Facts
The respondent, [X.] , received in 2002 a payment of disability pension arrears for the period from 1 March 1996 to 30 June 2002 in the amount of CHF 214'912.--. As of 1 July 2002, he received a pension of CHF 3'242.-- per month. The tax administration of the canton of Basel-Landschaft assessed the respondent for the 2002 state tax with a taxable income of CHF 256'761.-- and for the 2002 direct federal tax with a taxable income of CHF 257'919.--. The respondent lodged appeals, which were rejected. The Tax Court of Basel-Landschaft and the Cantonal Court of Basel-Landschaft ruled in favor of the respondent, but the Federal Tax Administration lodged a complaint with the Federal Court.
Considerations
The Federal Court examines ex officio and with free cognition which remedy is admissible and to what extent it is to be considered. The Federal Tax Administration is authorized to challenge the decision of the lower instance pursuant to Art. 103 lit. b FJA and Art. 73 Abs. 2 DTHA.
The Federal Court applies federal law ex officio in administrative complaint proceedings. It is not bound by the requests of the parties pursuant to Art. 114 Abs. 1 FJA and can approve or reject the complaint for reasons other than those alleged. The income tax of the direct federal tax includes all recurring and one-time income. Capital commutations for recurring benefits are to be calculated, taking into account the other income and the permissible deductions, at the tax rate that would result if a corresponding annual benefit were paid instead of the one-time benefit.
The payment of pension arrears for 76 months is to be divided by 76 and then multiplied by twelve…