Facts
The cantonal tax office of Zurich had assessed the [X. GmbH] for cantonal and communal taxes as well as direct federal tax for the year 2004, according to its discretionary assessment, with a taxable profit of 35,000 francs and a taxable equity of 20,000 francs, after it had not submitted a tax return despite being reminded to do so. The [X. GmbH] lodged an objection against these tax assessment decisions, which, however, was not entertained by the tax administration because the attached tax return 2004 and the annual accounts 2004 were not properly signed.
The Administrative Court of the Canton of Zurich partially upheld the appeals of the [X. GmbH] and referred the matter back to the tax administration for the conduct of the objection procedure. The cantonal tax office of Zurich lodged an appeal in public law matters against these decisions with the Federal Court.
Considerations
The Federal Court combined the two proceedings 2C_620/2007 and 2C_621/2007 due to their close connection. The respondent had not only requested the dismissal of the appeals but also a modification of the cost decision of the two administrative court decisions in her favor. However, she could not make this request in the context of her observations but would have had to introduce it into the proceedings by means of her own appeal.
The tax authority makes the assessment according to its discretionary assessment if the taxpayer has not fulfilled its procedural obligations despite being reminded to do so or if the tax factors cannot be determined without error due to a lack of reliable documents. Such a discretionary assessment can only be challenged due to obvious incorrectness, whereby the objection must be justified and any evidence must be mentioned.
The tax return must be signed by the obligor in person, the signature of a contractual…