In the program of which we publish a transcript, a lawyer explains why what happened in the Tai Ji Men Case falls under Article 129 of Taiwan’s Criminal Code, punishing the crime of unlawful collection.
by Bitter Winter
Article 4 of 5. Read article 1, article 2, and article 3.
An article already published in Bitter Winter on October 11th, 2024.
Host: Thank you, Lawyer Tsai. The lawyer just pointed out [see installment #3 of this series] several major and obvious illegalities or flaws. I believe that we don’t even need experts or scholars to explain this; let’s ask the audience online. This is something that the average person can immediately recognize as illegal just by hearing it—no expert explanation is needed. So, why is our country still capable of doing such things?
Let’s also think about this. Since these tax assessments are fundamentally invalid from the start, is there really no legal constraint on these government officials? The law not only binds citizens but should also bind these officials, ensuring they do the right thing. When they violate the law, doesn’t that mean they have breached Article 129 of the Criminal Code, which addresses illegal taxation? Next, let’s welcome lawyer Tsai to explain this aspect to us.
Tsai Fu-Chiang: Article 129 of the Criminal Code, which deals with the crime of unlawful collection, states clearly in its first paragraph that if a public official knowingly collects taxes or other revenues that should not be collected, they may be sentenced to imprisonment for at least one year and up to seven years, and may also be fined up to 210,000 NTD. This is exactly what the host referred to as the crime of unlawful collection under Article 129 of the Criminal Code. Now, an essential element of this crime is the requirement that the public official must “knowingly” collect taxes that should not be collected.
Let’s take a look at the Tai Ji Men case. Did the National Taxation Bureau knowingly collect taxes that should not have been collected? To prove someone’s subjective intent or awareness of unlawfulness, we have to rely on objective evidence. If it was clearly known that these facts were incorrect, yet the tax bills were still issued, it strongly suggests that there was intent to unlawfully collect taxes.
The first piece of evidence showing the bureau’s bad faith in issuing tax bills is the inherent contradiction in the indictment. On the one hand, it claims that the funds were illicit income from fraud, while on the other, it states that they were legitimate tuition fees from a cram school.
This is already a contradictory part; according to regulations, they shouldn’t issue a tax bill. They need to wait for a criminal court’s final decision before proceeding with any actions. In this case, the National Taxation Bureau immediately issued a tax bill without conducting any investigation. This is precisely why the Control Yuan listed seven major illegalities and deficiencies in their report. The National Taxation Bureau’s letter to the Taipei Investigation Bureau, as well as to other agencies, stated that they issued the tax bill and imposed the taxes directly based on the Investigation Bureau’s findings, without conducting any independent investigation.
You didn’t conduct any investigation at all; you just issued the tax bill blindly. Subjectively, you already decided, “I’m going to issue this bill, right?” So, this subjective illegality is obviously present. Now, let’s look at several important facts. You claim that when you first issued the tax bill, the revenue wasn’t going into your own pocket, so there couldn’t have been any malicious intent. But after you knew that the tax bill was wrong, you should have stopped enforcement, you should have withdrawn it. Yet, you didn’t, and instead, you asked the Administrative Enforcement Agency’s Hsinchu Branch to continue the auction. That’s clearly malicious behavior!
Didn’t I just mention a lot of evidence? The National Taxation Bureau of the Central Area, in a letter to the Ministry of Finance, stated that when they issued the tax bill, it covered six different years. Out of those, only 1992 was finalized, while the other five years were still under appeal. They even said that these six years were based on the same set of facts for the tax assessment, but if any different appeal decisions or court rulings were made in the future, they would follow the new facts and revoke the tax assessment for the 1992 tax year in accordance with Article 117 of the Administrative Procedure Act. But did they do that? They themselves said they should, but did they actually do it? No, not only did they fail to do so, they even pushed the Administrative Enforcement Agency to forcefully auction the property. If this isn’t illegal tax collection, then what is? They clearly knew they shouldn’t collect the tax, yet they proceeded anyway!
They claimed that their tax assessments were based on the same set of facts, but new evidence had already emerged for the other five years. They even admitted in their 2012 and 2013 re-assessments that Tai Ji Men was not a cram school. So, knowing that issuing a tax bill for the 1992 tax year based on the “cram school” classification was wrong, and with new evidence coming to light for the other years, they should have revoked that administrative decision. Instead, not only did they fail to do so, they proceeded with forced enforcement. This is clearly illegal tax collection.
Another clear indication is No. 1406 of 2019 case in the Taipei High Administrative Court, which involved administrative enforcement. The court sent two letters to the Central District National Taxation Bureau. One of these letters, dated May 5, 2020, explicitly instructed the Taxation Bureau to follow the decision from No. 422 of 2018 case, which clearly stated that Tai Ji Men is a Qigong and martial arts menpai, not a cram school.
In addition to the criminal court’s decisions, the Executive Yuan’s investigation of the 7,401 ceremonial gifts provided significant evidence. Even the National Taxation Bureau itself, in 2012 and 2013, acknowledged that Tai Ji Men is not a cram school. These new facts and evidence should have led the Taxation Bureau to reassess and issue a new ruling. According to Article 40 of the Tax Collection Act, they are obligated to withdraw enforcement when faced with these facts.
The court has already made this clear—there’s no way the tax authorities can claim ignorance. If they try to feign ignorance, pretending they don’t understand administrative law, the Taipei High Administrative Court won’t allow such behavior.
The court mentioned that decision No.422 of 2018 was very clear. The court instructed the tax authorities to follow its directives. Then, on July 23 of the same year, another letter was issued, further clarifying the issue. It stated that since the tax authorities had issued tax bills for six years based on the same facts, and for five of those years, they had already settled with the taxpayers, correcting the tax amount to zero, it was unreasonable to treat the sixth year differently. They should handle it consistently.
The letter specifically stated that the tax authorities should recalculate based on the same criteria and submit a report for explanation. Furthermore, it explicitly instructed the authorities not to rely on the 1996 Supreme Administrative Court ruling (regarding the tax year 1992), as the decision No.422 of 2018 recognized the emergence of new facts and evidence. It clarified that the previous decision no longer had binding force over any recalculation or new ruling.
It’s been clearly stated in writing, so why haven’t you taken any action? You, Central District Taxation Bureau, are doing nothing despite knowing that the tax bills issued based on the classification as a cram school were wrong and illegal. After all, in the same case over five other tax years, you have already corrected the classification to something other than cram school. For those five years, the cost-to-revenue ratio was also corrected to zero.
However, for the tax year of 1992, you’ve done nothing—no corrective actions, and you’ve allowed the error to persist. Not only do you refuse to halt enforcement or revoke the wrongful decision, but you also refuse to adjust the tax amount. This clearly aligns with Article 129 of the Criminal Code, which states that knowingly collecting taxes that should not be collected is illegal. At this point, there’s no room for debate. The intentional wrongdoing is extremely evident and clear.