Facts
On 1 December 2014 the Tax Administration of the Canton of Basel-Landschaft opened back-tax and tax-penalty proceedings against the appellant [A.] concerning cantonal and municipal taxes as well as direct federal tax for the periods 2010 to 2013. The trigger was a report from the Public Prosecutor's Office of Basel-Landschaft that the appellant was the beneficial owner of a bank account at the BLKB (balance CHF 68'556.30) and of a bank safe deposit box containing cash of CHF 261'000.--. These assets had not been declared in the tax returns for 2004 to 2013.
The Tax Administration calculated back taxes for 2005 to 2012 and added the income to the assessment at its discretion, because the household income did not make it possible to have saved CHF 330'000.--. The appellant acknowledged back taxes and a penalty for undeclared assets for 2008 to 2012, but disputed the back taxes and the penalty for untaxed income. He claimed the cash originated from taxed income saved since 2008.
By decisions of 28 July 2016 the Tax Administration imposed back taxes and a tax penalty of 100% of the back tax, together with default interest, for direct federal tax, cantonal tax for 2008 to 2012 and municipal taxes. The Cantonal Court of Basel-Landschaft dismissed the appeals by two judgments of 11 December 2019.
By public law appeals of 14 September 2020 the appellant requested that the judgments be set aside, that back taxes and penalties for 2008 to 2012 on income be waived, that the assessment be made according to the tax return of 6 January 2015, and that the attached assets be released with interest at 5% from 18 November 2013. He also requested that the proceedings be joined. The Tax Administration and the Federal Tax Administration (FTA) requested that the appeals be dismissed.
The appellant essentially argued that between 2004 and 2013 he earned gross CHF 242'617.--, received a gift of CHF 16'000.-- and insurance benefits of at least CHF 23'000.--, resulting in at least CHF 281'000.-- of taxed income in total. His living expenses had been paid from a 'family fund' (bank account of his brother) built up by family members, and the contributions were gifts. He submitted account statements showing cash withdrawals of CHF 316'269.50 and offered to have himself examined as a party and two brothers examined as witnesses.
Considerations
Proceedings 2C_759/2020 (direct federal tax) and 2C_760/2020 (cantonal tax) concern the same facts and the same legal questions and are joined pursuant to Art. 71 FSCA in conjunction with Art. 24 FCPA. The appeals against final cantonal decisions in public law matters are admissible under Art. 82 let. a, Art. 86 para. 1 let. d FSCA, Art. 153 para. 3 DFTA and Art. 73 DTHA, and were filed within the time limit and in the correct form. The Federal Supreme Court is bound by the findings of fact unless they are manifestly incorrect (arbitrary) (Art. 105 FSCA); it reviews harmonised cantonal tax law freely, and autonomous cantonal law only for arbitrariness.
In back-tax proceedings the investigation principle applies, and the standard of proof of full conviction, or probability bordering on certainty, is sufficient; indications and natural presumptions are admissible. Taxpayers have a duty to cooperate, the breach of which may constitute an indication. Under Art. 115 DFTA, offered suitable evidence must be taken, but the court may dispense with it through anticipatory assessment of evidence if the conviction would not change without arbitrariness. The burden of proof follows the theory of norms: the authority bears the burden for facts establishing tax liability, and the taxpayer for facts reducing tax. Where only the extent of the tax factors is unproven, an assessment at discretion takes place under Art. 130 para. 2 DFTA.
The lower court was entitled, based on the non-declaration of the cash and the lack of savings capacity from income taxed since 2008, to infer untaxed origin. The appellant himself had stated that he had saved the money since 2008; the lower court was entitled to hold him to that. That parts may originate from wages and unemployment benefits does not suffice to establish arbitrariness. The anticipatory assessment of evidence by which the witness examinations were omitted is not objectionable, especially as it is implausible that…