The seizure of chattels experienced by the representative of a corporation is said to have ultimately resulted in the release from seizure and return of all chattels after approximately two years. It is reported that the targets of the seizure included children's study desks, dining tables, kotatsu (heated tables), air conditioning equipment, means of communication, and even chattels necessary for medical purposes. If this testimony is true, the disposition may have extended to property that the National Tax Collection Act stipulates "cannot be seized," as well as property related to the minimum standard of living, health, and business continuation. Based on the testimony of the involved party, this article organizes the lost two years and the underlying legal issues, focusing on statutory provisions, circulars, and judicial precedents.
What happened
The origin was a tax audit. Several items were disallowed, resulting in additional tax assessments, and tax payment was delayed. Regarding the chattel seizure carried out in response, the individual complains that it significantly deviated from the scope of normal collection procedures.
According to the individual, all bank accounts and cash deposits were seized, leaving a balance of zero. Their business was forced to shut down, and even communication devices necessary for contact and operations, such as an iPhone and a PC, were reportedly subjected to seizure. The individual complains that they are unable to conduct any business, cannot communicate with the outside world, and have been left without a single yen on hand.
Furthermore, the scope of the seizure extended to the children's study desks, dining table, and kotatsu (heated table), forcing the family to eat meals on the floor. As a result of even the air conditioning equipment being seized, the individual and their children reportedly suffered from heatstroke. Additionally, the individual has a pre-existing medical condition and claims that their condition worsened because movable property necessary for medical reasons was also seized.
According to him, the iPhone, PC, and air conditioner were returned about two months after the seizure, following an appeal to the National Tax Tribunal. However, the reasons given for their return were reportedly that the iPhone and PC "could not have their data completely erased," and the air conditioner was returned "out of consideration." He argues that these explanations are extremely unnatural in relation to the requirements for lifting a seizure under the National Tax Collection Act, and that they raise questions about the legality and necessity of the seizure in the first place.
In addition, one of the returned air conditioners was reportedly damaged and repaired at the expense of the regional tax bureau. However, due in part to being uninstalled and reinstalled multiple times, it is said that malfunctions still persist. Furthermore, the outdoor unit was not returned to its original location and remains placed in a position that blocks daily traffic lines. Despite the individual's request to move it, the authorities reportedly continue to refuse, explaining to the effect that "this is the result of having done our utmost to restore the property to its original condition."
In addition, the person concerned states that they were repeatedly pressured by the officials in charge to "choose between death or bankruptcy," and that they were followed even when going to the restroom during the seizure. Furthermore, they complain that during the process of selecting seized property, an official touched personal clothing despite the person's strong objections. The person asserts that they stated on the spot, "Please stop because there are undergarments in there," and although a female officer was watching, another official unfolded and touched the clothing. However, it is said that this incident is not mentioned in the investigation report.
Furthermore, the individual has expressed serious doubts regarding the investigation report recording the seizure status. According to the individual, two investigation reports were prepared, and one of them contains numerous statements suggesting that confirmation of property ownership—specifically, whether the property belonged to the corporation or the representative individually—was conducted. However, the individual asserts that sufficient ownership confirmation was not actually performed and that all such statements are contrary to the fact. In addition, the individual suspects that the report may have been created at a later date so as not to affect the request for review or the ruling, and points out that the handwriting of the author differs from the handwriting of the person who entered the date.
He reportedly requested the relevant regional taxation bureau to correct the personal information regarding the contents of this investigation report, but the request was rejected. As a result, he has currently filed a request for review with the National Tax Agency and is said to be awaiting the outcome.
Subsequently, following an appeal and inquiries made by the parties involved to the National Tax Agency, it is understood that the National Tax Agency issued some form of guidance to the Regional Tax Bureau, resulting in a decision to lift the seizure and return all movable property that had been seized for approximately two years.However, based on the information available at this time, it cannot be said that the authorities have explicitly acknowledged that “the seizure was unlawful.” Therefore, in this case, based on the fact that the seizure has been lifted and the property returned, the legality, appropriateness, and reasonableness of the selection of assets in the initial disposition will be examined.
The individual claims that this seizure was a major factor leading to bankruptcy and states that bankruptcy proceedings are still ongoing. Furthermore, the individual expresses that they were driven to such a desperate state that they managed to endure it only because of their children, and otherwise might have given up on living altogether.
Where is the legal problem?
Assuming the individual's testimony is true, this seizure involves multiple significant legal issues.
- Conflict with Property Exempt from Seizure—Article 75, Paragraph 1 of the National Tax Collection Act stipulates that clothing, bedding, furniture, kitchen utensils, tatami mats, and fittings that are indispensable for the livelihood of the delinquent taxpayer and relatives living in the same household constitute property exempt from seizure. Furthermore, this same article designates books and instruments primarily necessary for one's own study as property exempt from seizure. The National Tax Agency's basic directives also indicate that these are absolutely exempt properties, and if items whose status as exempt property is externally obvious are seized, such seizure is invalid. A child's study desk may qualify as exempt property as an instrument necessary for study. Dining tables and kotatsu (heated tables) may also fall under property exempt from seizure as furniture indispensable for daily life. While cooling equipment is not explicitly specified in the text of the statute, depending on specific circumstances such as severe heat, the presence of children, health hazards, and the availability of alternative means, the appropriateness of its seizure is strongly called into question as property necessary to maintain a minimum standard of living.
- Seizure of communication and business tools—According to the individual, all communication and business tools, including an iPhone and a PC, were seized. The individual complains that this has made it extremely difficult to conduct business or communicate with the outside world. Of course, communication devices and PCs are not always exempt from seizure. However, when such items are essential for business continuity and no other means of communication or work are available, the necessity, appropriateness, and rationality of property selection in the seizure are subject to strict scrutiny. Furthermore, if the iPhone and PC were later returned on the grounds that "complete data deletion was not possible," the extent to which the initial seizure was actually effective in relation to realizability and the purpose of disposition should also be examined.
- Seizure of medically necessary movables: The individual claims that their chronic illness worsened because even movables necessary for medical purposes were subjected to seizure. It is reported that the National Tax Agency explained that seizures should be conducted after inquiring about the current status of illnesses and other conditions, but according to the individual, no such inquiries were made at all. Regarding movables related to life, body, and health, not only formal ownership and convertibility into cash, but also the individual's health condition, necessity in daily life, and the presence or absence of alternative means should be carefully confirmed. If the seizure was executed without such confirmation, not only the proportionality of the seizure, but also the existence of a breach of the duty of care under the State Redress Act could become an issue.
- Suspicion of excessive or fruitless attachment—Article 48, Paragraph 1 of the National Tax Collection Act provides that property other than that necessary for collecting national taxes may not be attached. Paragraph 2 of the same article prohibits the attachment of property that is not expected to yield proceeds exceeding delinquent tax disposal costs and preferential claims even if liquidated, so-called fruitless attachment. The circumstance that all movables were ultimately returned does not in itself immediately mean that the initial attachment was illegal. However, at the time of the attachment, it raises serious questions as to whether these movables were truly necessary in light of the purpose of collection, whether they had liquidation value, and whether another choice of property with less burden would have been possible. Regarding the disposition allegedly carried out by mobilizing moving company trucks, workers, and even electricians, the fruitfulness and proportionality should be verified in relation to the disposition costs as well.
- Confirmation of Ownership between Corporate and Personal Assets of the Representative—Delinquency disposition generally extends only to assets belonging to the delinquent taxpayer themselves. In the case of corporate tax delinquency, the subject of seizure is, in principle, corporate assets, and the personal living assets of the representative are not subject to seizure as a matter of course. Except when there is a separate legal basis such as secondary tax liability for the representative personally, confirming the ownership between corporate and personal assets is the starting point of the disposition. It is said that the taxpayer has consistently pointed out the inadequacy of this ownership confirmation from immediately after the seizure. If the authorities later gave an explanation to the effect that "there may have been flaws in confirming the ownership between the corporation and the individual," serious questions are raised as to whether the investigation into asset ownership, which serves as the prerequisite for the seizure, was sufficient.
- Content of the investigation report and issues regarding falsified official documents—Article 156 of the Penal Code penalizes a public official who, in connection with their duties, creates a false official document for the purpose of uttering it. Furthermore, Article 158 of the Penal Code penalizes the uttering of such falsely created official documents. However, merely having statements in a report that differ from the facts does not immediately constitute these crimes. To be problematic, it is necessary to examine whether the document qualifies as an official document, whether the stated content is objectively false, whether the creator was aware of the falsity, whether there was an intention to utter it, and whether it was actually used in the context of maintaining a disposition or in an appeal review. As claimed by the individual, if it was recorded as if attribution had been confirmed even though it was not, and the legality of the disposition was argued based on that record, it could become an issue that cannot be overlooked under either administrative or criminal law. In addition, the suspicion that the investigation report was created at a later date, the suspicion that the handwriting of the creator and the person who entered the date are different, and the background that the request for correction of personal information was dismissed, leading to a request for review to the National Tax Agency, are also important in verifying the credibility of the document.
- Issue of damage to seized property and restoration to its original state—According to the individual, part of the returned air conditioner was damaged and repaired at the expense of the relevant national tax office. Furthermore, it is claimed that as a result of being uninstalled and reinstalled multiple times, it still remains in poor working order. In addition, the outdoor unit was not returned to its original position and remains placed in a location that blocks daily traffic lines, and requests to move it have reportedly been refused. When storing and returning seized property, it is required not to damage the property unnecessarily and to restore it to its original state as much as possible to the extent feasible upon return. If damage to the seized property or an inappropriate return condition has occurred, damages under the State Redress Act and administrative liability for management could become issues.
- Perspective under Article 1 of the State Redress Act—Paragraph 1 of Article 1 of the State Redress Act provides that when a public official engaged in the exercise of public authority illegally inflicts damage on another person through intent or negligence in the course of performing their duties, the State or a public entity shall bear liability for compensation. In this case as well, if the seizure is illegal and it can be said that there was a breach of the duty of care normally expected in the performance of duties by the official, a claim for state redress will be considered. However, the fact that an administrative disposition was illegal or unjust as a result is not the same as recognizing intent or negligence under the State Redress Act. Even under Supreme Court precedent, in order to hold the State liable for compensation, circumstances must exist that allow for the evaluation that the disposition was made idly without fulfilling the duty of care normally expected in the performance of duties. Therefore, while the release and return of the seized property is an important circumstance, it does not immediately mean that state redress will be granted solely on that basis, and the accumulation of evidence is indispensable.
- Infringement of personality rights by staff conduct—if the statements such as "choose between death and bankruptcy" and the act of accompanying the individual even to the restroom are true, they constitute coercive behavior that exceeds the administrative purpose of collection, and should be considered on a different dimension from tax law as issues of personality rights and mental distress. Furthermore, if the testimony that staff touched personal clothing at the seizure site despite the individual's refusal is true, it is extremely serious as an act infringing upon personal dignity and privacy. Even though collection procedures are based on the public interest purpose of securing national taxes, it does not mean that the personality, life, and health of the delinquent taxpayer and their family may be unnecessarily infringed upon in the course of carrying them out.
What do judicial precedents and prior decisions tell us?
Some readers might think, "Is there anything illegal about what the government office does?" However, past judicial precedents and the National Tax Agency's own circulars actually indicate that there are clear limits to collection procedures.
There are actual cases where a disposition has been revoked due to excessive seizure. The February 21, 2019 judgment of the Nara District Court is a case where the seizure of entire real estate having a value equivalent to approximately 10 times the delinquent tax amount as a delinquent tax disposition for fixed asset tax and other taxes was deemed illegal as exceeding or abusing the discretionary power of the collection official, and the court approved the partial revocation of the seizure disposition. Although it is a local tax case, standards similar to Article 48 of the National Tax Collection Act were at issue through the Local Tax Act.
This judgment concerns a case of real estate seizure, and the target property differs from the seizure of household movable property as in the present case. Therefore, it cannot be said to be a direct precedent that applies as is. However, it is important in that it indicates that when tax collection officials select property to seize, they should consider the amount in arrears, property value, divisibility, and the impact on the delinquent taxpayer's livelihood, and that seizing more property than necessary can be illegal as an abuse or excess of discretionary power.
However, while this Nara District Court ruling allowed the cancellation of the seizure disposition, it denied the claim for state compensation. This point is important. In other words, determining a seizure to be illegal and recognizing liability for damages on the part of the state or local government are legally separate issues.
Regarding property exempt from seizure, the National Tax Agency's basic directive provides even clearer criteria. Regarding property exempt from seizure under Article 75 of the National Tax Collection Act, if property whose exemption from seizure is externally obvious is seized, that seizure is deemed invalid. Therefore, if the children's study desks, furniture indispensable for daily life, kitchen utensils, and other items in question in this case fall under this category, the seizure of those items may not have merely been an unjust disposition, but rather a seizure that was void ab initio.
Furthermore, the National Tax Agency's basic directives also indicate the view that if a collection official, intentionally or negligently, unlawfully loses or damages seized property in the course of their duties and causes damage to a delinquent taxpayer or others, the State bears liability for compensation pursuant to Article 1, Paragraph 1 of the State Redress Act. This means that the stance is not one in which the liability of the State is never an issue regarding illegal tax delinquency dispositions.
However, the reality is not so easy. Even in a research collection by the Tax College, a training institution for the tax authorities, it is analyzed that it is not easy to restore rights and interests through state compensation for illegal seizures. This is because when procedures are formally in place, it becomes difficult to prove the individual official's intent, negligence, or breach of the duty of care. That is precisely why, in cases like this one, it is critically important to preserve evidence as completely as possible—including seizure records, photos, videos, audio recordings, reports, appeals documents, documents related to requests for correction of personal information, materials for requests for review submitted to the National Tax Agency, interactions with the authorities, and the process leading up to the return of property.
This is not just a problem for one person.
This party may not be an isolated exception. People complaining of unfair treatment regarding National Tax Agency investigations and delinquent tax dispositions exist across the country.
He has reportedly provided information regarding the details of this seizure to multiple news organizations and asked them to publish articles about it. However, it has not led to any news reports at this time. He also told a member of the National Diet that he wanted them to take up the matter in parliament, but the response was that it would not be easy to achieve. He is appealing for the person in charge at the regional taxation bureau in question to be summoned to the National Diet and held strictly accountable.
Efforts are reportedly underway to gather the voices of individuals affected by National Tax Agency investigations and delinquency dispositions, visualize their testimonies while redacting names, regions, and industries, and—with a certain level of solidarity—even consider filing a joint lawsuit. This initiative aims to connect experiences that were previously buried as isolated points into a continuous line. This includes people who feel they were coerced into making statements against their will, those who harbor doubts about the investigation process but have been unable to speak out, and those who feel their lives and businesses have been severely devastated by delinquency dispositions.
If it were a single voice, it might be treated as an "isolated incident." However, when multiple testimonies and materials of the same kind gather, and the issues of procedures, property selection, attribution confirmation, and staff conduct commonly emerge, it becomes something that should be examined as a structural problem.
He suspects that this was not an accidental deviation by a few employees, but rather a method that has been repeatedly used at the relevant regional taxation bureau, given that the employees did not appear to realize their actions were illegal, and their coercive remarks and division of roles felt extremely practiced. Of course, that point requires future investigation and verification. However, confirming the existence of similar cases is also essential to prevent recurrence.
Aside from the direct approach of a state redress lawsuit, there are pathways to compel the authorities themselves to reconsider and correct their actions through a combination of preserving evidence, gathering testimonies, raising systemic issues, lobbying legislatures and the administration, and public scrutiny.
Remaining question
What on earth was that seizure—one that severely shook an individual's business and life, seized all cash and deposits, deprived them of communication means, targeted children's desks, living furniture, air conditioning equipment, and even movables necessary for medical purposes for attachment, and ultimately resulted in the return of all movables?
Despite all this, according to the person concerned, there has been no clear apology from the authorities, and it has not been officially acknowledged that the seizure was illegal or what the National Tax Agency's instructions contained. The authorities are said to have stopped at explaining that "there may have been flaws in confirming the attribution."
It is the judiciary that makes the final legal assessment. However, at the very least, the sequence of events in which a disposition previously explained as lawful has led to the release and return of all seized movable property after approximately two years is an important fact that should be examined. In particular, from the perspectives of property exempt from seizure under Article 75 of the National Tax Collection Act, excessive and fruitless seizure under Article 48 of the same Act, the confirmation of the attribution of corporate property and the personal property of the representative, the seizure of movable property necessary for communication and medical purposes, the damage to seized property and its restoration to its original state, and the credibility of the investigation report, this case must be carefully recorded.
Speaking out is not isolated anger. It is the first step to protect someone who might face the same ordeal next.
This article is based on the testimonies and claims of the involved parties, processed and structured in a manner that prevents the identification of individuals. The legal evaluations contained herein organize potential legal issues, assuming the testimonies are factual, in light of general laws, notifications, and judicial precedents. This article does not assert the factual commission of a crime by any specific individual or employee, nor does it conclude that authorities have explicitly acknowledged any illegality. Information that could lead to the identification of individuals—such as region, age, family structure, medical condition, and industry—has been abstracted as necessary. The final legal evaluation should be determined through appropriate judicial or other procedures, taking into consideration relevant materials, evidence, and the claims of both parties.
