Mr. Brian Duffy:

I thank the Vice Chairman for the opportunity to address the joint committee today. I am a tax partner in William Fry's tax advisers, Tax and Ireland, and have experience in tax litigation matters. In summary, we welcome many of the proposals. We seek greater clarity in some areas and the main proposals with which we have concerns are the holding of tax appeal cases in public, the removal of the right to a full rehearing in the Circuit Court and the proposed case stated procedure.

I will now give my comments on the main sections of the Bill and in areas to be welcomed, I refer to the independence of the tax appeal commission. To have an effective tax appeal system in Ireland, the tax appeal commission must be and must be seen to be a totally independent body. Any measures enabling the development of a wholly independent appeals body are to be welcomed. In respect of the withdrawal and dismissal of cases, this section gives legislative effect to the pre-existing practice set out in Revenue's tax and duty appeals manual and this is to be welcomed. On flexible proceedings, a flexible approach to tax appeals is practical and is to be welcomed. There may be an opportunity in this regard to include reference to the burden of proof. We do not believe that the burden should rest on the taxpayer in all circumstances and should be assessed on a case-by-case basis as a preliminary matter by the Appeal Commissioners. As for pre-hearing proceedings, it is clear that a significant focus of the new legislation is on settling the matter before reaching a hearing. Mechanisms that enable this, such as deciding the issue at a preliminary hearing or adjudication without a hearing, are positive developments so long as the taxpayer always maintains the right to choose a full hearing. Such mechanisms, if used by parties, should reduce waiting times and make the tax appeal system more efficient. In respect of determinations, it is essential that a comprehensive database of decisions is created.

We submit it is possible to achieve this without the introduction of public hearings. Taxpayers and their advisers should have access to previous determinations, as it would assist them from the outset in deciding whether it is appropriate to take an appeal against any matter in the first place.

Areas to be clarified include the issue of temporary commissioners. This section should outline specific criteria as to when a temporary commissioner should be appointed. As we set out in our submissions, a defined set of criteria is necessary to ensure that temporary commissioners are in fact used. We note that the Bill does not envisage a body of suitably qualified persons being formed from which to appoint a temporary commissioner. The use of such a body may be easier and more efficient. As for notice of appeal, this section does not appear to include a time limit in which the taxpayer must issue a notice of appeal. For the sake of clarity, it is suggested that a time limit be inserted. In respect of valid appeal, it is suggested that the definition of "appealable matter" be made more clear. On the refusal to accept an appeal, the wording currently is highly subjective and to safeguard the taxpayer, we suggest an objective, reasonable standard should be required such as, for example, where the Appeal Commissioners conclude on reasonable grounds that an appeal is without substance or foundation. Denying a taxpayer access to a hearing must be done in an objective and transparent manner.

I will now turn to the main areas of concern. In our opinion, the introduction of the public hearing of tax appeal cases before the Appeal Commissioners will constitute a disincentive to taxpayers appealing a tax matter on the basis that individuals and corporate bodies generally wish to maintain privacy over their tax affairs and finances. The grounds listed as reasons for holding a hearing in private are limited and vague. In addition, the threshold for maintaining an application based on these grounds is unclear. If ultimately it is considered necessary to introduce public hearings, we submit the reporting of such hearings should be restricted to protect the privacy of the taxpayer. For example, in family law proceedings, although reporters are allowed access to hearings, their reporting cannot identify parties expressly or implicitly. In addition, a party to the proceedings may apply to the court to have reporters excluded on the basis that the facts of the case are so specific that any degree of reporting would identify the parties.

In respect of appealing against determinations of the Appeal Commissioners, we disagree fundamentally with the removal of the rights for a full rehearing before the Circuit Court. It removes a fundamental safeguard to the taxpayer. An appeal by way of case stated is a highly specific form of legal appeal based solely on a point of law. Therefore, the taxpayer has no general right of appeal against the decision of the Appeal Commissioners, which is highly unusual in the context of judicial or quasi-judicial proceedings. In respect of the envisaged case stated procedure, it is unclear from the Bill but in our opinion, the parties to the proceeding should be given a right to agree to the content of the case stated as drafted by the Appeal Commissioner before it is transmitted to the High Court. We also believe that if the Appeal Commissioner drafts the case stated, then the commissioner should transmit it to the High Court.

In respect of evidence, we query the appropriateness of the ability of the Appeal Commissioners to admit evidence regardless of whether the evidence would be admissible in proceedings in a court of law in the State. This has the potential to deny parties fair procedures. The criteria for the admission of evidence should be based on more objective grounds. For example, evidence should be admissible if it is reasonable to consider that the admission of evidence is necessary to decide the matter. This concludes my opening statement. I am happy to discuss any points raised and hope my comments will inform the committee in its finalisation of the Bill. I reiterate that I am grateful for the opportunity to make a presentation to members today.