Committee disagrees with law of tax appeals heard in public

Controversial proposals by the Department of Finance to make tax appeal hearings open to the public for the first time have met strong resistance from an influential all-party Oireachtas committee.

The all-party Committee on Finance has come down against a proposal to have appeal hearings on tax rulings being held in public.

And in a criticism of a second key proposal, the committee has also said that the current right of a taxpayer to appeal an adverse finding at appeals commissioner level to the Circuit Court on the facts should be retained.

The draft Heads of Finance (Tax Appeals Commission) Bill 2015 had proposed that the only appeal from a decision should be to the High Court and only on a point of law.

The draft Bill was prepared by the Department of Finance and passed on to the Finance Committee for pre-legislative scrutiny as is the norm.

Confidentiality

There was general agreement the law was in need of reform but it was argued in submissions by several individuals and bodies, including the

Irish Tax Institute

, that some of the proposals went too far.

In particular, it was argued the ending of the “in camera” rule would have a detrimental effect on the tradition of taxpayer confidentiality, which is enshrined in law. The committee concluded it could have a chilling effect on taxpayers, especially small and medium businesses, from appealing.

The barrister and tax expert Suzanne Kelly said she was "seriously worried" about the proposal that an appeal "on the facts" to the Circuit Court would no longer be available.

“No lay person appreciates the importance of a fact-finding tribunal. The only route of appeal on the facts is to the Circuit Court. You can only appeal to the High Court on a point of law,” she said.

The Committee also agreed with objections to this change. In 2010 tax payers won six appeals to the Circuit Court and the Revenue was successful in 40. Without this avenue, some of the six cases would not have been won by the taxpayer, it pointed out.

It also said the costs of a High Court appeal, at least €100,000, would preclude lower income taxpayers from appealing.

The Department had contended the change to public hearings would "bring Ireland in to line with tax appeal processes in other jurisdictions" including the US, Canada and Australia.

“It can be argued that it brings clarity to the Revenue Commissioners’ decisions and makes the process more transparent for the general public,” it stated.

It also argued Circuit Court appeal might serve to undermine the Appeal Commissioner stage of the appeal process where a taxpayer does not fully engage and uses the initial hearing as a ‘dry run’ for the Circuit Court.

The Department of Finance has said it will examine the report and respond in due course.