Revenue pursuing three corporate tax bills in excess of €100m

Three large corporation tax bills, worth more than €100 million each, have yet to be collected by Revenue because of a backlog of appeals at the Tax Appeals Commission (TAC), the chairman of the Public Accounts Committee (PAC) has indicated.

Seán Fleming said the State was missing out on significant additional resources because of the amount of tax that remained under appeal and that efforts, including measurable targets, needed to be set for finalising outstanding tax disputes.

He said the TAC, which was set up in 2016, was trying to adjudicate on nearly 5,000 cases with limited resources, echoing sentiments of Revenue chairman Niall Cody, who last year said the tax appeals system was "not fit for purpose".

In its latest report published last week, the PAC indicated that the amount of tax under appeal stood at €1.8 billion as of July of this year.

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This included 78 cases of more than €1 million each, where the total money involved was €877 million. The three largest cases – worth more than €100 million each and totalling €366 million – centred on disputes over corporation tax liabilities.

Resources

"Prior to the establishment of the Tax Appeals Commission in March 2016 there was a failure by the Department of Finance to fully establish the nature and level of resources it would require to carry out its statutory functions," the PAC's report said.

“The absence of alignment between workload and required resources, both human and physical, has seriously compromised the Tax Appeal Commission’s capacity to operate as an independent statutory body, tasked with providing a modern and efficient appeals process in relation to the hearing and adjudication of tax case disputes,” it said.

However, the committee welcomed a recent review of the TAC’s workload and operations conducted by the department and recommends close co-operation be maintained.

“The timely receipt by the exchequer of amounts due is dependent on how efficiently TAC processes and finalises appeal cases,” it said. “The committee recommends that measurable targets be set for the progressing and finalising of tax appeals on an annual basis,” it added.

The TAC is tasked with providing a more efficient appeals process in relation to tax case disputes. It replaced the former Office of the Appeal Commissioners.

In June, the committee was told the TAC had just 15 staff working on about 5,000 outstanding tax disputes; that the phone system was not working; and it was restricted from hiring additional staff because of bureaucratic red tape, despite needing at least 10 to clear the backlog.

When contacted about the matter, a Revenue spokesman said tax appeals were a matter for the TAC, which is an independent statutory body, while noting that any tax liability that is the subject of appeal to the TAC is not available to Revenue for collection.