Tax appeal system 'not fit for purpose' - head of Revenue

Revenue chairman Niall Cody.

By Pádraig Hoare

The tax appeal system is not fit for purpose, the head of Revenue has said — after Tax Appeals Commission (TAC)officials pleaded for more resources as a “relentless” workload piled up.

Revenue chairman Niall Cody told members of the Dáil Public Accounts Committee that the TAC inherited a system littered with inefficiencies, including the transfer of thousands of cases from its predecessor before the appeals commission was formed in 2016.

The body did not create the problems facing it currently, Mr Cody said.Earlier, TAC commissioner Mark O’Mahony said its current staff of 14.5 was not able to keep up with the volume of cases.

Some 1,750 new cases were submitted to the Tax Appeals Commission in 2017, compared to 900 the previous year — while many taxpayers appealing are waiting years for an outcome to their case.

There are around 5,000 cases in the system at present, with around 700 resolved. Up to €1.6bn in tax is potentially in dispute.

Fine Gael TD Peter Burke said it was unfair that an appellant who may lose an appeal would have to pay penalties accrued over years, simply because it took so long for their cases to be heard, to which Mr O’Mahony said he did not disagree.

Mr O’Mahony said the appeals body needed 10 new high-level staff “at a minimum”, as well as an additional three case workers.

Despite the staff shortage, the body handed back almost €600,000 unspent in its budget in 2016, and €528,000 in 2017. Its annual budget is €1.6m.

Brenda McVeigh of the commission said hiring was so restricted by bureaucratical requirements that it could not find enough suitable staff in a quick enough timeframe, leading to funds being unspent.

The IT system that the TAC works off is not fit for purpose, while it currently has no working phones to call inward, Mr O’Mahony said.

PAC chairman Sean Fleming said he was shocked at the problems facing the TAC.

“It’s a joke. There is a tsunami of appeals coming, it is outrageous. Whoever set this office had no concept of the scale of the task. There will be well over 2,000 cases next year, it is growing exponentially. Yet this was all foreseeable,” he said.

Deirdre Donaghy of the Department of Finance said Finance Minister Paschal Donohoe was “fully conscious” of the need for an efficient tax appeals system. He had been briefed about the need for new staff, but the resources needed to be utilised in the right way, she said.

A department review is due to be completed by August.

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