Closing a Gap in Appeal Commissioners’ Powers
Section 56 of the Finance Bill 2020 proposes new powers for the Appeal Commissioners to ensure compliance with certain case management directions issued by them. At the moment, the Appeal Commissioners have broad powers to issue directions to any party to a tax appeal. The Appeal Commissioners also have specific powers to direct a party to file a “statement of case” and file legal submissions under sections 949(Q) and 949(S) of the Taxes Consolidation Act 1997 (TCA 97).
However, there is a gap in the Appeal Commissioners’ powers. Under section 949AV TCA 97, the Appeal Commissioners can dismiss an appeal where one of the parties has failed to comply with a direction issued pursuant to section 949E of the TCA 97. But these dismissal powers do not extend to directions issued pursuant to sections 949(Q) and 949(S) of the TCA 97. This means the Appeal Commissioners do not have authority to dismiss an appeal in circumstances where a party failed to comply with a direction to file a statement of case or to file legal submissions.
The Finance Bill 2020 proposes to amend section 949(AV) TCA 97 so that an Appeal Commissioner will have the power to dismiss an appeal where a party has failed to comply with a direction to either file a statement of case or file legal submissions. This is a welcome amendment as it broadens the case management powers of the Tax Appeals Commission (TAC) to efficiently manage the tax appeals list.
Interest on Repayments from Revenue
Section 67 of the Finance Bill 2020 will insert a new section, section 960GA, into the TCA 97, which will deal with collection of taxes under a number of the taxes acts. This section will provide that where a taxpayer makes a tax payment to Revenue in connection with an appeal of an assessment and subsequently wins that appeal, the appellant taxpayer will not be entitled to interest on the amount repaid by Revenue.
In contrast, where a repayment of tax arises because of a mistaken assumption by Revenue, section 865A TCA 97 provides that interest in the amount of 0.011% per day will be payable to the taxpayer. In such circumstances, the difference in treatment between an appellant and a taxpayer seems inherently unfair.
Appeal Commissioner Vacates Office prior to Determination
The Finance Bill 2020 inserts a new section into the TCA 97 to deal with situations where an Appeal Commissioner has vacated the office of Appeal Commission before delivering a determination of an appeal. The new section 949(AW) TCA 97 will provide that in such circumstances, the TAC will direct the appeal either to be reheard, or if appropriate, be adjudicated on without the necessity of an oral hearing. Where the TAC directs an appeal to be adjudicated on without an oral hearing, any party to the proceedings may request an oral hearing by notifying the TAC in writing within 21 days after the date of the notification to adjudicate without an oral hearing.
At the moment, there is no legislation in this area, the proposed addition to the tax code provides some welcome clarity where an Appeals Commissioner leaves office before delivering a determination. Unfortunately, the proposed change to the legislation makes no provision for legal costs arising where an appeal has to be reheard or is adjudicated on with an oral hearing. It is unsatisfactory that a taxpayer may have to pay legal costs twice to prosecute their appeal in such circumstances.
Appeal Commissioner Vacates Office before Completing and Signing of Case Stated
A determination by an Appeal Commissioner on an appealable matter is final and conclusive except where a case is stated to the High Court on a point of law. The Appeal Commissioner is responsible for drafting the case stated and this task may not be delegated to any other party. The Finance Bill 2020 inserts a new section into the TCA 97 to deal with situations where an Appeal Commissioner has vacated their office but has failed to draft the documents required to state a case to the High Court. The new section proposes that the TAC may direct:
- the appeal to be reheard; or
- the appeal to be adjudicated on without an oral hearing; or
- the outstanding steps in the stating and signing of a case to the High Court be taken by another Appeal Commissioner.
This proposed amendment will be a welcome addition to the tax code. While unlikely to arise frequently in practice, it will provide a pragmatic solution to progress a case stated to the High Court in circumstances where the Appeal Commissioner is not available to complete and sign the necessary documents. Furthermore, to mitigate any perceived prejudice to the taxpayer, the taxpayer can request a rehearing of the appeal before the TAC and contest any unfavorable findings of fact that would otherwise have had to be accepted as part of the case stated process
These new proposals will be effective from the date that the Finance Bill 2020 is signed into law by the President (expected to be a date in late December 2020).
At the moment, there is a lengthy back log of appeal cases waiting to be heard. The proposed new powers for the Appeal Commissioners should improve the efficiency of the TAC’s case management process and reduce the length of time that appeals will spend in the tax appeals list. Concerning the other proposed changes, it is good that the legislature has proposed a solution for what will happen when an Appeal Commissioner vacates their office. However, we think that the introduction of legislation to provide for a contribution to the taxpayers’ re-hearing appeal costs would be a good idea in circumstances where the taxpayer has had to prosecute two appeals before the TAC.