Call to allow tax penalty appeals

TAXPAYERS should be given the right to appeal the size of penalties imposed by the Revenue, the Law Reform Commission believes.

The commission also suggests that the Appeal Commissioners’ role might be extended to cover cases involving particular hardship.

In a detailed Consultation Paper released yesterday, the commission also called for an overhaul in the operation of the Appeal Commissioners, through the introduction of a system of written determinations and greater transparency in the appointment of these officials.

All future vacancies for these key posts, currently in the ‘gift’ of the Minister for Finance, should be filled under a “more transparent appointment process”, involving both the Government and an impartial expert group, along the lines of the Top Level Appointments Committee.

The LRC also suggests that aggrieved taxpayers be offered a fresh right of appeal on the matter of penalties from the Appeal Commissioners to the Circuit Court. Currently, an appeal to the courts can only be lodged on a point of law. But people making appeals to the Circuit Court enjoy a higher rate of success than when appearing before the Appeal Commissioners.

Interestingly, the Commission recommends that the Revenue should also be given a right of appeal to the Circuit Court.

This should be welcome news for the Revenue. At present, the Revenue’s right of appeal to the Circuit Court is limited to Capital Acquisition Tax matters.

According to the commission, the exercise of this right of appeal proved invaluable in securing a £1m settlement from former Taoiseach Charles Haughey.

In that case, Mr Haughey had succeeded in persuading the Appeal Commissioner to reduce his tax assessment to nil.

However, because the Revenue was able to initiate a Circuit Court appeal, the Haughey team were persuaded to enter into a settlement.

The commission is inviting further submissions on the issue for its final report.