Not all tax cases that I find interesting involve the Internal Revenue Code. I came across an fascinating case out of Strasboug, France, handed down by The European Court of Human Rights.
The court ruled in Eko-Elda AVEE v. Greece that the refusal to pay interest when refunding overpaid taxes violated property rights guaranteed by the European Convention on Human Rights. According to published reports, the unanimous decision found that the Greek government violated the rights of a gasoline firm under the convention, which guarantees "peaceful enjoyment" of possessions. The firm had to wait more than five years for reimbursement of the equivalent of 362,105 euros in wrongly paid income tax. The judges are quoted as saying, "The authorities' refusal to pay default interest for such a long period had upset the fair balance to be maintained between the general interest and individual interests." As a result, the Greek government was ordered to pay the firm 120,000 euros for pecuniary damage and 4,000 euros for costs and expenses, which amounted to a payment of just under $150,000 in U.S. dollars.
There seems to be something incongruous about having the term "Human Rights" and tax so intertwined in a decision. I am just not used to it. Can you imagine interest on overpaid taxes being described as a taxpayer's inherent human right? Then I find it fascinating that a government sees nothing wrong in holding on to substantial amounts of overpaid taxes for more than five years, and then fully paying it back and impliedly saying, "Thanks for the free use of the money. It really came in handy!"
Of course, I also wonder if the decision will be appealed, and how many other taxpayers can claim interest on overpaid taxes to the Greek government. I also wonder what other European countries subject to this court's jurisdiction also don't pay interest on overpaid taxes.
But here I am at a disadvantage when compared to accounting firms that belong to international firm associations. If they have clients that previously overpaid Greek taxes, they can probably simply call a member firm and determine if their clients can now exercise their rights and be paid interest for the time that Greece held on to their tax overpayment.
There may turn out to be a lot more interest in this case than I know.
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