Paying back Revenue €4,000 that we shouldn't have?!

Pearlstone

OP, would you and/or your husband not ask your in-laws to set up a meeting with their accountant where you could discuss and sort out the matter hopefully to everyone’s satisfaction?

Halloween Jack

Kristopherus wrote: »

Revenue can go back many years to recoup unpaid tax, afaik. Us poor old sods can claim back a refund for only 4 years. Go figure !!!!!

OP,I hope you get your issue sorted. But get started with Revenue before the end of this year.

Actually Revenue can only go back more than 4 years in cases of fraud or serious neglect.

Halloween Jack

CIARAN_BOYLE wrote: »

The issue on the parents point of view is that they probably reduced their tax bill by claiming the son's income as a taxable expense.

It might be easiest to resolve informally within the family as amending a tax return from 4 years ago makes you more likely to be subject to a Revenue audit which could cause stress and bring up other tax dodges used by the accountant.

Or indeed the parents/accountant sheltered 10k of their income from the marginal rate of tax by claiming it was due to their son.

troyzer

Halloween Jack wrote: »

Or indeed the parents/accountant sheltered 10k of their income from the marginal rate of tax by claiming it was due to their son.

Ah, I just realised the full implications now.

Yeah, I would definitely just sort this out in house. Go to Judge Judy.

SEPT 23 1989

the phrase opening a can of worms springs to mind after reading the OP

august12

Seve OB wrote:

it is also not for you to rule out options available to the OP nor is it for you to speculate on the repercussions of them availing of said options.

I'm not ruling out options, I am giving opinions as requested by the OP.

SOPHIE THE DOG

So why don't the parents just pay their son the €10,000 now and conclude the matter? The son has suffered the pain of paying the tax on the money he didn't get.

Kenny B

Because he never earned it, it was a way to reduce the tax bill, by dispersing the wages of the main earner to the kids (who had tax free allowances going unused).

If his family were aware it would have had implications they would not have done it and probably know very little about it, it is an accountant earning his money for his client.

Any reasonable family will fix the issue as best they can as fast as they can.

Heisenburg81

Just use the Gift Tax annual exemption to reimburse.
Parents can gift 3,000 each per annum tax free to your spouse.
No tax implications.

ThumbTaxed

jonnybravo wrote: »

Might be that the farm accountant allocated the €10k in wages to your husband rather than his parents to reduce the income tax paid by his parents. It might be that by challenging the €10k payment might trigger a bigger liability for your in-laws. Assume your in laws should have some knowledge from the audit but would agree that probably should contact the farm accountant and see what they say.

Farmers.

calgary bound

Hi All, OP here, so parents and family farm accountant are both in denial about the whole thing but have said that no money was paid to my husband in 2013 - however they don't want to repay us the money either - burying your head in the sand kinda thing.

Any advise regarding next port of call, would we just be able to ring up revenue and say it was a incorrect declaration of income? Have printed P21s etc stating the earnings and tax credit certificates detailing how the underpayment was going to be recouped.

Would appreciate any help, cheers.

august12

calgary bound wrote:

Hi All, OP here, so parents and family farm accountant are both in denial about the whole thing and stated that no time was paid to my husband in 2013 - however they don't want to repay us the money either - burying your head in the sand kinda thing.

Are they in denial or claiming it wasn't on the tax return, I'm not sure if you can claim if greater than 4 year time lapse but no harm in contacting revenue for clarification. Let the in-laws know you are doing this.

seamus

So the accountant will have records of the accounts from 2013.

Have the accountant pull up those records, in front of everyone, and review the payments to your husband. Verify that €10k was declared paid to your husband by the farm.

Point out:

1. The fact that this has cost you €4,000
2. If you go to Revenue and dispute it, it will, absolutely definitely, bring Revenue back sniffing into the farm accounts again.

His parents' only two real options here are to ask their son to swallow the €4k loss because they fiddled the accounts, or to pay it back to him.

calgary bound

august12 wrote: »

Are they in denial or claiming it wasn't on the tax return, I'm not sure if you can claim if greater than 4 year time lapse but no harm in contacting revenue for clarification. Let the in-laws know you are doing this.

They have said they paid no money to him but claim revenue must have made some mistake.

We would be within the 4 year period - money was recouped 2015, 2016, 2017 and 2018 - due to end in December 2018.

seamus

calgary bound wrote: »

They have said they paid no money to him but claim revenue must have made some mistake.

We would be within the 4 year period - money was recouped 2015, 2016, 2017 and 2018 - due to end in December 2018.

If they believe Revenue have made an error, then they will have no problem with you going back to Revenue on the matter.

Make sure the accountant knows you're doing this, give him a chance to come clean if he has screwed this up.

Misguided1

Any chance the accountant has cooked the books at your husbands expense?

CramCycle

Revenue rarely make mistakes that cost them money. Most likely thing is the accountant mixed up 2012 and 2013. It will cost your in laws money but if they tell you to bang on with it, then there is nowt more you can do. I would tell them again and just make sure they are OK with you doing that, although they are foolish to do so without checking their accounts more thoroughly.

As for you, ask for P21s, when you see the error, notify them, job done, refund in a couple of weeks.

CIARAN_BOYLE

Calgary bound

I'm not sure if someone has mentioned this but under the 4 year rule you have til the end of this year to sort out 2013 issues.

if it's not sorted you can't get a refund.

calgary bound

CIARAN_BOYLE wrote: »

Calgary bound

I'm not sure if someone has mentioned this but under the 4 year rule you have til the end of this year to sort out 2013 issues.

if it's not sorted you can't get a refund.

Thanks for that, yes we are aware of the 4 year rule. We are going to give the accountant until the end of the week to review his files before contacting Revenue. Husbands Parents are fully aware of this. We are hoping this will be within enough time.

Seve OB

I would go full steam ahead with notifying the revenue that there was no payment received. And tell them that company records show no payment having been made to him either.

Stratvs

CIARAN_BOYLE wrote: »

Calgary bound

I'm not sure if someone has mentioned this but under the 4 year rule you have til the end of this year to sort out 2013 issues.

if it's not sorted you can't get a refund.

Revenue suggest that 2013 deadline has passed. The 4 years are currently 2014-2017 and 2014 falls out of reckoning after 31/12/2018.

CramCycle

Stratvs wrote: »

Revenue suggest that 2013 deadline has passed. The 4 years are currently 2014-2017 and 2014 falls out of reckoning after 31/12/2018.

But if the repayments were made from 2014 to 202017 as the OP said, then that has not passed

calgary bound

The year relates to 2013 (this is the year the 2nd income relates to) it was pulled up as an underpayment by revenue in 2014 and paid back in 2015-8. Can someone confirm if we would be eligible to claim through revenue based on this? Cheers.

Calahonda52

Misguided1 wrote: »

Any chance the accountant has cooked the books at your husbands expense?

or lined his ow pocket

thewolfisloose

Calahonda52 wrote: »

or lined his ow pocket

It was pointed out earlier that the accountant may have wrote off 10k from the family's income so that their son could qualify for grants for third-level education. Assuming that's true, I would say he/she was more earning their worth than lining their pockets, no?

It's probably not worth much to you OP, but thanks for airing this issue. I'm learning a lot from this little case study.

calgary bound

In laws definitely didn't qualify for third level grants. Wealthy farmers were talking about here.

thewolfisloose

The plot thickens..

jhenno78

Sounds to me like the accountant had been allocating 10,000 as wages to the son every year pre-2013 and didn't know/forgot that he'd finished college and would have his own income when doing to 2013 accounts.

tina1040

Would you really report your parents for this? It's not entirely legal but quite common in a family business to have a spouse or children over 14 on the books as employees. They have tax credits that would otherwise go unused for the year.

It's also not the accountant's fault so he also shouldn't get into trouble for this. It's the business owner who is reponsible for this. The accountant is not cooking the books without the knowledge of the business owner. Why would he bother?

Seve OB

jhenno78 wrote: »

Sounds to me like the accountant had been allocating 10,000 as wages to the son every year pre-2013 and didn't know/forgot that he'd finished college and would have his own income when doing to 2013 accounts.

that's what it sounds like alright

tina1040 wrote: »

It's not entirely legal but quite common in a family business to have a spouse or children over 14 on the books as employees. They have tax credits that would otherwise go unused for the year.

FYP

tina1040 wrote: »

It's also not the accountant's fault so he also shouldn't get into trouble for this.

it is totally the accountants fault if they are the ones who facilitated it.

tina1040 wrote: »

The accountant is not cooking the books without the knowledge of the business owner. Why would he bother?

so what you are saying is that once the business owner know that the accountant is cooking the books for them in an illegal fashion.... well the business owner knows... so that's ok!

hmmmmmm

tina1040

Seve OB wrote: »

that's what it sounds like alright


FYP


it is totally the accountants fault if they are the ones who facilitated it.






so what you are saying is that once the business owner know that the accountant is cooking the books for them in an illegal fashion.... well the business owner knows... so that's ok!

hmmmmmm

Of course it's tax evasion. I didnt say it's ok but i cant imagine reporting my parents because they did this.

Regardless of how annoyed I was about the 4K I would just forget about it if the parents won’t pay it back to you.

There is no way on earth I’d get revenue involved and draw them on my parents, it would be a terrible thing for a son/daughter to do.