New Tax Appeals Commission and Tax Appeal Rules
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Today, 21 March 2016 marks the commencement of the new tax appeal rules, and the formal establishment of the new body which will hear the appeals. From today, taxpayers should send their notices of appeal to this new body rather than to the Revenue Commissioners.
Tax Appeals Commission:
Appeals will now be made to the Tax Appeals Commission. This body will manage the appeals process and adjudicate on the appeals. The body will have Commissioners who will hear appeals, make findings of fact, and issue decisions.
The New Appeals System – Key Changes:
Restricted Appeal Options:
Under the previous appeals system, a taxpayer could appeal the Appeals Commissioner’s decision to the Circuit Court. The matter would be completely re-heard by the Circuit Court judge, meaning matters of fact (as well as law) could be appealed. Alternatively, either Revenue or the Taxpayer could appeal to the High Court on a point of law only (no re-hearing of facts). Under the new rules the appeal to the Circuit Court has been abolished. Transitional rules provide for taxpayers whose hearings had already commenced prior to the 21 March 2016 to retain the right of appeal to the Circuit Court. However, now, a taxpayer whose hearing commences after 21 March 2016, and who is dissatisfied with the Appeal Commissioner’s decision will only be able to appeal to the High Court on a point of law. This greatly restricts taxpayers’ options and increases the importance of establishing the facts at the first stage of the appeal process.
Publication of Decisions:
The new rules require the Commissioner to publish a report of his/her decision within 90 days of notifying the decision to the parties. The decision must be published on the internet. Where the hearing has been heard in private there is a requirement that the decision be published without any information which could identify the taxpayer. The publication of decisions is a welcome change which should bring greater transparency to the tax system and allow taxpayers to make more informed decisions about whether to take an appeal. It will also begin to address the imbalance which presently exists between Revenue and Taxpayers. Currently Revenue have knowledge of all the Appeal Commissioners decisions simply because they are on the other side of all tax appeals. This informational asymmetry will now begin to be redressed with the publication of decisions, and will begin to put taxpayers on the same footing as Revenue. The publication of decisions will not only assist taxpayers in determining whether or not to take an appeal but also improve decision making in day-to-day tax compliance and tax planning.
Public Hearings:
Under the old appeals system all hearings were held in private. It was initially proposed that all hearings under the new system would be held in public. However taxpayer representatives argued that this would dissuade taxpayers from taking appeals. The new rules now provide that hearings are to be held in public, but that the taxpayer may request for the hearing to be held in private. Where the taxpayer makes such a request then the appeal ‘shall’ be heard in private. The Tax Appeal Commission would not appear to have any discretion to refuse the request for privacy, if received in time. The taxpayer must make the request to the Tax Appeal Commission within 14 days of being notified of the time and place for the hearing of the appeal.
Conduct of Cases:
The new appeals rules provide the Tax Appeal Commission with a number of new measures which may greatly improve the effectiveness of the appeal process. The rules provide for decisions without an oral hearing (with the consent of both parties), the joining of other parties to an appeal, and for case management conferences. The effectiveness of these new measures will be seen with the passage of time. However the joining of multiple matters would be of immediate benefit in instances (for example) were a number of taxpayers have invested in a tax incentive scheme which Revenue has subsequently challenged.
Legislation:
A copy of the Finance (Tax Appeals) Act 2015 can be viewed here.
The Act was commenced from 21 March 2016 by S.I. 110 and 111 of 2016.
RDJ’s Tax Group
The changes to the appeal system, and in particular the removal of the appeal to the Circuit Court, underline the importance of retaining specialist legal representation when engaging in the appeal process and contentious matters with Revenue.
RDJ recently announced its merger with JM Burke Tax Solicitors, a firm specialising in tax law. Through the merger, our Tax Group has increased its ability to advise clients who are the subject of a Revenue investigation or engaged in other contentious tax matters. Further details of the merger can be found here.