A Costly Liaison: Agency Relationship and Liability for the Tax Debt

Abstract

The state's penchant for legislating measures to protect its revenues is recognized in law. However, the provisions for enforcing recovery of tax debts must be clear as well as fair. The agents should not be financially crippled for no fault of their own. TAX compliance is not like a walk in the park. If it were so, it will be the eighth wonder of the world. Especially in transactional, Indirect tax systems with their thicket of opaque procedures and inscrutable forms, the liabilities always loom large even for those who may consider themselves as tough nuts or thick skins. A disapproving frown of or a call and summon from a tax official may suffice to wipe off a smile from the face of tax-payers. This is perhaps a solid reason for the tax payers to consider engaging agents to shepherd and deliver compliance with the law. Tax compliances are written by the officials, for the officials. Taxpayers rarely count in the procedural formulations. In this murky scenario, Agents could help to smoothen and lubricate the rough edges of the tax system and salve the angst of the tax payers.