The Tax Appeal Commission was set up in 2016 and has to date published 26 determinations. Two determinations made in December 2016 dealt with the procedural requirements for a taxpayer claiming a repayment of income tax. These determinations clearly demonstrate that any claim for repayment of tax must be made by way of a “valid claim” and submitted to Revenue within four years of the end of the tax year to which the claim relates.
The first case (Ref21TACD2016)
The first case (ref 21TACD2016) related to an individual making a claim for the incapacitated child tax credit. The individual successfully claimed the credit in October 2015 in respect of the tax years 2011, 2012, 2013 and 2014 and subsequently submitted a repayment claim for the tax credit in respect of the years 2008, 2009 and 2010. Revenue refused this second claim on the basis that the claim was not made within four years after the end of the tax year to which the claim related.
The individual argued that he/ she was unaware of his / her entitlement at the relevant time and for this reason the repayment claim should not be refused for the earlier years. Section 865(4) TCA 1997 states that a claim for repayment of tax “shall not be allowed unless it is made…. within 4 years… after the end of the chargeable period to which the claim relates”. The Commission took the view that the word “shall” in the legisation indicates an absence of discretion in the application of the provision. On this basis the Commissioner upheld the Revenue’s decision to disallow the repayment of tax for the earlier years.
The second case (Ref26TACD2016)
The second case (ref 26TACD2016) related to a repayment claim for income tax deducted from a lump sum payment received under an AMRF in 2010. During 2010 the taxpayer wrote a letter to Revenue requesting a repayment of the tax deducted. Revenue replied to the taxpayer stating that any such repayment claim must be included in his / her income tax return filed after the end of the tax year. The individual duly filed his/ her 2010 income tax return in November 2011 but omitted to include details regarding the repayment claim. A notice of assessment was issued by Revenue in line with the 2010 tax return and the notice of assessment was not appealed.
The Commission held that the 2010 return did not comprise a “valid claim” for the purposes of section 865 TCA 1997 in respect of the tax deducted from the AMRF. Also the letter sent to Revenue during 2010 did not comply with the requirements of section 865 as it did not contain all information which Revenue may reasonably require to determine what amount of tax repayment is due. This is on the basis that Revenue cannot determine how much of a tax repayment is due to an individual until after the end of the relevant tax year. As such, the Commission upheld Revenue’s position to refuse the repayment claim and stated that it does not have the jurisdiction to direct that a repayment be made to the taxpayer where a “valid claim” in respect of the repayment has not been made within the four year time period.
The full text of these Tax Appeal Commission determinations can be accessed through the following links: