Facts

Parties and instances: The spouses [A.A.] and [B.A.] (appellants), represented by a fiduciary company, against the Cantonal Administration for Direct Federal Tax (Schwyz). The prior instance was the Administrative Court of the Canton of Schwyz, Chamber II, decision of 12 February 2019 (II 2018 48). The subject matter of the dispute is direct federal tax for tax period 2012.

Facts: In their 2012 tax return, the spouses declared ground lease interest of CHF 58'500.--, with a handwritten note on the barcode sheet reading 'Deduction DFTA 1/3 ground lease interest'. The assessment decision of 18 February 2014 for cantonal taxes and direct federal tax did not record the ground lease interest for direct federal tax. Upon inquiry by the taxpayer, the assessor confirmed that a deduction had not been made and that the property income had inadvertently not been taken into account. By corrected assessment decision of 31 March 2015, the taxable income for direct federal tax 2012 was increased by CHF 58'500.--. The decision identified the cause as a software or programming error.

Proceedings: The cantonal administration dismissed the objection on 10 April 2018. It denied a programming error and cited a manual recording error. The Administrative Court dismissed the spouses' appeal on 12 February 2019. It held that the administration's reasoning was not entirely convincing, without sufficient proof of a manual error, and considered an at least partial software or programming error to be more likely. By appeal in public law matters of 4 April 2019, the spouses requested that the decision be set aside. The administration and the Federal Tax Administration requested dismissal.

Legal question: Whether the erroneous assessment may be corrected by way of correction (Art. 150 DFTA, Art. 52 DTHA), in particular whether a software or programming error is a correctable clerical error and who bears the burden of proof for the correction condition.

Considerations

Admissibility and scope of review: The appeal in public law matters against the final cantonal decision is admissible (Art. 82 let. a, Art. 86 para. 1 let. d FSCA in conjunction with Art. 146 DFTA). The Federal Supreme Court reviews federal law ex officio with full cognition (Art. 106 para. 1, Art. 95 let. a FSCA). The prior instance's findings of fact are binding unless they are manifestly incorrect (arbitrary) and correcting the defect could be decisive (Art. 105 FSCA, Art. 97 para. 1 FSCA). The duty to raise and substantiate complaints also applies here.

Numerus clausus of grounds for amendment: In tax law, final assessments may only be amended on the grounds exhaustively regulated by law: revision (Art. 147 ff. DFTA, Art. 51 DTHA), correction (Art. 150 DFTA, Art. 52 DTHA) and subsequent tax assessment (Art. 151 ff. DFTA, Art. 53 f. DTHA). A general reconsideration is excluded, with the exception of reconsideration within the objection period.

Correction as clerical error: Correction serves the informal rectification of mere clerical errors that wrongly reproduce the authority's actual intention (errors in the 'manual work'). Substantive errors of the 'intellectual work' (incorrect factual or legal assessment) must instead be asserted through the legal remedies. The distinction is blurred in computer-assisted assessment; the interpretation of Art. 150 DFTA must take account of the changed working method.

Burden of proof: The Federal Supreme Court confirms that the tax authority, as the beneficiary of a correction that leads to higher taxes, must prove the condition for correction. In the present case, it could not be clarified whether the cause was a manual transcription error by the assessor or a programming error. Proof of a purely manual error has therefore not been furnished; the correction is only permissible if a programming error would also be correctable.

Case law on software and program errors: The Federal Supreme Court refers to older case law under the former law (judgment…