Wednesday 31 May 2017
Minister Noonan welcomes the publication of the first Annual Report of the Tax Appeals Commission and an increase in the resources of the Commission
- The Minister for Finance Mr Michael Noonan T.D. today welcomed the publication of the first annual report of the Tax Appeals Commission, available on the Commission’s website at http://www.taxappeals.ie/en/annual-report.
- The Minister also announced the appointment to the Commission of Mr Conor Kennedy as a Temporary Appeal Commissioner (biographical details for Mr. Kennedy are attached).
- The Tax Appeals Commission was established in March 2016 and replaced the Office of the Appeal Commissioners. The Commission was created as part of the reform of the tax appeals system undertaken by the Minister including the streamlining of various provisions in the tax code relating to the making of an appeal against taxes and duties, and the standardising of timeframes for lodging an appeal.
Commenting on the publication of the annual report the Minister for Finance Michael Noonan T.D. said:
“I am pleased that the Commission has been able to achieve a number of important objectives in its first year of operation including the resolution of over 440 appeal cases and the introduction of a website through which taxpayers can lodge appeals directly with the Commission. I look forward to the Commission building on its achievements so that we can ensure that taxpayers have a modern, effective and efficient tax appeals system.”
“My Department will continue to assist the Commission in the achievement of that outcome. In that regard I am pleased to have been able to appoint an additional Appeal Commissioner to the Tax Appeals Commission for a period of at least two years. Mr Conor Kennedy will assist the Commission in dealing with legacy cases. In addition my Department has seconded a senior official to the Tax Appeals Commission to act as its Head of Administration”.
Since its establishment in March 2016, the Commission has published 26 determinations relating to 29 appeals. The Appeal Commissioners found in favour of the taxpayer and allowed the appeal in 8 of those determinations, and found partly in favour of the taxpayer in a further determination. Half of the determinations relate to income tax appeals and the remainder deal with Vehicle Registration Tax, VAT, Corporation Tax, Capital Acquisitions Tax and Capital Gains Tax.
The determinations offer guidance to taxpayers, their advisors and the Revenue Commissioners on a number of issues such as the jurisdiction of the Commission, claims for interest relief, artists exemption, time limits for claiming repayment of tax, the tax treatment of tax liabilities written off following an examinership and the applicability of income tax appeal provisions to certain Capital Acquisitions Tax appeals. The publication of determinations by the Commission will accelerate as the administrative work necessary to establish the Commission is completed.
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Wednesday 31 May 2017
Notes for Editors
Key changes in the tax appeals system under the Finance (Tax Appeals) Act 2015 include -
- The processing of tax appeals is now entirely independent of the Revenue Commissioners, as all appeals are made by taxpayers directly to the Tax Appeals Commission. A notice of appeal can now be submitted online through the Commission’s website at www.taxappeals.ie.
- Prior to the establishment of the Tax Appeals Commission, all tax appeals were in camera proceedings and so members of the public were excluded from the hearings. In pursuance of the objective of increased transparency of the appeals process, taxpayers now have the right to have their appeals heard in public if they so wish.
- When determining an appeal, the Appeal Commissioners may now have regard to previous determinations in appeals that raised common or related issues and may in appropriate cases determine the new appeal without holding a hearing.
- The Appeal Commissioners may now determine an appeal without holding a hearing which means that in suitable cases a taxpayer can have his/her case determined without incurring the cost of professional representation at a hearing. Nine cases were determined in this manner in 2016. This option did not exist prior to the establishment of the Commission.
- The Appeal Commissioners now have significantly greater statutory powers to enable them to proactively case manage the hearing and determination of appeals. The new statutory powers include the right to issue directions, the right to schedule case management conferences, the right to stay proceedings and the right to dismiss an appeal.
- The Appeal Commissioners are now required to issue a concise reasoned determination in all cases within a short period of their determination, including a summary of the facts and giving reasons for the decisions.
In addition to the reforms outlined above another aspect of the improvements is that under the previous regime (the Office of the Appeal Commissioners), taxpayers could be at a disadvantage to the Revenue Commissioners because they did not have equal information in relation to appeals previously heard and determined by the Appeal Commissioners. The Revenue Commissioners, who are necessarily a party to every appeal, were aware if the Appeal Commissioners had previously determined a similar appeal or considered a similar legal issue; in contrast, taxpayers and their advisors would only have that information if they had themselves been involved with that previous appeal.
The publication of determinations in anonymised form on the Tax Appeal Commission's website will over time help to eliminate this disadvantage for taxpayers as more determinations are published and freely accessible and available for review. This will enhance the overall transparency of the tax appeals system.
The Commission's case load during 2016
The Commission's Annual Report indicates that a total of 899 new appeals were received by the Commission during 2016. 209 new appeals were disposed of by the Commission during 2016 and 690 remained on hand as of the end of the year. The Commission also disposed of 239 pre-2016 appeals during the year. The Appeal Commissioners have indicated that a significant number of the 690 new appeals which remained on hand at the end of 2016 will be concluded as part of the administrative process without the necessity for a hearing or determination.
The Commission's Annual Report contains (at page 13) an analysis of new appeals received during the course of 2016. A total of 899 new appeals were received by the Commission during 2016. 209 new appeals were disposed of by the Commission during 2016 and 690 remained on hand as of the end of the year. The Commission also disposed of 239 pre-2016 appeals during the year.
In considering these figures, it is important to note that all taxpayer appeals are now made directly to the Tax Appeals Commission, whereas those appeals had previously been made to the Revenue Commissioners in the first instance.
Formerly, the Revenue Commissioners would exchange correspondence with an appellant with a view to clarifying, and possibly resolving, the appeal. An appeal was only sent to the Office of the Appeal Commissioners, as it then was, if the appeal remained contested and the parties sought to proceed to hearing. The exchange of correspondence between the Revenue Commissioners and appellants substantially filtered the number of appeals which ultimately reached the Office of the Appeal Commissioners.
Under the reformed tax appeals system all appeals are now made directly to the Tax Appeals Commission, which means that this filtering process is now carried out by the Commission as part of its management of appeals. Appeals rest with the Commission, and are reflected in its statistics, while this process is ongoing. In effect, the TAC acts as administrator of the files, directing the exchange of correspondence and submissions between the parties in relation to the issues under appeal, with a view to the resolution and disposal of same. As a result, a significant number of the 690 new appeals which remained on hand at the end of 2016 will be concluded as part of the administrative process without the necessity for a hearing or determination.
Legacy appeal cases
The Tax Appeals Commission report also makes reference to a large number of legacy appeals that were transferred by the Revenue Commissioners to the Tax Appeals Commission in the latter half of 2016. These are open appeals which had been made to the Revenue Commissioners prior to establishment of the Tax Appeals Commission on 21st March 2016 but which had not been notified to the Appeal Commissioners.
The Tax Appeals Commission believes that a considerable number of these appeals will not require hearing and determination following the recent outcome of legal proceedings in the Superior Courts. The Commission further believes that the outcome of separate legal proceedings, which have yet to be concluded, will have a significant bearing upon a considerable number of other appeals.
Biographical information for Mr Conor Kennedy
· Mr Kennedy is a Barrister and has been employed in the tax field since 1994 as a self-employed tax consultant, a partner at KSi Faulkner, a practising Barrister-at-law, and most recently as the head of PWC’s Tax resolution group. During his career, Mr Kennedy has represented clients in their appeals against determinations of the Revenue Commissioners concerning taxes and duties.
· Mr Kennedy has been published in peer journals such as the Bar Review and the Irish Tax Review, and also wrote the foreword for “Ireland’s General Anti-Avoidance Rule and the Rule of Irish Law”, which was published by the Irish Tax Institute.
· Mr Kennedy is married with one daughter and is a keen cyclist