Facts

Parties: [A. GmbH] (taxpayer, appellant) and the Cantonal Tax Administration of Appenzell Innerrhoden (assessing authority, respondent).

Subject matter: Direct federal taxes, tax periods 2011 and 2012; appeal against the decision of the Cantonal Court of Appenzell I.Rh., Administrative Court Division, of 3 March 2020 (V 11-2019).

Facts:

  • Until 31 December 2015 the taxpayer had its statutory seat in [B.] /AI, thereafter in [C.] /SG. Its sole shareholder and managing director is a natural person (see proceedings 2C_461/2020).
  • For tax periods 2011 and 2012 an assessment was made at discretion, as no tax returns were filed despite a reminder. The assessment decisions are final.
  • On 10 January 2019 the assessing authority informed that, on the basis of reports from the Canton of St. Gallen, real estate sales with previously unknown gains had taken place in tax periods 2011 and 2012. Supplementary taxes totalling CHF 339'235.-- and a fine of likewise CHF 339'235.-- (completed tax evasion, coefficient 100 percent) were announced.
  • After a meeting on 7 February 2019 with inspection of the files, the taxpayer was given a deadline until mid-March 2019 to submit exculpatory documents. It did not react. On 10 April 2019 the assessing authority issued the supplementary tax and tax penalty decisions.
  • The taxpayer lodged an objection and complained of erroneous reports from the Canton of St. Gallen, without reasons or evidence. The assessing authority set a further deadline for filing complete, signed tax returns. By objection decision of 5 June 2019 it did not enter into the objection for lack of cooperation.
  • On 3 March 2020 the Cantonal Court dismissed the appeal: the taxpayer had submitted neither accounts nor tax returns and had merely described the reports as incorrect, without substantiated proof.

Requests before the Federal Supreme Court: Annulment of the lower court's decision and waiver of the supplementary and penal taxes.

Issue: Whether the lower court correctly confirmed under federal law that the assessing authority was not permitted to enter into the objection (Art. 132 para. 3 DFTA).

Considerations

Subject matter of the dispute and scope of review: The subject matter of the dispute is only the question whether the lower court correctly confirmed under federal law the non-entry by the first-instance authority. The subject matter of the dispute may be narrowed but not expanded (Art. 99 para. 2 FSCA). Insofar as the taxpayer requests waiver of the supplementary and penal taxes, the appeal is inadmissible. The Federal Supreme Court examines federal law ex officio with full scope of review (Art. 106 para. 1, Art. 95 let. a FSCA) and is bound by the factual findings (Art. 105 para. 1 FSCA).

Discretionary assessment and reversal of the burden of proof: Under Art. 132 para. 3 DFTA, an assessment made at discretion may only be challenged on grounds of obvious incorrectness. This results in a reversal of the burden of proof (Art. 183 para. 1bis DFTA). Proof of incorrectness must be furnished comprehensively, either by submitting evidence that revives the duty of investigation, or by showing that the assessment is obviously excessive. This also applies in cantonal appeal proceedings.

Addition and standard of proof: Even in the case of a mere addition (Art. 130 para. 2 DFTA), a discretionary surcharge may be imposed. The authority must be convinced of the legally relevant facts on objective grounds (standard of proof for ordinary cases); indications are sufficient. The taxable person must dispute the existence and amount of the addition in detail. The Federal Supreme Court left open whether the reversal of the burden of proof also applies to a mere addition following a report from another canton, since the appeal had to be dismissed in any event.

Duty to cooperate and responsibility for auxiliary persons: The complaints about the failure of the bookkeeping and the lack of liquidity are irrelevant, since only the non-entry…