Minutes Of The Meeting Of The Taxation Administration Liaison Committee –
“Main Talc” Held On 17th May, 2005
Attendance:
Law Society
Caroline Devlin, Chairperson
Patrick Bradley
Revenue
Liam Irwin
Gerry Harrahill
Eamonn O’Dea
Denis Graham
Michael Gladney
Sean Moriarty (LCD)
Eoin De Buitleir (LCD)
CCAB-I
Marie Barr
Enda Faughnan
Brian Purcell
Gerald Murphy
Brian Keegan
Irish Taxation Institute
Adrian Sherlock
Kenneth McMoreland
With
Apologies:
Item Number 1:
Colette Carey (Law Society) (Secretary)
Norman Gillanders (Revenue)
Margaret Sheridan (ITI)
Cora Murray (ITI)
Agree Minutes from March 2005 meeting.
The Minutes of the meeting held on 3rd March, 2005 were approved subject to a number
of amendments.
Item Number 2:
Revenue presentation on LCD Co-operative
Compliance Framework
As part of a wider consultation process, Revenue Large Cases Division gave an overview
of a Revenue initiative to facilitate Revenue and corporate entities working together as
part of a new voluntary compliance regime. Under the proposed co-operative compliance
framework, it is proposed that Revenue will deal directly with corporate taxpayers. This
will not undermine or replace the relationship between businesses and tax advisors and
Revenue will provide interpretation advice to tax advisors and businesses alike.
Participants may enter into a ‘Compliance Framework Agreement’ which will set out
what the respective parties undertake to do in order to achieve a high tax compliance
standard.
The agreement is not legally binding. Practitioners queried whether the
proposal might not be premature given that the Directors Compliance Statement is not
due to emerge until the end of July. Revenue said that the proposal stands alone and to
the extent that the Directors Compliance Statement is mentioned in the document, such
references will be removed. Practitioners voiced concern that the proposal might prompt
businesses to re-locate outside Ireland and that taxpayers might be refused participation in
the scheme. Further, if tax-planning strategies were disclosed to Revenue and these were
then closed off by legislation, this could act as a disincentive to companies. Revenue
stated that if there is an issue as to what is or is not acceptable tax planning, the Large
Cases Division would examine the matter in the wider Revenue context. Revenue hopes
to sign off on the project by the end of June 2005. The documentation may be furnished
to the professions for consultation purposes and practitioner bodies were asked to revert
to Revenue within three to four weeks with any feedback.
Item Number 3:
Revenue investigation into Single Premium Insurance
Policies
It was noted that while the launch of the investigation had been discussed at the TALC
Audit sub-Committee meeting on 5th April, no indication had been given that the launch
was so imminent. Practitioners had recently met with Revenue Chairman Frank Daly and
expressed their concerns about the lack of proper consultation. Practitioners were of the
view that it would be impossible to meet the voluntary disclosure date of 22nd July and
queried whether Revenue would hold off on other audits in the interim. This issue is to be
discussed at a meeting to be held on Thursday 19th May and the Revenue Chairman has
agreed to meet with the professional bodies after that date if necessary.
Revenue
recognised the high volume of work involved for practitioners. If there are individual
practitioners in difficulty, Revenue indicated that they would be sympathetic.
Practitioners could contact their district inspector to explain their particular difficulties
and seek an extension of time on a case-by-case basis if necessary. Practitioners viewed
the 14-day response time as insufficient. There is also uncertainty regarding the scope of
the investigation and in particular the €20,000 threshold. Information is hard to obtain as
the Revenue telephone service merely refers callers to the website. Revenue stated that it
will be a targeted investigation and will not be dealt with in isolation. The investigation
will only relate to investments totalling over €20,000. Revenue undertook to look at the
telephone service problem.
Also, practitioners noted that Revenue had issued letters to taxpayers in relation to the
motor industry investigation in the Southwest, and had allowed only 30 days to make full
disclosure.
Practitioners expressed the strong view that timelines must be consistent
with the Code of Practice. Revenue confirmed that taxpayers have 60 days for reply
under the Code and there is no intention of pulling back on this provision. Revenue
indicated that they would be happy to issue a letter in those terms.
Item No 4
Form 11 analysis report
Practitioners were surprised to note that the Form 11 analysis had been published in a
recent edition of Tax Briefing. Revenue commented that it had committed to check that
all figures were correct prior to publication and are satisfied that the results published are
accurate. Revenue also confirmed that a similar exercise would be undertaken this year
for the 2003 tax year.
The overall rate of amendments appears to be down.
Practitioners were concerned at media coverage that appeared to imply that accountants
were responsible for the errors occurring. Practitioners were of the view that the survey
should show the percentage of amendments attributable to Revenue mistakes. Revenue
stated that some of the staff are relatively inexperienced but overall fewer problems than
expected had actually occurred. The overall situation appears to be better for 2003,
perhaps because of ROS filing.
Item 5
Issues arising/carried over from March meeting
Stamp duty/floor area certificates: Practitioners were disappointed that no transition
period had been provided and were of the view that such amendments should allow a
reasonable lead-in time.
S.133 Finance Act 2005: This matter will continue to be monitored but it was agreed
that it should be taken off the Agenda.
Revenue Charter of Rights: Mr Liam Irwin confirmed that a letter clarifying
practitioners’ queries regarding the status of the Charter of Rights would issue within the
next few days. The letter will make it explicit that taxpayers’ rights are unconditional.
Practitioners would be free to publish the correspondence as they consider appropriate.
IFRS Group: The first meeting of the Group took place on 15th April, 2005. A number
of submissions had been received in relation to the 2005 legislation and a further meeting
is to be convened to discuss the issues arising. A separate meeting will consider issues
other than the 2005 legislation. A draft will be issued by Revenue. Although the group is
not a part of TALC, the matter is to remain on the Agenda.
Offshore Assets Submissions: Revenue confirmed that two Court Orders have been
obtained to date. Revenue also confirmed that there are a number of other applications in
waiting.
Item 6
Telephone Service:
Revenue Customer Services Issues
Practitioners reported difficulties with the Revenue telephone
service in the Tallaght and Fingal areas.
Correspondence Service: Delays in dealing with correspondence have been encountered
in Dublin, the Southeast and Galway. Revenue acknowledged that there are problems in
certain areas. Some of these difficulties are attributable to the PAYE situation. Revenue
is actively trying to resolve these difficulties and an improvement is expected within the
next few weeks. Revenue is of the view that overall the situation around the country is
better than it was this time last year.
Practitioners raised the matter of Relevant Contracts Tax cards issuing in batches. Delays
are now running at six weeks whereas cards previously issued almost immediately.
Delays have also been experienced in obtaining tax numbers for registration. Revenue
agreed to keep the matter under review. Revenue confirmed it is aware of the imposition
of thresholds on cards and stated that it is Revenue policy to do so on a ‘risk’ basis.
Item 7
ROS Issues
Update on CT ROS Payments – US SEC Issue: Revenue confirmed that the issues were
resolved and that accordingly, this has been live since the 6th May.
Electronic filing of IT38: Practitioners were of the view that if it were possible to file
the Inland Revenue Affidavit on-line, it would facilitate a better take up of ROS for CAT.
Revenue advised that this capability is not currently on the ROS development
programme. The Law Society will continue its consideration of the matter and will revert
to Revenue in due course. Practitioners also mentioned that there is no facility to allow a
taxpayer to pay through ROS. Revenue confirmed that there had been difficulties with
the system and it is hoped that this will become available in time.
ROS availability for non-resident clients and other ROS issues: Revenue confirmed
that this is on the ROS project schedule but is not at the top of the list.
Practitioners queried whether the form ‘Firms 1’ relating to Partnership Agreements
within Self Assessment could be uploaded via ROS and whether the filing date extension
could be availed of by partnerships. Revenue responded that the relevant form would not
be available in ROS until mid 2006, but confirmed that if individual partners paid and
filed separately through ROS they could avail of the extension date.
Item 8
Relevant Contracts Tax
Practitioners gave an example where directors - shareholders in a limited company which
is the principal contractor - are deemed to be “connected persons” when building for
themselves. They would therefore be required to obtain an RCT Card. Revenue stated
that this may be an unintended use of these particular legislative provisions but there may
also be other issues that need to be examined. It was agreed that the practitioners would
furnish details of the particular case to Revenue.
Item 9
Operational Issues
Technical resources: This matter was dealt with under item no.6
Accessing e-brief:
Practitioners advised that subscribers have no way of knowing
whether or not they are registered, until they receive the next issue of e-brief. It was
agreed that Revenue would investigate the matter.
Revenue Memorandum of Understanding with ODCE: Practitioners queried whether
taxpayers would be told that information has been passed to the ODCE.
Revenue
responded that in such instances taxpayers would not be so advised.
Revenue Guidance re Directors’ Compliance Statements: Revenue confirmed that it has
representatives on the IAASA and a consultation process is underway.
LCD information to agents:
Practitioners noted continued cases where LCD correspondence seemed to have issued to
tax payers and not to agents. Revenue agreed that this should not be the case and asked
practitioners to give examples of where this had occurred. Practitioners to revert to
Revenue.
Savings Directive – method of making returns: Revenue had confirmed that there will
be an option for paper filing as well as filing by electronic means. The actual form is not
yet available. It was agreed that the matter should be taken off the Agenda.
Item 10
Updates from TALC Sub-Committees
Capital Taxes Ad-hoc sub-Committee: Revenue confirmed that it has settled the names
of its nominees to the Group and would shortly forward the nominees to Caroline Devlin.
The Minutes of the February meeting of the (a) Audit sub-Committee and (b)
Simplification Group, were noted.
Item 11
Any Other Business.
Practitioners suggested that the Technical Taxes Sub-Group should be re-instated.
Practitioners will collate the various issues that need to be dealt with (e.g.. the RCT issue
appearing at item 8 of the Agenda) and will pass these to Ms Caroline Devlin.
Article re Overpayment of Tax: Practitioners noted that an article had been published
but it did not cover the issue of settlements with Revenue which practitioners had
specifically hoped it would deal with. Revenue confirmed that it was aware of the matter
and would revisit it. Practitioners suggested that Revenue might address the matter in ebrief rather than waiting for the next edition of Tax Briefing.
Section 950 TCA 1997: Practitioners said that S.14 Finance Act 2005 amends the
definition of “chargeable person” and may result in taxpayers not being aware as being
unable to determine whether, they are chargeable. Surcharges could therefore apply.
Revenue undertook to check the position in relation to this matter.