SEC hinders use of Revenue service

Securities and Exchange Commission (SEC) regulations governing auditors' independence are preventing accountants from using the Revenue Commissioners' online system to pay taxes for their clients.

The new SEC regulation, introduced last May, bans auditors from making payments on behalf of their clients. This creates a difficulty for Irish-based firms advising US-listed companies with a presence in the Republic.

Many of the accountancy firms that advise these businesses on tax issues also act as auditors.

Thus the regulation prevents them from making payments on behalf of their clients. This means that they cannot use the Revenue Commissioners' online payment method, as this requires the accountants to pay the tax on behalf of their clients.

The Institute of Taxation recently raised the issue with the Revenue Commissioners, and both parties are trying to come up with a solution to the problem.

An institute spokesman yesterday told The Irish Times that the organisation had written to the commissioners about the difficulties with its debit instruction method of online payment, which is known as RDI.

"The RDI can cause independence difficulties for certain firms that provide tax services to their audit clients, particularly those clients that are US Securities Exchange Commission registrants or affiliates of such companies or companies audited under US generally accepted auditing standards," the spokesman said.

"This correspondence is ongoing and we expect a revenue response very soon."

He added that a letter sent to the Revenue in June suggested some practical ways of solving the problem. The Revenue Commissioners confirmed that it was looking at ways of dealing with the difficulty.

"We are in correspondence with them at the moment," he said. A high proportion of taxes are collected via the online system. The Revenue Commissioners opened the service three years ago and are keen that as many taxpayers as possible use this route, as it is cheaper and more efficient than the other payment systems available.

Currently it can be used to pay income tax, corporation tax, vehicle registration tax and VAT.

The system is about to be opened up to capital acquisitions tax and capital gains tax.

The Revenue Commissioners' spokesman said it had recently upgraded the technology used to operate the online system, and said it had encountered a number of subsequent "teething problems" that had since been overcome.