Montesquieu wrote of the balance of powers as the foundation of liberty. But balance requires more than the division of competencies. It requires accountability for errors.
In a tax dispute, this accountability is radically asymmetric.
An entrepreneur who misreports a tax pays interest, penalties, sometimes faces criminal liability. The consequences are immediate, painful, existential.
An authority that issues a flawed decision pays nothing. The official who conducted the case for years only to lose in court faces no consequences. The treasury that spent those years profiting from unlawfully withheld funds does not return market-rate interest—only statutory interest, significantly lower.
This asymmetry has behavioral consequences. The authority has no incentive to act carefully. No incentive to conclude matters quickly. No incentive to admit mistakes. Because mistakes cost nothing.
Liability for damages is a mechanism that can correct this asymmetry.
The Psychology of Redress
There is a dimension of compensation not visible in the statutes: the psychological dimension.
An entrepreneur who has won a years-long dispute with the treasury rarely feels like a victor. They feel exhaustion. They feel bitterness. They feel they have lost years of life to a fight they should never have had to wage. And they feel—even if they do not articulate it—that the system emerged unscathed while they bear the scars.
Compensation does not reverse time. It does not restore a company that went bankrupt. It does not rebuild health destroyed by stress.
But it does something else: it confirms that harm occurred. That someone bears responsibility. That the system is not entirely immune.
Psychology speaks of the need for acknowledgment of harm as an element of the healing process. Compensation is such acknowledgment—expressed in the language the system understands: money.
The Disciplinary Effect
There is another argument for pursuing damages—one that extends beyond individual interest.
Every compensation paid by the State Treasury is a signal. A signal to officials that errors have consequences. A signal to the system that unlawful action carries a cost. A signal to other entrepreneurs that the fight is possible.
Compensation you did not pursue is savings for the budget—but also a signal to the system that it may act with impunity. Compensation you won is a cost—but also a correction of future behavior.
In this sense, pursuing damages is a civic act. You are not merely recovering what is yours—you are helping to change the system.
What We Do
We analyze tax cases for potential state liability for damages. We identify moments when the authority’s actions may have been unlawful—and help document them.
We prepare lawsuits for damages and litigate before civil courts. From analysis, through demand for payment, through trial—to enforcement of judgment.
We also help those just beginning a tax dispute to build documentation in case damages must one day be pursued.
In Closing
A state that bears no accountability for its errors is not a state governed by law. It is a state governed by force.
Provisions on liability for damages exist to counterbalance that force. So that an official, issuing a decision, knows that someone may hold them accountable. So that a system, withholding your money, knows it may have to pay for doing so.
These provisions work—but only when someone uses them.
Most entrepreneurs who have been harmed do not pursue damages. Because they don’t know they can. Because they think it’s too difficult. Because they are exhausted after years of fighting.
We know it can be done. We know how. And we help those who want the state to answer for its errors.
Because sometimes justice requires one more battle.
