Possible Tax Evasion Due to Missing Income Tax Return

BFH ruling of May 14, 2025 – Ref. VI R 14/22

Anyone obligated to submit an income tax return and fails to do so can, if perpetrated with intent, be criminally liable for tax evasion by omission. This was reaffirmed by the Federal Fiscal Court (BFH) in a ruling from May 14, 2025 (Ref. VI R 14/22). The key factor is particularly whether and to what extent the tax office actually “knows” the relevant tax information.

Background of the decision was a case where a married couple did not submit their income tax return for two consecutive years. Although the employers had submitted electronic wage tax statements to the tax administration, the responsible authority did not retrieve this data. The BFH clarified: The mere technical retrievability of data does not automatically suffice to assume the “knowledge” of the relevant departments in the tax office.

Legal Foundations: Obligation to Declare, Tax Reduction and Intent

The obligation to submit an income tax return can arise, among other things, from the provisions of the Fiscal Code (AO) and the income tax law. Particularly in the case of a so-called mandatory assessment (e.g., for certain salary situations, tax class combinations, or additional incomes), there is an obligation to submit.

Tax evasion under § 370 AO is considered if tax-relevant facts are not declared contrary to obligation and thus taxes are reduced or unjustified tax advantages are obtained. Also relevant here is tax evasion by omission, if no return is submitted despite an obligation.

The prerequisite is regularly intent. This means: The person concerned must at least accept that their behavior (or omission) may lead to a reduction in taxes. Negligent behavior, however, can “only” lead to an inadvertent tax reduction under § 378 AO which can be sanctioned as a regulatory offense.

The Facts: Switch to Mandatory Assessment – but No Declarations

In the decided case, the couple had regularly submitted tax returns in the past. Until 2008, only the husband earned an income. From 2009 onwards, the wife also received a salary. This changed the tax situation: There was a switch from voluntary assessment to mandatory assessment. However, for the years 2009 and 2010, no income tax returns were submitted.

The employers properly submitted the electronic wage tax statements. The data was stored in the tax administration and was generally retrievable under the tax number – but was not automatically part of the electronic tax record or automatically integrated into the specific processing procedure.

Estimation by the Tax Office, Late Payment Penalties, and Assessment Period

In 2018, the tax office discovered the missing returns. It then issued estimated assessments and imposed late payment penalties. Additionally, the authority apparently assumed an extended assessment period, which can be considered in cases of tax evasion.

To classify: Normally, a regular assessment period applies for the assessment of taxes (typically four years). In cases of Tax Evasion this period may be extended according to legal regulations (often to ten years). Whether these conditions are met is a question of the individual case – particularly with regard to intent and the elements of the offense.

Lower Court and BFH: When does the tax office have “knowledge”?

The couple contested the notices and argued that tax evasion was not applicable because the relevant facts had already been known to the tax office due to electronically stored income tax data. The Fiscal Court (FG) of Münster initially followed this line: If the responsible persons could have accessed the data at any time, tax evasion could not be assumed.

The BFH saw it differently, overturned the decision, and referred the matter back. According to the BFH, it doesn’t depend on whether information is stored somewhere in the tax administration’s data records when it comes to “knowledge.” Rather, it depends on whether the organizationally responsible processors in the specific tax case actually had access to the information or whether this information was available in a manner that it could be assigned to the processing procedure and was actually available.

Thus, the BFH made it clear: Mere data storage or mere retrievability does not automatically suffice to affirm the authority’s knowledge. This can especially apply if data is not automatically transferred to the tax file and the responsible department has not actually processed it in the specific case.

Consequence: Tax evasion by omission remains possible

The decision has clear practical implications: Even if employers (or other entities) transmit data electronically to the tax authorities, this does not automatically relieve taxpayers from the legal obligation to file an income tax return. One who does not submit a return despite being obliged to do so can – with the appropriate intent – commit tax evasion by omission.

In the specific proceedings, the BFH did not definitively decide whether tax evasion had actually occurred but referred the case back to the FG Münster for further examination. It will be necessary to clarify there whether the conditions (including intent) are met in the individual case.

What those affected should pay attention to: Submission, correction, and criminal risks

Anyone who finds that income tax returns were not submitted despite the obligation should not underestimate the risk. Depending on the situation, consequences may include additional tax payments, ancillary services (e.g., interest), as well as tax-related criminal or fine law consequences.

It’s also important: Doing “nothing” usually does not solve the problem. Depending on the situation, it can lead to estimations, back payments, and an extended investigation over several years.

Consider a voluntary disclosure – but only under strict conditions

If incorrect or incomplete information has been provided or necessary tax returns have been omitted, consideration of a penalty-free voluntary disclosure according to § 371 AO may be applicable in individual cases. An effective voluntary disclosure typically requires that the incorrect information is completely corrected and all undeclared tax offenses of a tax type are completely re-declared.

Moreover, no so-called barriers must have arisen (e.g., if an audit order has been announced, investigative measures have started, or the offense has already been discovered and the concerned party knows or should expect this). The requirements are high; mistakes can lead to the voluntary disclosure failing to have its penalty-free effect.

Note on classification and legal certainty

This article provides a general overview of the BFH decision (Az. VI R 14/22) and typical legal assessment standards. It does not replace an individual examination. Whether there was an obligation to file, whether intent is present, what deadlines apply, and which steps are advisable always depend on the specific circumstances.

Suspicious Reporting / Legal Notice Safety:The article describes an adjudicated or judicially handled matter and presents legal principles. It does not make any assertions about specific individuals beyond the decided case. Phrases such as “can,” “may be considered,” and “in individual cases” are consciously chosen to avoid making inadmissible factual claims about third parties.

If you want to determine whether there was an obligation to file in your case, whether a correction or submission is required, or whether a voluntary disclosure is still possible, early consultation is advisable.