Revenue has stopped imposing death penalty
ACCA (the Association of Chartered Certified Accountants) welcomes the announcement that Revenue will no longer impose tax penalties on deceased tax payers or publish the names of deceased taxpayers in default.
Aidan Clifford, Advisory Services Manager of ACCA Ireland said “The UK revenue authorities stopped charging interest and penalties on the estates of deceased taxpayers in 2007 based on the principal that a taxpayer is entitled to provide information and explanations and to defend themselves in a fair trial and this was denied a deceased person. Ireland has almost identical legislation and it was inevitable that Ireland would have to follow the UK example.”
The publication of the names of deceased taxpayers in default was particularly objectionable as this appeared to only punish the family of the deceased. As no penalty will now be imposed, Revenue will also not publish the name of the deceased taxpayer in default.
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For further details contact
Aidan Clifford 087 2470205
Jim O’Hara 043 41328
Copy of ACCA press release of September 2007
ACCA (the Association of Chartered Certified Accountants) is advising our members in practice to resist attempts by the Revenue to impose tax penalties on deceased tax payers in default and to commence action to reclaim any amounts paid in the past as the practice is contrary to the European Convention on Human Rights.
The UK Revenue have now accepted that imposing penalties on deceased tax payers is contrary to Article 6 of the European Convention on Human Rights. The UK Revenue is now processing refunds for penalties charged since 1989. Jim O’Hara, a partner in O’Hara Dolan, a leading ACCA tax practice said “Section 100A of the UK Taxes Management Act 1970 is essentially the same as section 1060 of the Taxes Consolidation Act 1997 in Ireland, and the Human Rights Convention was implemented into Irish law in 2003. If we have the same legislation, how can the Irish Revenue have a different interpretation.”
Aidan Clifford, Advisory Services Manager of ACCA Ireland said “The Revenue default lists for 2006 includes €5.6m of interest and penalties imposed on the estates of deceased tax payers. This amount does not include settlements where the tax payers name was not published. I am advising personal representatives of deceased tax payers to speak to their accountant about commencing proceeding to reclaim both the penalties and excess interest paid.”
In addition to penalties, Revenue also charge a penal level of interest on late payment of taxes of 10% a year. Normal commercial bank interest rates are 7- 8%. The excess amount can only be imposed by a court after a fair trial which is denied a deceased tax payer.
A person who has evaded tax will face four sanctions: payment of the unpaid tax; payment of interest on the tax; payment of a penalty; and finally publication on the tax default list. Revenue publish a schedule of interest and penalties imposed on tax payers in default based on the level of cooperation and unprompted disclosures. However, the view has been expressed in Ireland and confirmed recently by the UK tax authorities, that penalties can only be imposed by a court, after a fair trial. A deceased tax payer is not in a position to have a fair trial and therefore Revenue can only see repayment of the unpaid tax and normal interest from a deceased tax defaulter. For the same reason the Revenue may also not be allowed to publish the deceased tax evaders name on the quarterly tax default list.
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For further details contact
Aidan Clifford 087 2470205
Jim O’Hara 043 41328
Notes to editor
ACCA is the largest and fastest-growing international professional accountancy body and has 325,000 students and affiliates and 122,400 members in 170 countries. Over 18,500 students, affiliates and members live in Ireland.
ACCA experts are available for media comment on all aspects of Irish and international accounting, auditing, tax, small business, environmental reporting, corporate governance, business law and public sector finance.
Background briefing note to journalists
The European Convention on Human Right Act 2003 was signed into law on June 30, 2003. However, the Convention itself has been in existence since 1950. Ireland was one of the early signatories. An early case involving Ireland was Lawless v Ireland (1960) in which Mr Lawless challenged the validity of his internment without trial. Ireland took the UK to the European Court of Human Rights in the 1970’s again in the context of internment.
The purpose of the 2003 Act was to incorporate the Convention into Irish law so that convention rights can now be enforced in the Irish courts and citizens no longer have to take their cases to the ECHR. The 2003 Act does not change the fundamental principle that these penalties have been illegal since Ireland signed up to the Convention.
The key point is that under the European Convention on Human Rights, tax penalties are regarded as criminal in nature within the autonomous meaning of that expression in Article 6 of the Convention. A criminal sanction cannot be imposed on a deceased person. The leading case on this issue is Bendenoun - v - France (12547/86) established tax geared penalties are criminal offences. This case was heard by the ECHR in 1994 but related to events which occurred in the mid-1970’s. Subsequent to Bendenoun there have been a number of cases where disputes which included the question of liability to pay substantial tax geared penalties have been held to involve the determination of criminal charges of which the case of AP. MP and JP – v – Switzerland (1997), which was specifically concerned with a deceased taxpayer, is but one example.
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