The production of forged documents during a tax audit should not justify penalties for fraudulent conduct

A company was subject to a tax audit, following which the French Tax Administration (administration ) issued, among other things, a tax assessment to the managing partner of that company.

The taxadministration n then applied an 80% surcharge, finding that the taxpayer had engaged in fraudulent practices because falsified bank statements had been submitted during the audit.

The reassessment was challenged all the way to the Administrative Court of Appeals, which upheld the application of these surcharges.

This ruling is surprising given that the Conseil d'Etat has consistently held that the assessment of the intent required to establish fraudulent conduct must be made as of the date of the tax return and that the taxpayer’s conduct during the audit is not sufficient to establish such intent (see, in particular , CE, 8th and 3rd Sub-Sections, June 27, 2012, No. 342991, Lebon T.).

Under these circumstances, unless one has a DeLorean, it is difficult to see how the production of a forgery during an audit could be used to establish that fraudulent acts were committed at the time the return was filed.

CAA Marseille, Oct. 15, 2026, No. 25MA03348

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