Woman who never worked faces tax bill of €400k after CAB probe

The 43-year-old appellant told the TAC that she had been in receipt of social welfare payments since she was 18 and had never been employed or operated a trade. Picture: Mark Stedman/RollingNews.ie

A woman who never worked at any job has lost an appeal against a tax bill for almost €400,000 following an investigation by the Criminal Assets Bureau (CAB).

The Tax Appeal Commission (TAC) ruled in favour of the CAB after it issued the female, who was not named, with a demand in 2020 for unpaid tax worth €389,632.

The CAB has assessed the woman for tax over “unexplained” income totalling almost €740,00 she had received in a number of bank accounts between 2006 and 2017 which was used to buy a property for €346,500 in 2016, and several cars.

It also issued a tax demand in relation to two undeclared properties she had been gifted by her brothers worth a combined €230,000.

The payments sought by the CAB related to unpaid income tax and capital acquisitions tax.

The TAC was informed that settlement negotiations between the parties in a bid to avoid the appeal were unsuccessful. The TAC heard the woman was claiming Jobseeker’s Allowance from the Department of Social Protection over the entire period.

The 43-year-old appellant told the TAC that she had been in receipt of social welfare payments since she was 18 and had never been employed or operated a trade.

She gave evidence that her only source of income was social welfare benefits and that the income assessed on her by the CAB was “erroneous.” The woman claimed she could not have contributed lodgements to the bank accounts she held jointly with her father and her brother as she did not have the means to do so.

She told the TAC that she had never acquired the cars purchased in her name and that they were put in her name by her brothers, although she was insured to drive them.

The woman claimed she was unaware she was registered as their legal owner and she understood the insurance was in her name because she would get cheaper premiums than her brothers.

She also stated she did not receive any money from the subsequent sale of any of the vehicles.

The woman said the various properties were placed in her name on trust for the rest of the family.

She claimed the property bought in her name for €346,500 was purchased by her brother with funds she assumed came from his work as a painter.

Family evidence 

The woman’s father gave evidence that he put her name on bank accounts in case he suffered any adverse health and that a lodgement of €104,000 related to his own funds and the repayment of loans from several of his children.

The TAC heard that the woman’s brother, who had his tax affairs investigated over his failure to submit tax returns, had failed to appear as a witness in her case.

The TAC heard the woman was named on bank accounts in her own name as well as some held jointly with her father and her brother.

The CAB sought to have her pay tax on the full amount of lodgements in her own account and 50% of the unexplained amounts paid into the accounts she shared with her relatives.

TAC commissioner, Andrew Feighery, said the burden of proof lay with the women who had to prove that on the balance of probabilities the tax assessment by the CAB was incorrect.

Mr Feighery said the onus was on her to establish that the income received by her was from a verifiable source.

He ruled that the sources of the vast majority of the lodgements paid into the account she held jointly with her brother were unexplained, and the CAB’s assessment relating to them stood.

Mr Feighery said she should also be assessed for tax in 2006 in relation to €11,080 which represented 50% of the opening balance in the account because its source was also unexplained.

He also confirmed the tax assessment in relation to six vehicles of which she was the registered owner because she had not identified the source of the funds used to buy them.

The TAC commissioner ruled that the woman should also be assessed for deposit interest retention (DIRT) tax on the accounts held jointly with her father and brother for which she had not been assessed by the CAB.

Mr Feighery said the lodgements into the woman’s own bank account involved predominantly small sums of money and he accepted her evidence about them and deemed they were not liable for tax.

He ordered that the tax assessments be adjusted to reflect his ruling and some incorrect calculations by the CAB in relation to sibling gifts, small gift allowances, children’s allowance and penalties.

Mr Feighery acknowledged that the woman would be disappointed with his ruling but said she was correct to seek legal clarity on her appeal.