Practical guide on how to deal with Inspectors of the Federal
Administration of Public Revenue (AFIP) or other State departments
In the present article, we provide a series of steps that should be
considered in case of inspections carried out in different companies or at
the legal domicile of natural persons. The idea is to prevent an employee
from transmitting inaccurate data to the authorities and, therefore,
causing economic and fiscal harm for the responsible of the exploitation.
At all times, it is important that the inspectors talk to a person who has
specific knowledge about what they are asking. For instance, if it is an
AFIP inspection, the receptionist or errand boy should never answer the
questions, the company’s accountant should do it (or at least a manager
or administrative employee who knows how are the company’s accounts
being handled and can respond correctly to what the inspectors want to
know). Although this article was mainly intended as a guide to deal with
accounting inspections, its core principles apply to all types of
requirements and inspections, both of public officials and trade union
representatives.
The suitability of the person transmitting the answers serves a dual
purpose: it avoids possible harm caused by the transmission of erroneous
information given by someone who is not qualified to do so and / or does
not have the knowledge about the internal operation of the company, and
it is also a way of saving the inspectors’ time. There is no point in having
to ask the same question to several people (because in every case, the response of people who do not have the specific knowledge regarding the
inspection should be “I do not know”).
Below, we have listed our recommendation of steps to follow. Surely, it
will have to be adapted to the reality of each company, but it serves as a
general guide:
1. Inspectors must be received at the reception by the receptionist, who
must check that the natural or legal person to investigate effectively
belongs to the company or group and find out exactly what is the purpose
of the inspection and what they want to investigate. Inspectors may
refuse to disclose this information until the representative of the company
is present. Under no circumstances should the receptionist be introduced
as the representative of the company!
2. The receptionist shall ask the inspectors to wait at the reception until
the President, the General Manager and / or the Chief Financial Officer
have been informed of the visit and its purpose (if it had been unveiled).
At that time, the person who has been informed of this event must be
capable of solving the problem or tell the receptionist who is the right
person to handle the situation. In this case, the principle “If you do not
know, stay quiet” prevails, since someone with good intentions but little
knowledge, for trying to solve a problem quickly, may harm the company.
It is preferable that the inspectors wait a little longer and be assisted by
the right person.
3. Whoever has to provide the inspectors with the information, at that
moment the receptionist should also contact the General Manager or the
Chief Financial Officer for assistance. They probably have to prepare
certain documents or ask the accountant for them and / or consult the
Legal Counsel. It is also important for the members of the company to be
aware of the presence of inspectors.
4. Immediately, the General Manager or the Chief Financial Officer must:
a. Inform the receptionist to make the inspectors wait until the President,
the General Manager, the Chief Financial Officer, the Legal Counsel or
the Accountant of the company has arrived.
b. Communicate with the Legal Counsel and the Accountant to confirm
the course of action to take. As a general rule, it is important to consult
both of them to reconcile the different professional opinions.
c. Go to the reception, introduce as the representative of the company
available at the moment and ask the officials to wait until the Legal
Counsel and / or Accountant arrive, if necessary.
5. While the inspectors are waiting, arranging practical details for the
meeting may be useful (have a conference room, gather the members
that will attend the meeting, get all the necessary documents, etc.).
6. Once the Legal Counsel, the Accountant, the President, the General
Manager and / or the Chief Financial Officer have arrived (as necessary)
and are advised by the corresponding professionals, follow their
instructions.
7. If the Legal Counsel is delayed or cannot arrive within one hour, the
company representative will start a meeting with the officials in an empty
conference room. Unless the Legal Counsel has indicated that it is not
necessary, the representatives present at the meeting must be in
constant contact with the Legal Counsel via mobile phone. Under no
circumstances may this be considered illegal since it is part of the
exercise of self-defense right and the right of not testifying against oneself
in the case of natural persons.
8. Upon arrival of the Legal Counsel, or according to its instructions, the
identity of the officials must be verified, asking for their identification cards
and other documents evidencing that they are part of the organization
they claim to represent.
9. After identification, the officials must submit a written authorization
indicating their legitimate competence to carry out the investigation or a
formal resolution of the organization they represent for the same purpose.
The authorization shall state the subject matter and purpose of the
investigation.
Additional instructions must be indicated at that place or via mobile phone
by the Legal Counsel or the Accountant depending on each case. This
procedure guide will be effective only to the extent that the company can
obtain a suitable person to give the required information and supporting
documentation in due time and proper form.
Estudio Nunes & Asoc.