Facts
The opposing party [B.] held 8 shares in [X. AG] , the remaining shares of which were held by his brother and sister. By a resolution of the company dated 17 May 1996, [X. AG] was dissolved and [B.] was appointed as the liquidator. The liquidation surplus in the amount of CHF 458,956.-- was partially paid out in securities. [B.] did not declare the liquidation surplus as income in his 1997/98 tax return. The cantonal tax office of Nidwalden then initiated subsequent tax and penal tax proceedings and imposed a subsequent tax and tax penalty on [B.] for direct federal tax. [B.] filed a complaint against this with the Administrative Court of the Canton of Nidwalden, which upheld the complaints and revoked the subsequent tax and penalty decisions. The cantonal tax office of Nidwalden then filed an administrative court appeal to the Federal Supreme Court.Considerations
The Federal Supreme Court states that the liquidation surplus in the assessment year 1996 was taxable as income, as [B.] had acquired the claim to it at the latest on 16 October 1996. Since [B.] had not declared the surplus as income, the assessment was incomplete. However, the tax authorities could not simply assume the liquidation surplus to be known, as [B.] had disclosed the participation in [X. AG] and its liquidation, but had not declared the liquidation surplus itself as income. Therefore, a subsequent tax is to be levied.
Regarding the tax evasion, the Federal Supreme Court states that [B.] , as a businessman and…