Administration
Powers of Revenue
The Revenue has extensive powers in the CAT Act supplementing their general Tax Consolidation Act powers. They have powers to seek additional evidence, make enquiries and inspect documents.
They can require an accountable person to deliver and verify a statement of particulars relating to assets and such evidence as they believe require in relation to that is relevant to the assessment. The request must be specific.
Revenue may appoint an inspector to inspect any property comprised in the inheritance. They may inspect books, records and accounts as are relevant to the particular gift or inheritance. Persons with custody of the same must produce the same. It is an offence to obstruct or restrict access.
General Time Limit
Generally, enquiries must be made within four years of the date on which the relevant return is received. The time is extended if the person has acted negligently or fraudulently in relation to the matter.
Revenue has powers to make assessments and amended assessments within the same time limits as above. Once again, fraud or negligence extends the time limit. Negligence includes the failure to make a requisite return.
Capital Acquisitions Tax Consolidation Act 2003, provides for a standard 4-year time period during which the Revenue Commissioners can, respectively, make enquiries, raise assessments and make repayments.
The Finance Act 2018 amends the provision in relation to the standard 4 year time limit, following the receipt of a return, allowing for Revenue officers to make enquiries and authorise inspections. The amendment inserts a different commencement date for the 4 year period in circumstances where certain conditions attaching to a relief must be satisfied.
Where conditions for a relief must be satisfied for a specified period after the relief is claimed, the 4 year period commences on the latest date on which all the conditions were required to be satisfied.
Finance Act 2020 provides for a fixed commencement date for this 4-year time period of 31 December in the year in which a return is received. It also provides that the Revenue Commissioners may raise an assessment at any time where an event occurs after a return is received which gives rise to any facts or matters relevant to the assessment.
Surcharge
The Finance Act 2018 amends the provisions for a surcharge in the case of the late filing of returns. The definition of “specified return date” is expanded to include the return filing date for discretionary trust tax returns which is the last day of the 4 month period after the valuation date. This will ensure that a surcharge can be applied where discretionary trust tax returns are not filed on time.
Following the determination of an appeal by the Appeal Commissioners. Such tax is due and payable on the original due date for the appealed assessment unless the tax paid before the appeal was made is at least 90 Per cent of the tax determined to be due, in which case the outstanding tax is due and payable one month after the date of the determination.
The general anti-taxation avoidance provisions, in Section 811 of the Taxes Consolidation Act apply to CAT in such manner as other taxes.
Records
Accountable persons are obliged to retain records such as to enable a true return to be made and to substantiate a claim for relief. Records include books, accounts, documents from other data, manual or electronic relating to the assets concerned, cost, liabilities and expenses, consideration, relief or exemptions paid and valuation.
They must be retained for a period of six years from the valuation date. This period may be extended.
Investigation
General Revenue powers in relation to inspection and investigation apply to CAT. They have powers to require the production of books and records. This may be done administratively.
Where it is necessary they may apply to the High Court for an order in relation to the production of books and records. This is in addition to the authorized officer’s powers.
Third Party Requirement
A Revenue authorized officer may give notice to a third-party requiring information and books et cetera. A copy of the notice is given to the taxpayer.
The officer must have reasonable grounds for believing the third-party is likely to have information relevant to the liability. There is protection in respect of third-party professionals in relation to confidential privileged information.
There is power to apply to the High Court which is wider than the above-mentioned power, for information from a third party. This may be made in respect of a group of persons and not simply specified persons.
There must be reasonable grounds for believing the taxpayer has failed to comply with the act. The failure must prevent to lead to inability to properly assess or collect the tax and the information sought is to assist in assessing and collecting the tax.
An authorized officer may obtain samples of information other than medical records from a life insurance company in respect of classes of policy. This power may be used if Revenue is satisfied that there are circumstances such that the classes of policies have been used for the purpose of investment of untaxed funds.
Information from Financial Institutions
Revenue may issue a notice to a financial institution requesting it to make available information relating to a tax liability of a specified person. The person concerned is given a copy of the notice.
Written consent of the Revenue Commissioner is required. The financial institutiRn must disclose the information notwithstanding general customer confidentiality.
An authorized officer may apply to the appeals commissioner for consent to issue a notice requiring it to make available for inspection books and records relating to a person’s tax liability including a group or class of persons. The consent of Revenue Commissioners to the application is also required. The authorized officer must have reason to believe that the individual or group has failed with the obligations and that the failure has led to the inability of the Revenue to assess the tax that is relevant to an assessment and/or collection of the tax.
Further, an authorized officer may apply to the High Court for an order directed to a financial institution seeking access to books or records relevant to a person’s tax liability or that of a class or group. The consent of the Revenue Commissioners is required.
An authorized officer may apply to the District or Circuit Court for an order authorizing the officer to take up bank records for the purpose of investigating a revenue offence. An order may be allowed if there are reasonable grounds for suspecting that offence which would result in serious prejudice to the proper assessment or collection of tax has been committed and information in the possession of the financial institution is likely to be of substantial value to the investigation.
Prior consent of the Revenue Commissioners is required. These general provisions in respect of order apply to CAT. See the separate sections in relation to audit generally.
Statement of Assets Probate
Finance Act 2019 amends section 48 Capital Acquisitions Tax Consolidation Act 2003 which sets out the information to be provided to the Revenue Commissioners and the Probate Office in respect of the estate of a deceased person. The amendment is being made in the context of the introduction of an electronic process for applying for probate or letters of administration.
While some existing provisions relating to the probate process remain in section 48, a new section 48A now contains those provisions relating to the provision of information to Revenue. However, the detail about the information to be submitted, together with provision for the electronic submission of that information and related matters, are contained in regulations to be made by Revenue under section 48A. Section 48A will be commenced by Ministerial order in tandem with the commencement of the required regulations.
Section 66 FA 22 amends section 48A of the Capital Acquisitions Tax Consolidation Act 2003 which sets out the information to be provided to the Revenue Commissioners and the Probate Office in respect of the estate of a deceased person. The amendments are technical in nature and are intended to ensure the scope of the information to be provided is aligned with the scope of the information that was required under rior to its amendment.
The amendments also introduced a statutory obligation for banks to provide information in relation to a deceased person’s accounts to the person applying for probate in relation to the deceased’s estate or to an agent acting on their behalf.