusation without completing their inquiries and investigations.
■ Point 4: Since suspicion of illegality has arisen on both sides, exemption through "transfer" is impossible.
This is the theoretical core of this statement.
In this case, while the taxpayer is under suspicion, questions of legality have also arisen regarding the authorities' operations—such as the management of seized items, the evolving explanations, the presumed discovery of the violation without the exercise of the right to question and inspect, and the history of past information dissemination.
In this case, therefore, the authorities are in the same legal position as the taxpayer from the beginning of the inspection, that is, they are on the side of being questioned about legality.
And regarding "how those whose legality is questioned are treated," the authorities have applied a consistent logic to taxpayers. That is to say—
As long as the organization has continuity, the current organization bears responsibility for past matters.
Even if the company's representative changes, the current management is responsible for past fiscal years due to the continuity of the company. Even in cases of business succession or M&A, the successor or surviving company assumes responsibility for past matters. This is the premise for tax audits and investigations.
If that's the case, then the exact same logic must apply to the IRS. This is not a metaphor, but a legal necessity.
- Reason 1: Equality under the law (Article 14 of the Constitution) - The same legal theory must apply symmetrically to both the party questioning legality and the party being questioned. It is a fundamental violation of the rule of law for an organization that enforces the law to exempt itself from the application of that theory.
- Reason 2: Doctrine of Estoppel (Principle of Good Faith) - The authorities have taxed and investigated taxpayers based on the position that "liability is succeeded through organizational continuity." To state "we don't know because of the transfer" the moment the same logic is applied to themselves is to abandon the legal theory they themselves adopted only when it is inconvenient, which is not permissible under the principle of good faith.
- Reason 3: Administrative responsibility belongs to the organization (Article 1 of the State Liability Act) - Article 1, Paragraph 1 of the State Liability Act stipulates that the "state or public entity" is responsible for the official acts of public officials. The subject of responsibility is the organization, not the individual official. Therefore, an interpretation that the organization's responsibility disappears due to the reassignment of an official is not possible under the law.
- Reason 4: Responsibility based on position at the time of action is unchangeable — The accused is evaluated based on their position at the time of the action. Later transfers or resignations do not change the evaluation at the time of the action. Authorities have applied this exact principle to taxpayers. The same principle applies to officials of the authorities, based on their position at the time of the action.
Therefore, officials of the authorities involved in this matter, including Director Atsushi Kitamura, cannot structurally escape organizational responsibility based on their positions at the time of the act, regardless of subsequent personnel changes. This is merely a faithful reflection of the logic that the authorities themselves have used against taxpayers.
It is the authorities who have emphasized the continuity of things and the continuity of people. That principle applies equally to the authorities themselves.
Point 5: The absence of a deadline for tax audits means that taxpayers are subject to indefinite pursuit.
Under current Japanese law, there is no statutory time limit for inspections. The authorities have operated under the premise that this allows them to exercise their investigative powers without being constrained by time.
However, this indefinite nature works symmetrically from the taxpayer's perspective as well.
If the investigation is indefinite, then the taxpayer's verification, record-keeping, and questioning are also indefinite. Even if personnel change, due to the continuity of organizational responsibility, the authorities will continue to be questioned about past actions. Once it has been stated that seized items are "unavailable," the responsibility to explain their custody history also continues indefinitely.
Time is no longer on the authorities' side.
Point 6: Claim for Correction and Refund Interest - Accurate Legal Explanation
To avoid any misunderstanding, I will state this precisely.
While prolonged tax audits themselves are not a "service" that benefits the taxpayer, if the audit reveals that taxes were excessively levied or that there were illegal or unjust dispositions, the taxpayer has the right to reclaim what is rightfully theirs.
- You can request a reduction of the amount of tax paid in excess through a request for correction (Article 23 of the National Tax General Law). If there are subsequent reasons, a request may be permitted within a longer period than usual.
- When a reduction and correction is made, and an overpayment occurs, interest on the overpayment (Article 58 of the National Tax General Law) will be added at the statutory rate. This is not a "gift," but money that the taxpayer is legally entitled to receive.
- If you suffer damages due to illegal investigation or disposition, you may be able to file a claim for state compensation under Article 1 of the State Tort Act.
Therefore, rather than simply welcoming the extension itself, if illegal or excessive points are revealed at the end of a prolonged investigation, those amounts can be reliably recovered based on the law—this is the accurate legal structure. This union will, along with its members, support the exercise of this legitimate right to the very end.
■ Point 7: The purpose of administrative investigations also includes "prevention" — if it leads to prosecution, its consistency with that purpose will be questioned.
Administrative and tax investigations not only aim to correct individual cases but also have a preventive purpose: to deter future improper filings and maintain a proper tax order.
If that's the case, there's a contradiction in the authorities' actions: while stating that "prosecution is unavoidable," they fail to properly exercise their rights to question and investigate, and operate for an extended period without reaching a conclusion. If the goal is prevention, then promptly determining the case through due process should be what serves that purpose. The prolonged state of not fully questioning or investigating, not presenting a conclusion, yet conveying the likelihood of prosecution externally – to whose benefit and in what way does this serve? The authorities have a responsibility to explain the consistency of this situation with the original purpose of administrative investigations, which is prevention.
■ Confirmation and Requirements of this Union
- I request that you clarify in writing when and how the right to question and inspect was exercised (or not exercised) against the taxpayer in this matter.
- Regarding the seized items, we request that you clarify in writing the consistency between the past explanation of "location unknown" and the current explanation of "unavailable for viewing," as well as the custody history during that period.
- 3. We request that you clarify in writing the reasons why the handling of confiscated items changed between the period of the former custodian and the period of the successor custodian.
- 4. We reconfirm that organizational responsibility, based on their positions at the time of the acts, continues to apply to Atsushi Kitamura, Director of the Kumamoto Regional Taxation Bureau, and other officials involved in this matter, regardless of whether they have undergone personnel changes.
- 5. The Union and its members, as a matter of right, demand a face-to-face forum with the authorities, conducted with due process, where both parties can frankly present their claims and doubts.
- 6. The Union will continue to indefinitely record, verify, and disseminate the authorities' response to this matter. If there is no end date for inspection surveys, then there is no end date for verification by taxpayers.
From a legal standpoint, if the authorities have espoused the principles of "organizational continuity" and "material continuity," then those principles bind the authorities themselves most strongly. This union sincerely hopes that the authorities will remain faithful to the principles they have put forth.
The union addresses Mr. Atsushi Kitamura, Director of the Kumamoto Regional Tax Bureau, Mr. Takeshi Shimazaki, Supervisor, Mr. Nobuhiro Kawaguchi, Chief Investigator, Mr. Hirofumi Oka, Chief Investigator, and Mr. Keisuke Ota.
Is it okay to not stop the leak of investigative and confidential information from the Umizuka memo, which is happening at an incredible speed?
I look forward to hearing from you.
National Tax Union
