This lesson outlines the core administrative processes that govern the lifecycle of a taxpayer’s liability, from initial assessment to final determination. It distinguishes between the self-assessment system prevalent in the US and the administrative assessment system used in some European jurisdictions.

• Self-Assessment: A system where the taxpayer is responsible for calculating their own tax liability, filing a return, and paying the tax due. The tax authority’s primary role is to verify these self-assessments through audits and risk assessment. This system is the cornerstone of most modern tax administrations.

• Administrative Assessment: A system where the tax authority (or tax officer) calculates the tax liability based on information available, and the taxpayer is notified of the assessment. The taxpayer then has the right to dispute the assessment.

• Access to Information: A tax administration needs access to information for purposes of making or checking tax assessments. This can be voluntary (e.g., information supplied by the taxpayer on a return) or forced (e.g., through audit powers and third-party information reporting).

• The Assessment and Dispute Resolution Cycle: The process typically follows a structure:

  1. Filing: Taxpayer submits declaration.

  2. Assessment: Taxpayer self-assesses or administration makes assessment.

  3. Dispute: Taxpayer disputes the assessment if necessary.

  4. Internal Objection: Taxpayer initiates internal review procedure.

  5. Independent Review: Appeal to a specialist tax tribunal or general courts.

  6. Collection: Once final, the tax is collected.