Statute of Limitations for Direct Federal Tax 1995/1996

Facts

The appellant [X.] ran an engineering and planning office in Biel as a sole proprietorship. The tax administration of the canton of Bern assessed him for direct federal tax 1995/1996 with a taxable income of CHF 25,565.--. In 2002, house searches were conducted at [X.] , and the tax administration initiated a tax reassessment and tax evasion procedure. The tax administration issued a tax reassessment decision for direct federal tax 1995/96 with a tax reassessment of CHF 176,891.-- and default interest of CHF 88,180.10. The appellant lodged an objection, which was rejected by the tax administration. The appellant filed an appeal and complaint with the Tax Appeals Commission of the canton of Bern, which dismissed his complaint regarding direct federal tax for the tax period 1995/1996.

The appellant requested the Federal Court to revoke items 3 and 4 as well as item 5 of the decision of the Tax Appeals Commission of the canton of Bern and to revoke the objection decision of the tax administration of the canton of Bern without replacement. The tax administration and the Tax Appeals Commission of the canton of Bern requested the dismissal of the complaint.

Considerations

The Federal Court had to decide whether the direct federal tax 1995/1996 had expired. The appellant claimed that the taxes for the years 1995 and 1996 had expired. The Tax Appeals Commission of the canton of Bern adjudicates complaints pursuant to Art. 140 et seq. DFTA as the sole cantonal instance. The contested decision is therefore cantonally final in the sense of Art. 86 para. 1 lit. d FSCA.

The question of expiration is of a material legal nature. In public law, the question of expiration is to be considered ex officio, provided that the community is the creditor of the claim. The expiration defense is to be examined first. The absolute tax expiration expires 15 years after the end of the tax period to which it relates.

The Federal Court decided that expiration must also be taken into account if it occurs not in the cantonal proceedings but only during the…