Doctor loses €86,000 ruling at Tax Appeals Commission

A medical consultant has been left with a €86,071 income tax bill after tax authorities disallowed his company’s purported salary payments of €80,000 to his wife and sons over a two-year period.

The Tax Appeals Commissioner, Claire Millrine, found as fact that there was “no evidence of payments made” by the doctor’s company to his wife and sons in discharge of their duties over 2016 and 2017.

Ms Millrine also found there was “no credible evidence of any duties carried out by the appellant’s wife and children to justify the payments made”.

The doctor set up a private company in 2011 with the purpose of providing services as a medical consultant to a locum agency and he was in receipt of €230,000 pay annually for two years, 2016 and 2017.

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The company is 50:50 owned between the doctor and his wife where she also serves as a director.

The doctor claimed the company paid his wife and two sons – one a student at the time – an aggregate €80,000 over 2016 and 2017.

At a remote hearing into the doctor’s appeal into the Revenue December 2021 income tax bill at the Tax Appeals Commission in June of this year, all four members of the doctor’s family at the centre of the dispute gave sworn evidence.

The medical consultant testified that he had been working in the community for a number of years “and paying high taxes”.

In evidence, the man’s wife confirmed that her role was secretary in the company and she was paid once a month by cheque. She testified that during the relevant years, her duties were general secretary work such as time sheets, mailing, taking notes, arranging her husband’s schedule and contacting the locum agency.

Under cross examination, the woman could not pinpoint any emails wherein she corresponded with the locum agency on her husband’s behalf.

One son told the hearing he was paid his salary in cash at times, but he had no receipts of any payments.

Under cross examination by Revenue, it was put to the son that he was also working for a recruitment company in 2016 and he confirmed that this was the case.

A second son said he was responsible for driving his father to work and waiting for his father until he was finished work to drive him home.

Under cross examination by counsel for Revenue, the second son testified that he was writing a thesis when he was assisting his father and was doing odd deliveries for a company during 2017.

Revenue did allow pay of €5,198 to the medical consultant’s wife as remuneration associated with her duties as director of the company and Ms Millrine upheld this finding.