Revenue fine - What is natural justice?

cnocbui

If revenue issue a fine for a late submission of a CGT return for say 2013, but the capital gain could not in any way be realised until more recently due to legal issues making that impossible, would that be an example of a natural justice issue? One arm of the government issuing a fine for a delay, while the law itself and the processes involved in complying with it were the cause of the delay.

Claw Hammer

Are you sur it is not CAT?

cnocbui

Absolutely. I have today received clarification from my accountant. It's like doing the speed limit, having a Garda patrol car come up behind you and pushing you up past the speed limit, then pulling you over and issuing a speeding fine for €4,600.

The accountant has been trying to sort an unusually complicated inheritence issue out and according to him, Revenue's delays and lack of clarity and inability to give clear direction and time wasting, have resulted in the delay that has now triggered a fine. The clock should stop when Revenue are first contacted.

Claw Hammer

If it is inheritance, it is likely there is CAT and CGT. In complicated cases the revenue can move the date of disposal so that it is not the date of death. If asset values rise in the meantime it will result in CAT going up and CGT going down. The taxes are self assessed so I don't know why you are blaming the Revenue. Why didn't you pay your tax and make an expression of doubt?

cnocbui

https://www.boards.ie/discussion/comment/119393564#Comment_119393564

Because my solicitor employed one of the largest accountancy firms in Ireland to handle the tax submissions, in fact they are global, with over 90,000 employees. Asking why 'I' didn't pay my tax on time is a rancid accusation.

I will repeat myself: The situation involves an inheritance, but because of the complexities involved, my accountant has been on the case since last year trying to get Revenue to provide guidance and them to accept the calculations asnd the basis for them. The tax wasn't paid because Revenue have taken many months before finally managing to work out themselves, how the tax should be calculated. Revenue have taken so long that the case is now in the hands of a second accountant at the firm, as the original one left the firm. Originally my solicitor and the original accountant, and I, all thought some CAT would apply, but the final determination has been that only CGT is applicable.

My accountant agrees with me that the fine should not have been levied because Revenue are the source of the incompetence and delay.

As I said, it's like a Garda patrol car coming up behind you and pushing you over the limit, then pulling you over and issuing a huge fine.

Flinty997

Did you appeal it.

cnocbui

https://www.boards.ie/discussion/comment/119393810#Comment_119393810

I believe my accountant is doing so now.

Claw Hammer

If it is CGT it is because of the date of the distribution being the date of death. CGT is a self assessed tax. If you don't know how much to pay, you pay what you think you should pay and make an expression of doubt. Your accountant and solicitor should know that. They seem to have made a mess of it and are trying to blame the Revenue.

cnocbui

https://www.boards.ie/discussion/comment/119393883#Comment_119393883

It's not remotely that simple. Person died in 1996, inheritance deemed to have been 2013, but the estate executor died in 2010, with that passing to a hostile person who lives in a foreign country. Just sorting out the probate and excecutor issue took over three years. The estate had no funds, and the contrived capital gain of the estate in 2013 was without the property even being sold until 2021/2, which couldn't have been sold earlier because the executor and probate issues weren't solved until 2021, and funds from the sale - necessary to pay the CGT - didn't eventuate until feb 2022.

As I said, it's not as straightforward as you seem to think. There have been two accountants on this case and neither of them thought paying a random amount of tax out of the air was an idea. The initial belief was that tax

If victim blaming is your only opinion, it's been noted, so any further replies reiterating that stance wouldn be redundant; I get what you think.

Claw Hammer

Just because the estate had no money doesn't mean the tax couldn't have been paid by the beneficiaries who were gaining. Why should the taxpayer have to subsidise a family dispute?

Tax Appeals Commission - you/your accountant can raise your claim to them.

Lenar3556

https://www.boards.ie/discussion/comment/119394124#Comment_119394124

Situations like you describe while complex are not altogether uncommon, and to be honest it is highly unlikely that the situation was so fundamentally novel that compliance with the CAT/CGT self-assessment rules was impossible within the statutory timeframes. If the advisors acting on your behalf were unsure on how to proceed, they should have themselves sought the assistance of a suitably qualified tax consultant, or come off record entirely. Simply batting the thing to Revenue and saying ‘it’s in your hands now’ just doesn’t cut it.

Having said that, even with fully competent advisors, situations can occasionally arise where there is a genuine doubt in how to assess the tax due, often because particular information is not yet available. But as was highlighted by others, that is not a legitimate excuse to simply not pay - there is a mechanism to express a doubt when filing the return. While Revenue will usually provide helpful assistance when approached on queries, they are not tax advisers and that is important to recognise.

The fact that the estate did not have liquid resources to meet a tax liability at the point it was due is not going to hold much water either.

cnocbui

https://www.boards.ie/discussion/comment/119396444#Comment_119396444

The accountancy firm is BDO. Which tax advisers would you suggest they approach for advice? BDO seem to consider themselves to be tax advisors; perhaps they should reconsider that view, given the expert opinion of some boardsies.

I am aware that the two accountants who have advised on this have themselves had numerous discussions with fellow colleagues, some of whom were likely quite senior in their firm. The situation is unique enough, that my original solicitor, who unfortunately died on the job, actually wrote a piece based on the situation because of the novel issues it raised, that was then posted on the company's website - again, a fairly major firm of solicitors with offices in several locations.

The constant portrayal of the professionals I have employed at considerable cost, as amateur hacks who should know better, is getting more than old and not at all helpful, so if anyone else wants to reply in a similar vein, they needen't bother.

Claw Hammer

Big firms can make big mess ups. In any case tax law is very simple. pay what yopu say you owe and enter an expression of doubt. According to what you are saying there was plenty of grounds for that. You tried on the excuse that there was no money in that and are now attacking the posters who pointed out this simple fact.

You thread also asks what is natural justice. natural justice has no bearing at all on what you have described.

cnocbui

Do I laugh or cry?

Revenue conceeded that the fine was inappropriate and withdrew it. My accountant almost does a high five and says he's just waiting on an ammended assessment and we are all done and dusted. Today, I got a little missive from Revenue in the mail asking me to pay around €23,000 for CGT this period. All tax due has been paid.

Unbelievable. Is there any way to get Revenue to pay for accountancy costs that they inflate with such nonsense?

cnocbui

Revenue stonewalled my accountant when they asked what this demand for €23,000 was based on, so I rang them and asked myself, and they said they couldn't tell me what the basis for their assement was. That seems to have spurred them into action and they have now admitted to my accountant that it was an error on their part.

That's good, but my accountant is probably going to just increase my bill by several hundred as a consequence of Revenue's little error. Accountancy charges for dealing with tax matters should be tax deductable, as they are in other countries.

As this is not a forum for legal advice I’m assuming you are trying to draw attention to a few issues arising from your case.

1. Tax deductible accountancy charges
2. Tax being charged even before receipt of the income which attracts the tax.

Have I missed anything?

cnocbui

https://www.boards.ie/discussion/comment/119519267#Comment_119519267

Yes, you missed reading my original post and the issue raised in it, which has now been resolved.

https://www.boards.ie/discussion/comment/119521165#Comment_119521165

No I didn’t miss that. You were saying that you faced delays receiving your inheritance and that you were fined for not paying the tax due on the inheritance on time. That’s the second point above.

Not to worry.

cnocbui

https://www.boards.ie/discussion/comment/119521209#Comment_119521209

The inheritance wasn't mine, it was by my children from their uncle. The original issue was that Revenue issued a fine for a late return when their lengthy delays in responding to queries raised by my accountent were in themselves the cause of the delay in the return being submitted. This, they have now accepted, was the case.

There were potentially other issues of not having the funds available in the year in which Revenue wanted it, but that's secondary. The complete unreasonableness of the legislation is a real issue, though. The contracts were signed in October but the funds were not paid until February the following year, but the legislation has your typical Irish BS of designating the date of sale as being that on which the contracts are signed, not the date when the contract is fulfilled, which is the date the official property price register seems to use and recognise. This is all the more ridiculous as the contract might not be honoured by payment and therefore be cancelled, which highlights that the date of signing is a ridiculous metric as the contract is only honoured and concluded by payment and the ownership of the property does not change hands until then.

It is ridiculous that Revenue can use a date of sale that in some cases can be months prior to the date all other branches of government take to be the actual date of sale. The signing of contracts does not designate a sale, it's just noting a potential of a sale, which might not eventuate.

Marcusm

https://www.boards.ie/discussion/comment/119521470#Comment_119521470

If that’s the point of dispute then your solicitor and the accountant are morons. If the contract is not conditional then the disposal date for CGT is always the contract date irrespective of whether the actual closing or completion date is later. If that was going to be a sticking point the.man they should not have allowed for such a long period between exchange and completion and/or inserted conditionality into the contract. None of this is the fault of Revenue and all of it is known to a competent professional.

You’ve certainly nailed a few inconsistencies there OP. If you feel you have the time I think you are entitled to send a few recommendations to the Law Reform Commission under current projects 1 and 4.

https://www.lawreform.ie/press-room.7.html

screamer

I don’t know about natural justice but with revenue you will always be wrong and they will be right. You can appeal of course, but I wouldn’t fancy your chances. They really are a law unto themselves.