Oireachtas Joint and Select Committees

Thursday, 8 July 2021

Public Accounts Committee

2019 Annual Report of the Comptroller and Auditor General and Appropriation Accounts
Vote 10 - Tax Appeals Commission
Chapter 14 - Management of Tax Appeals

Ms Marie-Claire Maney(Chairperson, Tax Appeals Commission)called and examined.

9:30 am

Photo of Brian StanleyBrian Stanley (Laois-Offaly, Sinn Fein)
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Apologies have been received from Deputies Carroll MacNeill, MacSharry and Carthy. Deputy Verona Murphy is speaking in the Dáil but will join us later. I welcome everybody to the meeting. Due to the situation with Covid-19, only the clerk, support staff and I are in the committee room. Members of the committee are attending remotely from within the precincts of Leinster House. This is due to the constitutional requirement that, to participate in public meetings, members must be physically present within the confines of the place where the Parliament has chosen to sit, either Leinster House or the Convention Centre Dublin. I ask members to confirm their location before contributing to ensure we are adhering to that constitutional requirement. The Comptroller and Auditor General, Mr. Seamus McCarthy, is a permanent witness and is attending remotely.

Today, we will engage with officials from the Tax Appeals Commission to examine the 2019 appropriation accounts for Vote 10 - Tax Appeals Commission, and the Comptroller and Auditor General's report on the accounts of the public services 2019, Chapter 14 - Management of Tax Appeals. The commission has been advised that the committee has an interest in the highest value appeals before the commission. We are joined remotely from within the precincts of Leinster House by the following representatives from the Tax Appeals Commission: Ms Marie-Claire Maney, chairperson, and Mr. Paddy O'Keeffe, access officer. They are both very welcome. When we begin to engage, I ask members and witnesses to mute their devices when not contributing so that we do not pick up any background noise or feedback. As usual, I remind all in attendance to ensure their mobile phones are on silent mode or switched off.

Before we start, I wish to explain some limitations to parliamentary privilege, and the practice of the Houses as regards references witnesses may make to other persons in their evidence. As the witnesses are within the precincts of Leinster House, they are protected by absolute privilege in respect of the presentations they make to the committee. This means that witnesses have an absolute defence against any defamation action for anything they may say at the meeting. However, the witnesses are expected not to abuse this privilege and it is my duty as Chair to ensure that this privilege is not abused. Therefore, if statements are potentially defamatory in relation to an identifiable person or entity, witnesses will be directed to discontinue their remarks. It is imperative that they comply with any such direction.

Members are reminded of the provisions within Standing Order 218 that the committee shall refrain from enquiring into the merits of a policy or policies of the Government, or a Minister of the Government, or the merits of the objectives of such policies. Members are also reminded of the long-standing parliamentary practice that they should not comment on, criticise or make charges against a person outside the Houses or an official either by name or in such a way as to make him or her identifiable.

To assist our broadcasting service and the Debates Office, I ask that members direct their questions to a specific witness. If the question has not been directed to a specific witness, I ask each witness to state his or her name the first time that he or she contributes.

I call the Comptroller and Auditor General, Mr. Seamus McCarthy, to give his opening statement.

Mr. Seamus McCarthy:

The main role of the Tax Appeals Commission is to adjudicate, hear and determine appeals by taxpayers against decisions and determinations of the Revenue Commissioners concerning taxes and duties. The 2019 appropriation account of the commission records gross expenditure of €1.77 million. The estimate was €3.3 million and, as a result, there was a surplus of almost €1.5 million at the end of the year. Most of the underspend relates to the planned recruitment of additional staff taking longer than expected. I issued a clear audit opinion in relation to the account.

The commission was established on 21 March 2016 as an independent statutory body, replacing the previous Office of the Appeal Commissioners. As a result, the commission has been in a development phase over the past several years. It has had to develop new operating systems at the same time as it dealt with legacy cases it inherited, as well as new cases lodged since its establishment. The report before the committee today examines the management of the tax appeals process, and provides analysis on the value of tax under appeal at the end of 2019, the outcome of appeal cases and the time under appeal.

At the end of 2019, there were 3,357 open appeal cases, with a combined value of €3.8 billion. A small number of very high value cases accounted for 58% of the combined value. The average time that cases had been under appeal at that date was around two years. Almost a quarter of cases, accounting for €508 million in value, had been in the appeal system for three years or more. Some taxpayers pay the amount of tax in dispute before lodging an appeal. If the taxpayer is successful in the appeal case, Revenue is required to refund the taxpayer the amount prepaid. Revenue could not quantify for us the total amount prepaid relating to tax under appeal at the end of 2019. However, that information would be available on Revenue’s individual taxpayer records. In the period 2016 to 2019, the commission closed more than 3,900 appeal cases. Over 70% of the cases closed were either settled by the taxpayer with Revenue, or the taxpayer withdrew the case. The commission refused or dismissed 22% of the cases that had been closed.

The commission was required to make a formal determination in only 5% of the cases closed between 2016 and 2019. Once an appeal has been heard by the commission, there is no time limit within which the commission must issue its determination. At the end of 2019, a determination by the commission was awaited in 57 cases, and 23 of those cases, with a quantum under appeal of €114 million, had been heard prior to 2018. The outcome of an appeal can result in a revised tax assessment. Monitoring of the outcome of appeal cases would potentially provide Revenue with information about circumstances where there are significant reductions or increases in the original assessment for a particular tax type. While Revenue considers determinations issued by the commission, the examination found that Revenue did not actively monitor the impact of the appeal process on tax assessed at a global level.

In 2016, the commission procured a case management system at a total cost of €202,000. It was subsequently decided in 2018 that the system did not operate as intended and was written off by the commission. A replacement case management system developed as a temporary measure was still in place at the end of 2019. As the report was being finalised in September 2020, work was continuing to develop a permanent case management system for the commission. The examination identified some errors in the data recorded on the case management system, which better data entry controls could have eliminated. Discrepancies were also identified in the recorded quantum of tax under appeal when the commission’s data were compared to data extracted from Revenue’s appeals module system. This finding resulted in Revenue conducting a review and subsequently revising its data on appeal cases.

The chapter made five recommendations, three of which are addressed to the commission. These relate to improving the timeframe for the disposal of cases and the development of escalation procedures when delays arise; the setting of time targets for the issuing of a determination following a hearing; and a review of the commission’s requirements in advance of the procurement of a new case management system. The examination made two further recommendations addressed to Revenue, concerning the recording of tax appeal data on its own case management system; and monitoring of the overall change in assessed liabilities as a result of appeals. The commission has agreed to implement the recommendations addressed to it and the witnesses will be able to provide the committee with an update on the implementation of those recommendations.

Photo of Brian StanleyBrian Stanley (Laois-Offaly, Sinn Fein)
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I call Ms Maney to make her opening statement.

Ms Marie-Claire Maney:

I thank the Chair and the committee and the Comptroller and Auditor General for the introduction he gave to the commission.

I commenced as the first chairperson of the commission on 1 July 2020. I am a member of both the senior public service and the legal profession. To paraphrase Oscar Wilde, to be a member of one unpopular group might be regarded as a misfortune; to be a member of two, I know, looks careless. Now to the serious business.

The O’Donoghue report of 2018 and the Comptroller and Auditor General report of 2019 were properly critical of the commission. They highlighted significant issues with the functioning of the commission and made a number of important recommendations. I am pleased to inform the committee today that all of the recommendations for the commission in both reports have now been implemented. I am pleased to inform the committee that there has been a notable and noticed improvement in performance.

In 2020, the quantum of appeals determined increased by over 900% to €610 million. This year, we are set to determine appeals of the same magnitude. In 2020, we scheduled hearings to a value of €1.5 billion. In 2021, we have, to yesterday afternoon, scheduled hearings to a value of nearly €2 billion. Critically, we have reduced the backlog of awaited determinations by 80% and the remaining 20% will issue before the end of the year. Of that, 5% will issue before the end of July.

Since our reopening in 2020, all appeals heard are decided within measurable deadlines. We now have 2,900 appeals. Since January 2020 and the Comptroller and Auditor General report, our appeals on hand have reduced by 14%, namely, 460 appeals. At any time a significant proportion, currently 40%, cannot be progressed because there is a lead case in the courts or parallel proceedings connected to an appeal, such as a judicial review, are ongoing. Since 2016, we have closed 6,100 appeals to a value of €2.7 billion, which has contributed to the economy, to the Exchequer, or both.

The top 20 appeals on hand amount to €3 billion and are actively managed.The committee has asked for the top 10 appeals by quantum, which are worth €2.8 billion and involve just five appellants. At the other end, some 1,100 appeals have a value of less than €10,000 each and amount to €3 million. Each appeal is important to each taxpayer, and hence, important to me as the chairperson.

What has brought about the improvements? The headline operational improvements include the following: the staffing was realigned by me and administrative staff were recruited; temporary legal researchers were engaged; the Office of the Government Chief Information Officer assumed our IT systems support; investment in new IT to support digitisation was made; capability for remote and blended hearings was introduced; a simpler notice of appeal and statement of case was published; a modern website with search capability was launched; and the tender specification for a case management system was completed. I am pleased to inform the committee that we have recently received sanction from the digital oversight unit to go to tender.

In terms of headline governance improvements, a number of governance deficits were highlighted in the reports and so a full suite of required formal policies was completed. A governance framework, service level agreements and an actively managed risk register are now in place. All signage now complies with the national language Act. A recovery and resilience plan, an annual business plan and an accessible three-year statement of strategy were completed. The annual report was issued to the Minister for Finance in March, with publication in April 2021. Strict timelines for issuing determinations are overseen by me. Judicial reviews against the commission have been resolved, and as importantly, guidelines to avoid recurrence were compiled and no further litigation has arisen. I have had meetings with the Minister for Finance and all other relevant stakeholders.

In terms of future improvements and looking to the future structure, I am also an appeal commissioner. I have personally determined the highest value appeal to date at nearly €600 million. I have also determined appeals of less than €600. That wide spectrum of appeals encapsulates the challenge. There is no other quasi-judicial body, or even a court, dealing with such a range, from the volume of the Small Claims Court to the complexity and quantum of cases in the Commercial Court, and everything in between. As such, I submitted a proposal to the Department of Finance for a new tiered commissioner structure to match the appeals’ case base. I am pleased to inform the committee that sanction has been given, and hence, that tiered approach will start to align the case base. The O’Donoghue recommendation for the State to consider mediation and alternative dispute resolution, as is found in the UK, has considerable merit. I support this recommendation.

Finally, I want to thank my small staff - the anchor, rota and remote teams - and commissioners for their adaptability, esprit de corpsand hard work during this last unique year, and for their co-operation after a five-month closure to ensure the smooth resumption of hearings, both remote and physical, on 4 August 2020.

The commission has made progress, but there is some way to go before it has the required throughput and output relative to the case base, contributing to the economy and the Exchequer. I am committed to that endeavour.

I am joined this morning by my colleague, Mr. Paddy O’Keeffe, head of corporate affairs.

Photo of Brian StanleyBrian Stanley (Laois-Offaly, Sinn Fein)
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The lead speaker from the committee is Deputy Catherine Murphy, who has 15 minutes. I will give her a reminder after 12 minutes. Following that, each member has seven minutes.

Photo of Catherine MurphyCatherine Murphy (Kildare North, Social Democrats)
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I welcome the witnesses to the meeting. Ms Maney's presentation is very different from the one we received when representatives of the Tax Appeals Commission appeared in front of the previous Committee of Public Accounts. It was a very memorable meeting for the chaos that was presented. Many of the things that have happened since then represent a positive change. I compliment Ms Maney on that. We were told about computers catching fire and there being no desks in the commission, and all sorts of things. It was very difficult.

Obviously the commission had a legacy case load. It has been working to reduce that. What would Ms Maney say is a manageable case load for the staff working in the commission?

Ms Marie-Claire Maney:

Currently, we have 33 staff, which includes the commissioners and me. There are four and a half commissioners, which, as the Deputy can appreciate, is just not feasible in terms of getting through the workload of 2,900 cases. We have 28 administrative staff currently. The Deputy's question is a difficult one. I would like to have another five members of staff. As we have moved towards holding remote hearings, we have found that we need more support staff to support more hearings, because more hearings can be held remotely. We have had to invest in more clerical officers who run the IT side of the remote hearings.

However, the biggest issue we have is on the commissioner side. That is why I have proposed to the Department of Finance the introduction of a different structure in respect of the commissioners. I would like to see ten to 12 commissioners. That would give us a chance to cover the case load. There is no point in public officials coming to the Committee of Public Accounts and saying that we do not need more resources. I do not think it would cost an awful lot more money because we are going to stratify the case base to deal with cases at different levels, and have commissioners at different levels and salary grades commensurate with the complexity of the cases.

The main issue we have is trying to get through the backlog of cases. We have made great strides and we have provided the numbers on that to the committee. I would like to get a manageable number. We have 1,500 cases every year. I would like to be dealing only with cases dating back six months and the current workload.

That is what we are aiming for. Perhaps 500 to 1,500 would be what I would envisage as a good, efficient body. I am sorry for taking my time to get to that point.

Photo of Catherine MurphyCatherine Murphy (Kildare North, Social Democrats)
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I thank Ms Maney. She might try to keep her responses a little shorter because I have several questions to get through and time is tight. All ten of the big cases relate to corporation tax. What range of corporation tax dominates the rest of the cases, or does that relate predominantly to the bigger ones?

Ms Marie-Claire Maney:

I think approximately 54% of the quantum under appeal is corporation tax. We had an oddity last year in that I dealt with a case of nearly €600 million - €587 million, to be precise - on stamp duty. There are oddities, but, for the most part, the very large cases are corporation tax. They are extremely complicated and they take a long time. Members will see on page 15 of the booklet we sent to the committee that there is a case listed for the whole month of November that involves €1.6 billion. Once we get that off our books, so to speak, that will make a good inroad into the €4.2 billion that is currently under appeal.

Photo of Catherine MurphyCatherine Murphy (Kildare North, Social Democrats)
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On the other taxes that feature, what is the next category after corporation tax?

Ms Marie-Claire Maney:

We have two different barometers, namely, the numbers and quantum. On the numbers, income tax constitutes the biggest number of cases we have, while on quantum, it is corporation tax.

Photo of Catherine MurphyCatherine Murphy (Kildare North, Social Democrats)
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The commission has a relatively small staff. When it gets through the caseload, it will become more manageable, and, as Ms Maney told us, it is a different structure. She stated that the commission brought in some additional legal staff. Is that correct?

Ms Marie-Claire Maney:

Yes, we sourced one extra person in 2020 and we have added another three in 2021. They are self-employed and they are providing research facilities and assistance to deal with the backlog of awaited determinations that was outlined in the Comptroller and Auditor General report and that has damaged reputation. We have had a lot of individuals and corporations waiting for those determinations. Mr. McCarthy mentioned 57 and we are now down to 12 of-----

Photo of Catherine MurphyCatherine Murphy (Kildare North, Social Democrats)
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I might stop Ms Maney there in order that we can push on with this. Are the legal staff employed on a temporary, contract basis or daily basis, for example? What is the basis for their employment and what is the cost in that regard?

Ms Marie-Claire Maney:

Last year, we spent €16,000 on them, and this year, it is €44,000. Given that Mr. McCarthy mentioned 57 determinations, this measure has helped to cut the backlog to 12, so-----

Photo of Catherine MurphyCatherine Murphy (Kildare North, Social Democrats)
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Does the commission intend to move away from that to a more permanent-----

Ms Marie-Claire Maney:

Absolutely. It is a temporary measure. They are given cases and a daily rate and they have proven very cost-effective.

Photo of Catherine MurphyCatherine Murphy (Kildare North, Social Democrats)
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The commission had a case management system configured to its requirements. It appears a great deal of effort went into providing it but it did not function as it was intended. The commission dispensed with it and is now using a system that was built in-house. It has now sanction to purchase another case management system. How confident is Ms Maney that the new case management system will do the job, given the commission's experience with the previous system, which was quite expensive and did not function? Is that system completely gone or is any part of it usable?

Ms Marie-Claire Maney:

I understand that was back in 2018, before my tenure. I understand it is completely unusable and has been written off in previous accounts. I am absolutely confident the new system will be fully functional and will provide the specification we need. That is why we set up a governance team with a representative of Revenue. We have had great assistance from the Office of the Government Chief Information Officer, OGCIO, and I compliment Mr. Barry Lowry. It is a fantastic organisation. We also got a proper business analyst, at a cost of €28,000, which I believed was really important to get that specification right. That has helped us do the tender specification and we have now got sanction from the digital oversight unit. We have had full consultation with Revenue, because we want the systems to interact between the two organisations, and we have had a system fully costed and specified. We are getting assistance-----

Photo of Catherine MurphyCatherine Murphy (Kildare North, Social Democrats)
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I might stop Ms Maney there because I have limited time. What has the commission spent to date on the case management system?

Ms Marie-Claire Maney:

A total of €28,000.

Photo of Catherine MurphyCatherine Murphy (Kildare North, Social Democrats)
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That is the figure for the new system but I refer to the total figure, right from the word go.

Ms Marie-Claire Maney:

On the new system, the figure is €28,000.

Photo of Catherine MurphyCatherine Murphy (Kildare North, Social Democrats)
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How much was spent in total on the previous system?

Ms Marie-Claire Maney:

I am not familiar with the figures because it is a previous-----

Photo of Catherine MurphyCatherine Murphy (Kildare North, Social Democrats)
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Will Ms Maney revert to the committee with a note?

Ms Marie-Claire Maney:

I think it was about €228,000, which was very suboptimal. I can only apologise on behalf of the public sector for that cost-----

Photo of Catherine MurphyCatherine Murphy (Kildare North, Social Democrats)
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Was there any attempt to go back to the people from whom the commission purchased the system to retrieve any funding?

Ms Marie-Claire Maney:

No, because I think there was an issue - again, this is three or four years ago - over the intellectual property rights of the system, so it could not function because of that. I am not trying to be evasive but it is some years ago. The Comptroller and Auditor General did a report on it and that is all fully in the public domain. It was not feasible to start going back-----

Photo of Catherine MurphyCatherine Murphy (Kildare North, Social Democrats)
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What platform is the commission using at the moment?

Ms Marie-Claire Maney:

We are using the OGCIO's platform. I think it is a base transceiver station, BTS. The case management system is Lotus Notes. All our IT - I am sorry but I am not an IT expert - is under the OGCIO framework. There has been an excellent changeover when we changed over on 4 August-----

Photo of Catherine MurphyCatherine Murphy (Kildare North, Social Democrats)
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I want to keep the time to ask questions if Ms Maney does not mind, with short replies. Is the Lotus Notes system fully licensed, with no issues in that regard?

Ms Marie-Claire Maney:

No, there are absolutely no issues there.

Photo of Catherine MurphyCatherine Murphy (Kildare North, Social Democrats)
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The commission has had some data breaches. Have they been problematic? Has anything been referred to the Data Protection Commissioner?

Ms Marie-Claire Maney:

Sometimes - the very odd time, in any organisation - people send an email and the email address is entered incorrectly. Any incidents have been low risk.

Photo of Catherine MurphyCatherine Murphy (Kildare North, Social Democrats)
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Turning to fresh appeals, has anything yet come in to the commission regarding the temporary wage subsidy scheme, TWSS, or the employment wage subsidy scheme, EWSS?

Ms Marie-Claire Maney:

No, one of the reasons we brought in the automisation and robotics was we anticipated, perhaps, an influx with regard to the pandemic payments, but that has not yet materialised and we are in July.

Photo of Catherine MurphyCatherine Murphy (Kildare North, Social Democrats)
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When an appeal is made to the commission, a stop is put on penalties and so on. If somebody decided just to negotiate rather than seek an appeal, would the same apply? Is there a disincentive against getting into mediation at an early stage or is there an advantage in putting a stop on the penalties?

Ms Marie-Claire Maney:

That would be a matter for Revenue. In terms of mediation, we do not currently have the facility to ask the parties or to insist on mediation. That would need a legislative change and I would recommend that change. There is a review system in Revenue, and according to chapter 14 of the Comptroller and Auditor General report, there have been 58 uses of it over five years. Mr. McCarthy can give the correct figure if I am off but it is close to that. That review system could be used more.

There is certainly no incentive for any individual or corporation to not appeal to us.

Photo of Catherine MurphyCatherine Murphy (Kildare North, Social Democrats)
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On corporation taxes, quite a lot have gone through at this stage.

Ms Marie-Claire Maney:

They have.

Photo of Catherine MurphyCatherine Murphy (Kildare North, Social Democrats)
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Are there learnings from the experience of appeals within the TAC? Are issues cropping up routinely that could be dealt with and prevent appeals? Are there issues that jump out to Ms Maney that would be of benefit for the committee to hear?

Ms Marie-Claire Maney:

Sometimes it is the case that people in Revenue have made errors in assessments. It would be useful if those could be picked up and addressed with the individuals concerned because that would prevent an appeal. Many cases are settled or are withdrawn once Revenue and the party have conversations. There is, unfortunately, nothing that springs to mind to answer the Deputy's question about trends.

Photo of Catherine MurphyCatherine Murphy (Kildare North, Social Democrats)
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That is the largest issue from a financial point of view.

There was a lag in recruitment. The commission was given authorisation to recruit additional staff and it took longer than anticipated to do that. The situation necessitated bringing in people on a daily or temporary basis. What was the reason for that? Was it something unanticipated? Did the commission lose staff? What were the circumstances? Getting to the optimal level of staff would have been beneficial.

Ms Marie-Claire Maney:

In 2019, it seemed to take some time for the TAC to get up to the employment control framework it has. I do not mean to be evasive but that was before I was in post. There are issues with getting personnel in the public sector through the Public Appointments Service, PAS.

Photo of Catherine MurphyCatherine Murphy (Kildare North, Social Democrats)
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Ms Maney might tell us about that. Is it lengthy and cumbersome to hire new staff?

Ms Marie-Claire Maney:

Since I came in, I have found the PAS to be excellent. It provided us with temporary clerical officers very quickly. We took two new clerical officers off the panel. It depends what panels the PAS has in place but I have found that it provides an excellent service in my time. I can only speak of my own experience.

Photo of Catherine MurphyCatherine Murphy (Kildare North, Social Democrats)
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Is the commission up to its full complement of staff at this stage?

Ms Marie-Claire Maney:

It is. We recently lost a case manager who went on mobility in the way of normal churn. We also lost a commissioner who retired from the public service in May.

Photo of Catherine MurphyCatherine Murphy (Kildare North, Social Democrats)
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In addition to that, are there also people who have been hired on a temporary basis?

Ms Marie-Claire Maney:

There are. They are hired on a daily basis to deal with the backlog of the determinations. That caseload is a specific project that will finish this year and the hiring of staff on a daily basis will also finish.

Photo of Catherine MurphyCatherine Murphy (Kildare North, Social Democrats)
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How much are those staff paid on a daily basis?

Photo of Brian StanleyBrian Stanley (Laois-Offaly, Sinn Fein)
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We will have a second round of questioning. I call Deputy Hourigan.

Photo of Neasa HouriganNeasa Hourigan (Dublin Central, Green Party)
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I welcome the witnesses. I commend them on tackling the delays that were in the system. They have done good work.

Ms Marie-Claire Maney:

I thank the Deputy.

Photo of Neasa HouriganNeasa Hourigan (Dublin Central, Green Party)
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For those of us who are not as immersed in the area, these matters can seem opaque. I am particularly interested in the case that Ms Maney mentioned will come up in November, involving €1.6 billion. I am trying to understand the nature of how the TAC is working alongside or in parallel to Revenue. It is my understanding that the case in question has gone to the High Court. Is that correct?

Ms Marie-Claire Maney:

That case has finished in the High Court. Does the Deputy want me to give her an understanding of that particular case to generally inform her about the interaction between the courts and the commission? Would that be helpful?

Photo of Neasa HouriganNeasa Hourigan (Dublin Central, Green Party)
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I have done a bit of reading about the case and have a couple of questions, so perhaps we could go through it that way.

Ms Marie-Claire Maney:

That is perfect.

Photo of Neasa HouriganNeasa Hourigan (Dublin Central, Green Party)
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The commission is going to be talking to the relevant people in November. I am going to try not to mention the company involved because I am not entirely sure if we are allowed to. The company has advised its shareholders that its representatives will go into talks with Revenue and come to an agreement. That agreement could result in the company paying less than 10% of what it owes. It would be fantastic if we could all do that with our taxes. I would love that. Actually, I would not, as a public official, because we would have nothing to spend on our hospitals and infrastructure. I am trying to understand who is going to go into negotiations with the company in question about paying less than it owes. If it will be Revenue, which I presume it will be, what regard must be given to the decision the TAC will make in November? Does Revenue take advice from the TAC?

Ms Marie-Claire Maney:

The question of who goes into negotiations is completely outside our remit. We have listed the case for hearing as a tax appeal in November for a full month with commissioner Conor Kennedy. What happens before the case is entirely a matter between that organisation and Revenue. We have no influence or bearing on that.

Photo of Neasa HouriganNeasa Hourigan (Dublin Central, Green Party)
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Nobody will come to the door of the TAC before the judgment asking for an opinion. If that is the case, is it Ms Maney's understanding that the TAC's opinion is read and taken into account during negotiations?

Ms Marie-Claire Maney:

We do not give an opinion. We will give a determination, or a decision, after hearing the case in November. The organisation concerned has already been to the High Court for a judicial review, which is a separate proceeding. It lodged its tax appeal with us at the same time as the judicial review. We could not hear the judicial review, which obviously causes a delay on our statistics. The High Court decision was finalised in November or December 2020. In January, after the timeline for appeal had expired, we wrote to the parties and asked whether they want the case listed because we were keen to list it. The parties gave us the date in November as the soonest time when both parties could be prepared for the hearing due to the complexity of the hearing. Anything that goes on prior to our hearing is entirely a matter for the parties. Those are the vagaries of a quasi-judicial body. We could be told the night before or even on the morning of a hearing that a case has settled. In that scenario, we have, effectively, lost a month because a commissioner's time has already been allocated to that case.

Photo of Neasa HouriganNeasa Hourigan (Dublin Central, Green Party)
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That does not seem a useful scheduling of the time of public servants. After November, when the TAC makes a determination, can Revenue still go into negotiations with the company?

Ms Marie-Claire Maney:

It certainly could. That is a matter for the parties.

Photo of Neasa HouriganNeasa Hourigan (Dublin Central, Green Party)
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Could Revenue reach an agreement with the company concerned to pay a reduced amount of tax, less than the owed €1.64 billion, after the TAC has made its determination?

Ms Marie-Claire Maney:

That is entirely a matter for the parties. Our determination is entirely separate from any negotiations to settle any tax liability that occur before, during or after any hearing.

Photo of Neasa HouriganNeasa Hourigan (Dublin Central, Green Party)
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I totally understand that. My concern is that we are hearing things from the company concerned. In the public sphere, it is saying it can go into negotiations with Revenue because that is preferable to years of litigation. That puts the State over the barrel where there is a parallel process. The company has a lot of recourse and the State has very little.

Ms Marie-Claire Maney:

I could not make any comment on that.

Photo of Neasa HouriganNeasa Hourigan (Dublin Central, Green Party)
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Okay.

Ms Marie-Claire Maney:

Every organisation and individual has a right to take an appeal on any issue or to go to the courts. Even after our determination, a company has a right to go to the High Court if there is a requisite point of law to appeal. It can thereafter go to the Court of Appeal and the Supreme Court. That is the proper functioning of a democracy.

Photo of Neasa HouriganNeasa Hourigan (Dublin Central, Green Party)
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I think we will be seeing more of that because one of the arguments the company in question is making is that it had a legitimate expectation to be treated in a particular way.

I ask about the original case management system, CMS, although I know it was before the witness's time. I do not know if there is anybody else on the call who can answer this for me. Am I correct in saying the original CMS was also given the go-ahead by the Office of the Government Chief Information Officer, OGCIO? The OGCIO has given the go-ahead for the tendering or procurement of a new system. It seems the Tax Appeals Commission has given much consideration and thought to how to improve the system but has the OGCIO done similar work with its tendering and procurement processes? Was it involved with the original CMS that had to be repudiated in 2018? It seems it must also do a review.

Ms Marie-Claire Maney:

It was not involved with the original tender at all. I am not even sure the OGCIO existed at the time.

Photo of Neasa HouriganNeasa Hourigan (Dublin Central, Green Party)
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It is what I am asking. The OGCIO was established in 2013.

Ms Marie-Claire Maney:

We will follow up on this but my understanding is it had absolutely no involvement with the tendering process for the previous defunct case management system. I could not cast any aspersions on that organisation. My experience with the organisation is it is an exceptional body that has provided us with an exceptional service. I must speak as I find it.

Photo of Neasa HouriganNeasa Hourigan (Dublin Central, Green Party)
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I might have time for one more question. We have heard from the Comptroller and Auditor General today that there may be work to be done on the Revenue monitoring tax appeals in a more active way. From the other side, is the Tax Appeals Commission monitoring the progress of particular cases? It seems to be from today's answers that it is. If it is, how many of all the cases being dealt with are going through a parallel system involving the High Court?

Ms Marie-Claire Maney:

The Deputy has probably asked me the one question on which I do not have statistics. That relates to parallel proceedings. I will check with my colleague in a moment. With the larger cases, I am not aware of parallel proceedings numbers but we can come back to that. I can give an example of what happens with parallel proceedings. The farmers' industry had a case heard by ourselves and that affected more than 100 different farmers. We did one lead case and that went to the farmers in terms of positivity. Revenue appealed that and it has gone to the High Court. That means the 156 other cases are still on our books and we cannot close them because there are parallel proceedings now going through the system. There are quite a few of those cases. Some of these happened before judicial review and we cannot hear them. Others go to the High Court afterwards. We can come back with a number. It is probably in my huge pack.

Photo of Neasa HouriganNeasa Hourigan (Dublin Central, Green Party)
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It is okay. I understand the problem. The witness does not need to give me a percentage as she does not have the number but does this cause a significant delay in the work?

Ms Marie-Claire Maney:

Yes. Of the 2,900 appeals, there are approximately 1,600 that we can work on. The rest are stuck, for want of a better expression, in a system that cannot be moved.

Photo of Neasa HouriganNeasa Hourigan (Dublin Central, Green Party)
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It is outside the control of the office.

Ms Marie-Claire Maney:

Yes. There are 2,900 appeals and approximately 60% is all we can work with. There are 40% of cases in a different and parallel system that cannot be touched until there is movement. I assure the Committee of Public Accounts that once they are moved in the courts and released, we act very quickly, as evidenced in the case referred to involving €1.6 billion. We were proactive in saying we wanted to list it.

Photo of Neasa HouriganNeasa Hourigan (Dublin Central, Green Party)
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To throw a bit more uncertainty into proceedings, the case we mention is €1.64 billion. In one of the reports it was listed as 43% of a total of €3.75 billion caught up in tax appeals as of last September. We are talking about the quantum involved and the numbers being dealt with. If Revenue is going to negotiate and make a settlement, and I know the witness cannot comment on this, on anything in the region of 10% or 15% of that €1.64 billion, we would not be talking about the same numbers. The parallel process does not deal with the same quantities of tax liability.

Ms Marie-Claire Maney:

It is a very fair point but we can only give the number given to us in terms of the quantum of appeal. Those are the numbers we use. As the Comptroller and Auditor General report indicates, our number was found to be on the button and it is what we must take. We cannot get involved with lower numbers or settlements. That is the system and the number is €1.6 billion according to my records. That is what the taxpayer and Revenue have informed us of and the statistic we use. It would be very nice if I could use lower numbers today but these are what we are using. It is currently €4.2 billion under appeal in the system.

Photo of Neasa HouriganNeasa Hourigan (Dublin Central, Green Party)
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I am sure I am out of time. It may not be a case for the witnesses today but I would like to understand more about who in the Revenue is negotiating with these companies, how that process is undertaken and the oversight.

Ms Marie-Claire Maney:

That is clearly a matter for Revenue. It is a very legitimate question.

Photo of Cormac DevlinCormac Devlin (Dún Laoghaire, Fianna Fail)
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I welcome Ms Maney and Mr. O'Keeffe. I welcome Ms Maney to her role, which is new enough, and commend her on the work she has undertaken in a short period. She took over at a very difficult time and from reading her report and the other information given to us, particularly around case management conferences and hearings that were re-established during the height of the pandemic, it was very important that they were re-established as quickly as possible.

I have a number of broad-ranging questions but am limited by time so I would appreciate if the replies could be brief. The witness would be familiar with the alternative dispute resolution system in the UK. The commission runs case management conferences so how similar are they? How frequently are they used? In what kinds of cases are they used? They cannot be used with all appeals but Ms Maney might outline the circumstances in which they are done versus in a hearing, for example.

Ms Marie-Claire Maney:

The case management conferences tend to be used in the larger cases and the smaller cases do not really need them. They are used to set directions and get parties ready for hearing. We find that once we engage with parties, settlements come from that listing or we get everybody prepared for the full hearing. That is all time and time is money and public money at that.

The case management conferences are done remotely now, which we find very efficient. They are an excellent vehicle. They are not officially an alternative dispute resolution mechanism. We have found that by calling the parties together, it can assist settlements but we cannot be party to that. The Deputy's point is very well made.

Photo of Cormac DevlinCormac Devlin (Dún Laoghaire, Fianna Fail)
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A percentage of cases are heard via case management conference. What percentage of the cases dealt with by the commission are progressed in that regard?

Ms Marie-Claire Maney:

Off the top of my head, it is probably approximately 60%. There is a good percentage of the smaller cases where one would not really need to have a case management conference and it would add to the burden, especially for individuals and with cases worth less than €1,000 or where they need some assistance. For anything over €50,000 or even €10,000, we find a case management conference very useful. It is efficient for parties and ourselves.

It is approximately 60% and it might be higher. I can get the percentage for the Deputy.

Photo of Cormac DevlinCormac Devlin (Dún Laoghaire, Fianna Fail)
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Ms Maney might come back to us with that, out of interest. In terms of an appellant making a decision on whether to appeal the assessment from Revenue, 44% of cases were withdrawn by the appellants. If more information was given by Revenue at an earlier stage, would it change the course of an appellant bringing a case? What is the experience with appellants not of Ms Maney but of the commissioners? Is it an issue?

Ms Marie-Claire Maney:

I have had experience with appellants. Sometimes they do not understand an assessment or the information. More engagement by the public sector with citizens can only assist. I could not go any further than this.

Photo of Cormac DevlinCormac Devlin (Dún Laoghaire, Fianna Fail)
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I understand. I know it is straying into the arena of the Revenue Commissioners.

Ms Marie-Claire Maney:

Yes.

Photo of Cormac DevlinCormac Devlin (Dún Laoghaire, Fianna Fail)
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The committee has dealt with the Revenue Commissioners previously. From our perspective we are trying to understand the interaction between the TAC and Revenue and trying to make a recommendation for improvements. In a bizarre way, although many witnesses do not believe it, the Committee of Public Accounts is here to help. In terms of the supply of information from Revenue to the appellant and the reason for the assessment, in the UK there is a slightly different system with which I am sure Ms Maney is familiar. Would this type of system be more appropriate here? Perhaps it is unfair of me to ask. I am conscious we have a report to compile after this in which we will make recommendations. Is there a need for reform at that early stage?

Ms Marie-Claire Maney:

We engaged with the Department of Finance in March this year. We have asked it to consider alternative dispute resolution and to look at the UK model. I have also engaged with the Irish Tax Institute. We have had a good discussion about alternative dispute resolution. According to its recent survey of members, they are in favour of such a mechanism. It would be helpful. It certainly would help the TAC if the facility were available to the citizens of Ireland and to organisations. This is also the case with regard to caseload. There is a lot of merit in it and we would welcome any assistance the Committee of Public Accounts could give us or give citizens or organisations.

Photo of Cormac DevlinCormac Devlin (Dún Laoghaire, Fianna Fail)
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We might follow up on this with the Department when it comes before us next. An appellant has 30 days from the time of Revenue's assessment. Is this sufficient time? Does the commission find that people are rushed? It could come out of the blue for some. I am speaking about individuals rather than the corporate side.

Ms Marie-Claire Maney:

Yes, I understand.

Photo of Cormac DevlinCormac Devlin (Dún Laoghaire, Fianna Fail)
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Equally for the corporate side there might be the same concern. Does Ms Maney think 30 days is sufficient? Is it longer in the UK?

Ms Marie-Claire Maney:

I do not know what it is in the UK. I am sorry.

Photo of Cormac DevlinCormac Devlin (Dún Laoghaire, Fianna Fail)
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That is all right.

Ms Marie-Claire Maney:

I have studied its strategic system. Whatever time limit is given it is perhaps always arguable that it would not be enough. I believe 30 days is a good timeline. We do have a facility to accept late appeals and we are usually good where appellants engage with us and give us sufficient reasonable reasons they are late. Of course there is a limit on it also. During this past year in particular, with the unique circumstances, we have not been too draconian with regard to these reasons. It is a fair question. The difficulty with time limits is it does not matter what they are, somebody always says they should be shorter or longer. That is all I can say on this.

Photo of Cormac DevlinCormac Devlin (Dún Laoghaire, Fianna Fail)
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I stand to be corrected but I believe in the UK it could be 60 days before a decision has to be taken by a prospective appellant.

To turn to the TAC itself, I note there was an underspend because staff could not be taken on. How is the commission getting on with this? Earlier, Ms Maney said there were four commissioners. There was an underspend because of non-recruitment. Is it just commissioners that the TAC is looking to take on? What expertise is it looking to take on?

Ms Marie-Claire Maney:

At present, I am at my employment control framework. I cannot take on anybody because it is a constraint and it would have to be changed. I suggest that in the new structure we have a tiered commissioner structure so the salaries would change. This would free up some money to recruit more. The underspend from before I joined was, for the most part, with regard to administrative staff and trying to get in those various grades. Last year, there was an underspend some of which was accountable by my salary. The recruitment campaign for me took six months. I was informed in the middle of June and I started as soon as I could, which was 1 July. These are some of the reasons for the underspend.

Photo of Verona MurphyVerona Murphy (Wexford, Independent)
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I apologise for any duplication as I missed the first 30 minutes of our meeting because of Dáil speaking time. The TAC is new to me. I was not aware of it. Many people believe that Revenue is a law until itself and there is no appeal commission. The structure I have been reading about is well placed. It has existed since 2016.

With regard to the recommendations made in last year's accounts by the Comptroller and Auditor General, the amount of tax under appeal in July 2018 was €1.8 billion. This seems to have doubled. Notwithstanding that a portion of this sum will be successfully appealed, a considerable amount will fall to be collected. The timely receipt of Exchequer amounts due is dependent on how efficiently the TAC processes and finalises appeals cases. The recommendation from the committee at that time was that measurable targets would be set for progressing and finalising tax appeals on an annual basis. Will the witnesses update the committee on the TAC's progress in achieving its output targets on closing tax appeals and issuing determinations since the implementation of the recommendation?

Ms Marie-Claire Maney:

As detailed on page 7 of the briefing, we introduced a new timelines for cases. For cases up to €1 million it is one month for issuing a determination; for cases between €1 million and €10 million, it is two months; and for cases in excess of €10 million, it is three months. All of the cases heard since September, bar three, were determined within these timelines, which is approximately 98%. The three undetermined cases were due to the domestic reasons of a particular commissioner, the Covid pandemic and a bereavement. Everything since the recommendation came into place has gone through in the timelines. With regard to aged determinations mentioned by Mr. McCarthy in his opening statement, there were 57 at the end of December 2019. This has been reduced to 12 outstanding determinations. I apologise on behalf of the State for those cases being outstanding. Exceptional work has been done to reduce the number and it will reduce to zero by the end of the year. The committee's recommendation was taken very seriously by me and it has been adhered to.

Photo of Verona MurphyVerona Murphy (Wexford, Independent)
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Did Ms Maney say only two cases were not covered?

Ms Marie-Claire Maney:

I believe it is three cases.

Photo of Verona MurphyVerona Murphy (Wexford, Independent)
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What is the monetary value of those cases to the Exchequer?

Ms Marie-Claire Maney:

One case is worth €400 million, which was heard in November last year, within two weeks. We hoped to have it issued in February but unfortunately there was a bereavement in the Covid pandemic.

Photo of Verona MurphyVerona Murphy (Wexford, Independent)
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What cases are outstanding?

Ms Marie-Claire Maney:

That one will issue in July. The value of the other two is below €1 million. I have the records somewhere.

Photo of Verona MurphyVerona Murphy (Wexford, Independent)
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Is it fair to say that although it is only one case, it is approximately one quarter of the outstanding revenue, if not one fifth? What is the value of the outstanding 12 legacy cases?

Ms Marie-Claire Maney:

The figure for the 12 legacy cases is €153 million.

Photo of Verona MurphyVerona Murphy (Wexford, Independent)
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Can Ms Maney give a timeline for when she expects those to close?

Ms Marie-Claire Maney:

That is open and is in the pack. It will be the end of this year.

Photo of Verona MurphyVerona Murphy (Wexford, Independent)
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Ms Maney highlighted that the Covid pandemic has had an effect. To what extent has it led to other backlogs in appeals?

Ms Marie-Claire Maney:

We were closed for five months prior to my coming in. My first task on joining an empty office on 1 July was to get the office reopened and get information technology facilities. That is why we joined the Office of the Government Chief Information Officer to get Polycom and all the IT equipment. I am delighted to say we opened on 4 August 2020 and started remote hearings. We have no backlog to do with Covid. All the hearings that had been postponed for those five months were then heard. We have been through all that.

Covid-19 had the normal effect in the sense that when there is a closure there is a backlog, but I am delighted to say that we put in place the anchor team in August and teams that come in on a rota. We have been through level 5, level 4 and level 4 plus. I do not even know what level we are at currently. The rota changed with those levels. We have had all the vagaries that a pandemic brings to any organisation but I am delighted to say it did not stop us or stop me. We have made great progress in spite of the pandemic. There is no backlog of post and there is no backlog of cases being heard. We are full steam ahead. In 2020, Covid had an impact but not currently.

Photo of Verona MurphyVerona Murphy (Wexford, Independent)
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As Ms Maney said, it has affected everyone. I assume Ms Maney's brief as chairperson of the Tax Appeals Commission is not one whereby she can work from home. Are there people working from home?

Ms Marie-Claire Maney:

Yes, we have had to take into account the restrictions. We are classified as an essential service under the administration of justice. We have a small anchor team. They bring people into the building and we have people who set up the scheduling and who manage IT. There are between six and eight people there at any one time. Then we have teams who come in on a rota. Currently, the rota is one week in four. That brings in another eight to ten people. We have had people who have had to self-isolate and stay at home and cases where it is really not essential to come into the office. These people have worked away, and have done work including proofreading determinations and all the post.

All the files last year under my domain were digitised. That really helped with remote working. We have had a mixed bag. There has been an unusual management structure but we have all adapted to it and it has worked well. I have never met one third of my staff. Obviously, we are online but we have never met. That is the pitch I am on and I have enjoyed the pitch. We have made the best of it. I have never met one third of the 28 administrative staff.

Photo of Verona MurphyVerona Murphy (Wexford, Independent)
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My last question relates to the fact that dealing with the Tax Appeals Commission is stressful for all manner of reasons. I am sorry if I am doubling up, but there have been cases involving a delay in determinations. What process has the commission put in place to ensure that the time taken to issue a determination after an appeal is reduced? In light of Covid one can imagine, through no fault of the commission but rather the pandemic and Covid, that determinations have been extended. Has the commission put something in place?

Ms Marie-Claire Maney:

Yes, page 7 of the briefing sets out the timelines for a case of up to €1 million. The determination is issued within one month. The commissioners receive a schedule each month from me and I monitor it. For cases between €1 million and €10 million the determination has to go out within two months. Cases over €10 million involve dealing with complex issues and the period for determination is three months. That has been published. The parties know that. That is in our annual report and in the briefing prepared for the Committee of Public Accounts. Since that came in, 98% of the determinations have gone under those timelines. There are always cases that are outside the norm. There is a €1.6 billion case that the other Deputy referred to. That may take a longer time but certainly every other case has gone out under those timelines. They are closely monitored by me. The schedule team draws up a report for me each month for each commissioner and I speak to the commissioners regularly. They are also told the number of days if it is going over the timeline. Anyway, I am pleased to say that of the cases since this came in last October, only three went over those deadlines. Again, those were outside the control of the commission and I apologise to the parties for that.

Photo of Verona MurphyVerona Murphy (Wexford, Independent)
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My thanks to Ms Maney. I would like to see her run other Departments.

Photo of Brian StanleyBrian Stanley (Laois-Offaly, Sinn Fein)
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Thank you, Deputy Murphy. There will be a second round and I will let you back in if you have another question. Deputy Colm Burke has seven minutes. I will give him a reminder after five minutes.

Photo of Colm BurkeColm Burke (Cork North Central, Fine Gael)
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My apologies for being late and my apologies to our guests for not being available for the presentation. Ms Maney referred to the mediation process in the opening statement. At what stage does that type of engagement arise? Has it occurred in many cases at this stage? Is it only now being developed?

Ms Marie-Claire Maney:

For general settlements it is a long-standing facility but we do not have legislated mediation in this country. It is something I would recommend on the back of the O'Donoghue recommendation and on the back of my experience both as a lawyer and as the chairperson of the commission.

I have engaged with the Department of Finance and the Irish Tax Institute, ITI. It is in the survey that went out to the members of the institute. The institute was kind enough to send me a copy. For general settlements, mediation goes on continually between the parties but there is no legislation for us to facilitate or direct it.

Photo of Colm BurkeColm Burke (Cork North Central, Fine Gael)
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I am sorry if I am going over issues that may have been raised earlier. What level of legislation would be required? Has progress been made on that issue?

Ms Marie-Claire Maney:

Again, I could not speak to that as it would be for other parties. I understand that the institute has written to the Department of Finance on the basis of correspondence from the institute only last month with the results of its survey about mediation. Again, it would be for those parties to give information to the committee. That is all the information I have.

Photo of Colm BurkeColm Burke (Cork North Central, Fine Gael)
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Ms Maney would be anxious that legislation would be put in place to facilitate it. Is that fair to say?

Ms Marie-Claire Maney:

I tend not to use emotional words like "anxious". I have many more things to be anxious about but I certainly would be supportive of such legislation because I believe it would facilitate the citizens of Ireland, primarily, and organisations as well.

Photo of Colm BurkeColm Burke (Cork North Central, Fine Gael)
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Ms Maney believes it would assist in bringing many more cases to a conclusion at an earlier date. Is that the view?

Ms Marie-Claire Maney:

Yes, it has proven beneficial generally in litigation in this country in the commercial courts, as well as in other courts and in England and Wales where they have pioneered mediation for the most part. I believe it is a useful facility and it can only assist. It may not be suitable for every case but it can only assist. When we have as many tools in the tool-kit bag, it can only be good for the citizenry.

Photo of Colm BurkeColm Burke (Cork North Central, Fine Gael)
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I wish to raise two other issues. One relates to the Criminal Assets Bureau arranging for a tax assessment to be made. Where that has occurred, are there appeals pending? What is the value of those appeals?

Ms Marie-Claire Maney:

I have had two meetings with the Criminal Assets Bureau. The bureau representatives asked me to look at their appeals in the system. We have heard almost all those appeals or certainly moved them on as far as the parties can move them on. Mr. O'Keeffe can correct me on the details but at the last count, there were 46 appeals. I am unsure of the current position.

There has been huge engagement with the Criminal Assets Bureau. At my most recent engagement with people working in the Criminal Assets Bureau, they informed me that there has been a very good unintended consequence of us moving the cases through the system in that the parties are much more willing to engage with them and settle quicker because the cases are going through at a faster pace with their sales. They are a particular category of cases-----

Photo of Colm BurkeColm Burke (Cork North Central, Fine Gael)
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How much money is involved across all cases over a 12-month period?

Ms Marie-Claire Maney:

I do not have that in terms of the Criminal Assets Bureau cases in particular, but we can certainly send the Deputy that. I will ask my colleague Mr. O'Keeffe to take a note. I start to lose my sense of numbers when dealing with €1.6 billion at one end. Criminal Assets Bureau cases do not tend to be that; they tend to be up to €1 million. In the 50-odd cases, it is probably in the ballpark of €10 million to €20 million. It is not of the quantum of the corporations-----

Photo of Colm BurkeColm Burke (Cork North Central, Fine Gael)
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It is still a substantial amount of money.

Ms Marie-Claire Maney:

Yes, it is. We have a project that I brought in as soon as I came in through the door on 1 July. One person who works on Criminal Assets Bureau cases has eyeballed every one of those cases. Each one has either been heard, is contacted or is through the system as far as it can be. Those cases are particularly looked at because of particular issues because of flight risk or whatever and the particular engagement I have had personally with the Criminal Assets Bureau. I can say hand on heart those cases are very much monitored. We will get those statistics for the Deputy.

Photo of Colm BurkeColm Burke (Cork North Central, Fine Gael)
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I would appreciate that. Because of the Covid pandemic and businesses running into difficulties, I imagine appeals are pending. Will the collection of money now be at risk in some cases because of the changes that have occurred as a result of the pandemic? For instance, the company may have an appeal pending and the circumstances have totally changed because of the pandemic. Is there any estimate of how adversely this will affect the recovery in outstanding cases?

Ms Marie-Claire Maney:

Not by ourselves. That would be completely outside our remit and we would have no facility to even assess that. That really would be a matter for Revenue and the chairman of Revenue. It would be entirely incorrect if we started to even consider such matters because it might start to influence how we schedule cases and we have to be completely independent in terms of how we do that. I am not trying to be evasive, but the business and financial circumstances of those organisations, companies and individuals no doubt are entirely outside my remit.

Photo of Colm BurkeColm Burke (Cork North Central, Fine Gael)
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On the recovery of moneys, I know that the job of the Tax Appeals Commission is to decide after an appeal has been lodged. Does Ms Maney have any figures percentage wise on what is physically recovered once the Tax Appeals Commission has made a decision? Is that ever fed back to the Tax Appeals Commission or is that matter entirely for the Revenue?

Ms Marie-Claire Maney:

That is a matter for the Revenue. The Comptroller and Auditor General's Chapter 14 report referred to the Revenue recovery. Revenue gave an undertaking to look at its recovery rates. In general, we do not get involved in that at all. The Comptroller and Auditor General did a sample of 100 cases and the level of recovery is outlined in his report.

This might be of interest to the Deputy. We have done a sample of the percentage of who wins cases. In 2021 the appellant won in 28% of cases and the respondent in 72%, which is obviously Revenue. In 2020 the percentage for the appellant was actually very similar at 27% and Revenue won 68%. There was a split in terms of 5%. So, it is about 70-30 in favour of Revenue when it comes to winning the cases. It would be for it to explain the recovery rates in the cases it has won. That is completely outside my remit, however. The Comptroller and Auditor General mentioned the recovery in terms of the sample. It is just not to hand at the moment. Perhaps Mr McCarthy could assist if that is needed. It did a sample of 100 cases and I think there was quite a high recovery rate.

Mr. Seamus McCarthy:

I will just jump in and give those figures. It is listed at paragraph 14.28. We looked at 100 cases determined or settled in the period from 2016 to 2019. At the end of May 2020, more than 90% of the final agreed liability in those cases had been collected. Less than 1% had been written down by Revenue and 9% remained outstanding. Revenue would probably be able to give a further update as to whether that 9% has been collected.

Photo of Colm BurkeColm Burke (Cork North Central, Fine Gael)
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Have there been further appeals of determinations by the Tax Appeals Commission? I am not sure if the process of judicial review is available. Are any such cases pending where the commission has already made a determination?

Ms Marie-Claire Maney:

I am sorry. I just do not understand the question.

Photo of Colm BurkeColm Burke (Cork North Central, Fine Gael)
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For instance, I have been involved in court cases where the Circuit Court judge's decisions are judicially reviewed to the High Court. Has this occurred on the determinations that the Tax Appeals Commission has made at any stage?

Ms Marie-Claire Maney:

Yes, a number of our determinations then go to the High Court on a case-stated basis.

Photo of Colm BurkeColm Burke (Cork North Central, Fine Gael)
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How many such cases are currently pending?

Ms Marie-Claire Maney:

I will ask my colleague to hand me those details. I am sorry but we have a lot of statistics. Of the 468 determinations, 63 cases went to the High Court. The percentage has stayed very similar each year. It is 13%.

Photo of Colm BurkeColm Burke (Cork North Central, Fine Gael)
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Do we have any indication of the current value of those appeals to the High Court as a percentage?

Ms Marie-Claire Maney:

No. I do not have that statistic but we can certainly provide it. As the Deputy will appreciate, those 63 that have gone to the High Court tend to be the higher-value cases. One of the cases that I determined at €587 million has gone to the High Court and a judicial review at the same time. It would be a high percentage of the quantum. It is 13% in terms of the total number of determinations, but I suspect it would be much higher in terms of the quantum of the determinations, but that is to be expected. At that monetary value, we would have an expectation that they would be appealed to the High Court. However, we have a very good success rate in the High Court of our determinations.

Photo of Colm BurkeColm Burke (Cork North Central, Fine Gael)
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How long is it taking for those appeals to be dealt with in the High Court? It will obviously have changed because of the Covid pandemic. On average, up to-----

Ms Marie-Claire Maney:

It can be several years and then from the High Court it can go to the Court of Appeal and Supreme Court. It can take many years. I have enough of my own issues in terms of timeliness.

Photo of Colm BurkeColm Burke (Cork North Central, Fine Gael)
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I accept that.

Ms Marie-Claire Maney:

It is of concern and in the case I dealt with personally, I wrote to the parties who were appealing to ask to get the case expedited in the High Court because of the jurisdictional issue and the effect it could have on the Tax Appeals Commission. I was proactive in that case and they both went to the High Court to get their hearing expedited. I am pleased to say the High Court listened to them. The case is listed for October and will take place over six days. We take an active interest in the cases even when they leave us if there is an effect on our case base and in that particular case there was. Delays in the system are a big cause of concern for everybody, including me.

Photo of Brian StanleyBrian Stanley (Laois-Offaly, Sinn Fein)
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Any Deputies who wish to come in for a second round of questions, should use their hand signal and we will try to accommodate everyone.

Ms Maney is very welcome and I thank her for the information she has supplied. I listened to the details she outlined. It was on 4 August that she got into the office and started to get things moving. Obviously, it has been a difficult year.

Spending money is easy. Trying to gather the money that is owed is hard, but trying to reach an agreement with somebody or reach a figure for what is owed can be even more difficult, so it can be a challenging job. With regard to some of the information Ms Maney supplied, the top ten largest appeals are in respect of corporation tax. That is interesting. Could she expand a little on that? As regards the top 20, according to the figures given in the brief the value of that unsettled tax is €3 billion. What really stands out is that the top five is €2.8 billion. Perhaps she could tell us if that €2.8 billion would be owed mainly by multinational companies or Irish-based, Irish-registered companies.

Ms Marie-Claire Maney:

It is fair to say, because there has been a great deal of publicity and those companies have obviously gone to the press themselves, those five appellants that are in the top ten are all multinationals.

Photo of Brian StanleyBrian Stanley (Laois-Offaly, Sinn Fein)
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Okay. We have a low corporation tax at 12.5% compared to other countries, and I agree with that. To put it bluntly, it drives the public up the walls, and particularly PAYE workers, that the money is gone before one gets to see it. One does not get to see it except on the payslip at the end of the month. There is strong consensus politically on the 12.5%, but the 12.5%, as we know from other pieces of information that emerge from time to time, is hard to collect and determine. Is it the case that there is a culture or that some of the multinationals feel that they can play a little here? We provide the 12.5% and that is very welcome and proper, even though it is under scrutiny now by the OECD. Is it the case that some of the multinationals feel that they have, basically, a soft touch in Ireland?

Ms Marie-Claire Maney:

Chairman, you can appreciate that I can make absolutely no comment on that. Every appellant has the right to appeal. I make no judgment on any appellant, be it large or small. The appellants are entitled to exercise their right to appeal, whatever the quantum. That is what these organisations are doing. They are treated well by ourselves, as are the individuals. I mentioned that I have heard cases up to €600 million and cases over €600. Each of those appellants is treated absolutely the same. We have the same independent mind. The numbers to me are just the numbers. The policy issues are for politicians. I am an independent judge and I have to judge each of those appeals independently. It is really important that I do not make any judgments or wording on policy issues. You can appreciate why.

Photo of Brian StanleyBrian Stanley (Laois-Offaly, Sinn Fein)
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The quantum outstanding at present in unsettled cases is €4.2 billion. Is that correct?

Ms Marie-Claire Maney:

That is correct.

Photo of Brian StanleyBrian Stanley (Laois-Offaly, Sinn Fein)
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The top five are multinational companies. I thank you for confirming that. They are heading for almost €3 billion, at €2.8 billion plus, in terms of what they owe. Out of all the cases being appealed, there are five companies out of the thousands that pay corporation tax - five multinational companies - that account for almost three quarters of the total sum. It is an incredible figure. Would you agree with that? It is a stand-out figure by any account.

Ms Marie-Claire Maney:

Again, the number is the number. Those assessments were raised by the Revenue Commissioners. It is an indication of the tax base that pertains in the State. In many ways, that is a success story for Ireland in terms of inward investment. However, the numbers are the numbers and I could not make any judgment of what they represent, but they represent a very significant proportion of the overall quantum under appeal.

Photo of Brian StanleyBrian Stanley (Laois-Offaly, Sinn Fein)
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It presents a substantial challenge for the commission.

Ms Marie-Claire Maney:

It does. It is a substantial challenge in terms of the complexity of the cases, the length they take to hear, the parallel proceedings that the other Deputy and I have referred to and the length of time it takes even for the parties to get ready. Yes, they are a substantial challenge. Currently, the resourcing we have would not facilitate the speedy resolution of that large quantum of appeal.

Photo of Brian StanleyBrian Stanley (Laois-Offaly, Sinn Fein)
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With regard to the largest case of €1.64 billion, the company sought to have the determination overturned in the court. That was unsuccessful. The CEO of that company, speaking recently, said that he believed the figure "was not even real any more". I know the witness has to be careful here. He went on to say that it should be zero. It would indicate that the State, the Revenue Commissioners and the Tax Appeals Commission have a challenge with some of these large cases. Is it correct to say that the commission finds some of these cases particularly challenging and onerous?

Ms Marie-Claire Maney:

They are challenging in terms of the complexity, the volume, the length of time they take to hear and the length of time to determine and write up. They are not the same as dealing with a very small case, obviously. They are a challenge. Certainly, even the O'Donoghue report that reviewed the commission in 2019 did not envisage this type of appeal and the quantum and complexity under appeal. We are now dealing with cases as complex as those of the commercial courts and often they are running in parallel with the commercial courts. Nobody in the State should be under any illusion about how much of a challenge this top cadre of cases causes in terms of resourcing, dealing with them and the manpower needed. Even for the organisations, the Revenue Commissioners and that party needed 11 months to prepare for the tax appeal themselves. The date in November that we gave was from them. We have listed it for a full month just to hear the case, not to determine it. That is a full one twelfth of my year on one case. That is the soonest the parties could be prepared for hearing that case. It is a huge resource from the Revenue Commissioners, a huge resource from the party and a huge resource from us. Other than that, I cannot stray into making any comment on the case.

Photo of Brian StanleyBrian Stanley (Laois-Offaly, Sinn Fein)
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I thank you for those answers. The commission certainly has been making progress, and I compliment Ms Maney and the staff on that. They do a very important job. There is a longer period of time for the determination of the larger cases. Ms Maney outlined that there is a grading system for over €1 million, over €10 million and so forth. Is it the case that some of the very large ones are put way back? For example, what type of timescale is there for cases that would be over €500 million, €1 billion or €1.5 billion?

Ms Marie-Claire Maney:

The challenge is to cover the entire case base. I am very aware that there is great political interest in the top ten, so the Committee of Public Accounts has asked for the top ten. However, there are the bottom ten. My challenge is to ensure that the individual of less than €500 gets the same treatment and gets through the system the same as some organisation at €1.6 billion which is taking a lot of resources.

That is the challenge and that is why I have suggested a different structure that is tiered with a cadre to deal with smaller cases, a middle tier and one for the very large cases. I am concerned that these large cases will just eat up resources. That is where the political pressure is and that is what people are interested in but I am interested in the whole case base. I have to be fair to absolutely everybody. We are trying our best to get these cases through the system in order that we reduce the quantum under appeal but that has a cost. It has a cost to people perhaps at the lower end who have a smaller appeal. That is what I am trying to cover. That is the challenge and it is very difficult. I make no bones about it. The Chair is absolutely right. He has hit the nail on the head.

Photo of Brian StanleyBrian Stanley (Laois-Offaly, Sinn Fein)
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The O'Donoghue report set out the staffing requirements. Since 2019, the number of staff doubled, albeit from a very low base. Ms Maney outlined that she has 33 staff. She gave some figures at the beginning and I apologise for bringing her back over this again but I want to be clear on it. There are four commissioners.

Ms Marie-Claire Maney:

Yes, there are four and half.

Photo of Brian StanleyBrian Stanley (Laois-Offaly, Sinn Fein)
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There are 4.5 whole-time equivalents and there are 33 staff who are mainly administration.

Ms Marie-Claire Maney:

No, we have 28 administrative staff. The 33.5 is the full complement including myself.

Photo of Brian StanleyBrian Stanley (Laois-Offaly, Sinn Fein)
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How many staff in the Tax Appeals Commission have legal training?

Ms Marie-Claire Maney:

I am looking at section 9 of my booklet. In respect of tax related qualifications, three members of the Irish Tax Institute, one accountant, one diploma and six diplomas in tax policy. That is the administrative staff. Among the commissioners, I am legally trained, we have two barristers, a solicitor and another barrister. Consequently, of the 4.5, four have legal qualifications.

Photo of Brian StanleyBrian Stanley (Laois-Offaly, Sinn Fein)
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Ms Maney said earlier that she needs ten or 12 commissioners.

Ms Marie-Claire Maney:

Yes, that would be my hope.

Photo of Brian StanleyBrian Stanley (Laois-Offaly, Sinn Fein)
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I turn to the types of cases and companies which may have wrongly classified workers for PRSI contributions, that is, where they were classed as having an S contribution as self-employed when they should have been classified as PAYE when Revenue and the Tax Appeals Commission make a judgment on these. How many companies are involved in such cases? Many of the cases related to corporation tax or capital gains tax etc. These have tax and PRSI implications. Is there a figure or percentage available?

Ms Marie-Claire Maney:

I do not but just this week we issued a determination about an establishment which had staff who it treated as being self-employed and we have determined that they were actually employees of the establishment. That went out recently. There was a case that was confirmed in the High Court on the employed status of those who work in the industry delivering fast food. Our determination was upheld that those people were also employees. Off the top of my head, there is not a huge number of cases about employment status but I will get those data to the Chairman.

Photo of Brian StanleyBrian Stanley (Laois-Offaly, Sinn Fein)
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Ms Maney should send a note to the committee please on the number of companies where there are cases of unsettled tax where it relates to the misclassification of PRSI in those cases, as well as the quantum of that.

Ms Marie-Claire Maney:

We will get that to the committee.

Photo of Brian StanleyBrian Stanley (Laois-Offaly, Sinn Fein)
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Would it be more than 5% of the commission's work, for example?

Ms Marie-Claire Maney:

I would be very surprised if it was more than 5%.

Photo of Brian StanleyBrian Stanley (Laois-Offaly, Sinn Fein)
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Therefore it is possibly less than 5%.

Ms Marie-Claire Maney:

It has not actually come on my radar as a trend. It would be low numbers.

Photo of Brian StanleyBrian Stanley (Laois-Offaly, Sinn Fein)
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Did I hear correctly that the commission made a judgment that these workers in that recent case were actually employees, not self-employed?

Ms Marie-Claire Maney:

Yes, in that particular case. We do get those cases but that is the only case that springs to mind in recent times, apart from the one that was in the High Court about those who make deliveries of fast food. Our determination that they were employees was upheld.

Photo of Brian StanleyBrian Stanley (Laois-Offaly, Sinn Fein)
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There was one case where the commission ruled in 2018 that a company owed €215,000. While I do not expect Ms Maney to have knowledge of that, as she has been in office for less than a year, does she have knowledge of the nature of that case?

Ms Marie-Claire Maney:

I do not, off the top of my head. I think I do know but it would be foolish of me to speculate without having the case in front of me and I would not want to do that, as it is on record.

Photo of Brian StanleyBrian Stanley (Laois-Offaly, Sinn Fein)
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There is a current case stemming from 2019 where the commission ruled against a company and found that it owed Revenue for unpaid PRSI. As this case is going to the High Court, Ms Maney needs to be careful, as do I. What is the figure in that case? It is also a fast food supplier.

Ms Marie-Claire Maney:

Again, I do not have that to hand. I did not bring information on individual cases but we can get that to the committee.

Photo of Brian StanleyBrian Stanley (Laois-Offaly, Sinn Fein)
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As a ruling has been made on it, I can say the name of the company, which is Domino's Pizza. I understand that case is going to the High Court. I do not want Ms Maney to comment on the validity of the case or its merit.

Ms Marie-Claire Maney:

If it is the same case, I think that has already been to the High Court and it confirmed our determination. For completeness, I will check that out.

Photo of Brian StanleyBrian Stanley (Laois-Offaly, Sinn Fein)
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Ms Maney has no knowledge of the figure?

Ms Marie-Claire Maney:

No, I do not have it to hand. I am sorry but we will get back to the Chairman on that.

Photo of Brian StanleyBrian Stanley (Laois-Offaly, Sinn Fein)
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I have some questions on Covid. On the percentage of cases won by appellants and how many are upheld by the commission, I think Ms Maney said it was 70:30 in favour of Revenue or slightly over that.

Ms Marie-Claire Maney:

Yes.

Photo of Brian StanleyBrian Stanley (Laois-Offaly, Sinn Fein)
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I think some members have more questions.

Photo of Cormac DevlinCormac Devlin (Dún Laoghaire, Fianna Fail)
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First, I want to give apologies from Deputies MacSharry and McAuliffe, please. I must also go to another committee meeting after this.

I wish to return to a few items. Out of the legacy cases that have been outstanding for some time, am I correct that 12 are still outstanding?

Ms Marie-Claire Maney:

There are 12 outstanding determinations. They are cases that have been heard but not determined. It is chapter 14 in the Comptroller and Auditor General report. That is 12 out of the 57. We have got through the rest. We hope to issue another three or four in July. I think there were 13 on the list in my briefing but this week we issued another, which brought it down to 12.

Photo of Cormac DevlinCormac Devlin (Dún Laoghaire, Fianna Fail)
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The commission is making progress and, as Ms Maney says, by the end of the year it should be complete.

Ms Marie-Claire Maney:

Yes.

Photo of Cormac DevlinCormac Devlin (Dún Laoghaire, Fianna Fail)
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I was a bit confused by chapter 14 of the Comptroller and Auditor General's report which said that at the end of 2019 there were 3,357 open appeal cases. It said that in the period of 2016 to 2019, the commission closed over 3,900 appeal cases.

How many cases since 2016, when the commission was established, has it dealt with overall? Does Ms Maney have that figure?

Ms Marie-Claire Maney:

Yes, I do. We have received 9,073 appeals that were either transferred or we have come into since 2016. We have closed 7,375 appeals. We are down to 2,900 appeals of worth. The closures are worth €2.7 billion. The Deputy can do the maths. The current figure is 2,874. Many thousands of cases have been dealt with and closed. We all get confused with the figures. I get confused, so I do not know how on earth-----

Photo of Cormac DevlinCormac Devlin (Dún Laoghaire, Fianna Fail)
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I wanted to clarify that. I missed the earlier discussion. I refer to the length of time between an appellant deciding to take a case and the case being heard by the commission. What is the average waiting time for that process?

Ms Marie-Claire Maney:

We have carried out our own statistical analysis of that. We have updated Chapter 14 of the Comptroller and Auditor General's report, which contained an analysis of that. On reviewing all appeals that have been closed since 2016, we can state the average time is 15 months. Obviously, those cases that we have spoken about put the average out of kilter, if that does not sound mathematically incorrect. Those cases that are consolidated and are on hold, like the case we have spoken about involving €1.6 billion which was on hold for several years, will put the figures out of kilter.

Photo of Cormac DevlinCormac Devlin (Dún Laoghaire, Fianna Fail)
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What is the internal desire to deal with cases?

Ms Marie-Claire Maney:

Desire and reality are two different things. If I had more commissioners the desire would be to complete the process within nine months to year. That is probably realistic in terms of the process. It takes time for people to get their case bundles together and to engage barristers. The Deputy is now getting an understanding of the process. A case that is worth less than €1,000 should be in and out fairly quickly and should take three to six months. In cases involving sums of €1 billion to €6 billion, it took those involved 11 months just to prepare for the hearing. It is apples and pears. There is a huge spectrum. On average, I would like things to be in and out within an year. That is the desire. As I say, the reality is somewhat different.

Photo of Cormac DevlinCormac Devlin (Dún Laoghaire, Fianna Fail)
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Am I not correct in saying that for appellants there are interests and penalties charged? In theory, they are paying for that delay or the length of time it takes. If the appeal is found in the appellant's favour, it is unfair if he or she has to pay penalties because of a delay.

Ms Marie-Claire Maney:

My understanding is that a stop is put on tax once an appeal is lodged. Interest runs if people do not pay the tax. If they pay the tax upfront, there is no interest. My understanding is that there are no penalties. Again, Revenue can confirm that as it is a revenue issue. It is a statutory issue that has been set down by the Oireachtas. That is outside of my control.

Photo of Cormac DevlinCormac Devlin (Dún Laoghaire, Fianna Fail)
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I can appreciate that. The UK system is further down the road than us and has far more experience. I am speaking for individuals and not the corporate world. People who might not have the wherewithal to be able to pay money until a determination has been made are lumbered with further penalties and interest on the sum that Revenue makes. That is a recommendation that the committee will look at.

Ms Maney will come back to me on a previous question I asked. She might also inform us how many cases have prepaid and how many have not paid at all and, therefore, would have been subject to penalties. That is of interest to the committee.

Ms Marie-Claire Maney:

We would not have that information. It is not part of our data collection. Revenue would have that information. I would not have the resources to liaise with Revenue and match up the cases. It would be incorrect to try to use the very small resources we have to do that. I ask the Deputy to refer that to Revenue. That would be a fair assessment.

Photo of Cormac DevlinCormac Devlin (Dún Laoghaire, Fianna Fail)
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We can take that up with Revenue. On the IT system and the 2019 accounts, I note there is an underspend of €259,000. Ms Maney said a new IT system is coming in. In terms of the data that the commission received from Revenue, are the systems compatible with each other?

Ms Marie-Claire Maney:

No, currently they are not. That is one of the reasons it has been included in the new specifications for the new case management system we are trying to procure. We have a representative from Revenue on our project group to ensure those systems will be compatible. That will be in the tender and is an important piece of the kit. The Deputy's point is well made. That is what the dream is.

Photo of Cormac DevlinCormac Devlin (Dún Laoghaire, Fianna Fail)
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That is good to know. In her opening remarks, Ms Maney mentioned recommendations. I was unsure if she was speaking solely about the recommendations from the report of the Comptroller and Auditor General that were all being worked through, or whether she was also referring to recommendations from the last time the Tax Appeals Commission appeared before the Committee of Public Accounts in 2018. I understand there were three recommendations from that time. Can Ms Maney confirm to the committee whether all of the recommendations in the Comptroller and Auditor General's report and the previous committee report will be implemented by the end of the year?

Ms Marie-Claire Maney:

All of the Comptroller and Auditor General's recommendations have been implemented. All of the O'Donoghue recommendations have been implemented. Can the Deputy remind me what the committee's recommendations were? I can confirm today whether they have been implemented.

Photo of Brian StanleyBrian Stanley (Laois-Offaly, Sinn Fein)
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Outline them briefly.

Photo of Cormac DevlinCormac Devlin (Dún Laoghaire, Fianna Fail)
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Some of them may form the discussions the commission had with the Department of Finance because some were outside of the commission's control but were recommendations from our committee. Ms Maney can come back to me on that. I do not have the recommendations to hand.

Ms Marie-Claire Maney:

As I said in my opening remarks, everything in the Comptroller and Auditor General report, including the three recommendations regarding ourselves, has been completed. The 21 recommendations in the O'Donoghue report have been completed. I will check the committee's recommendations, which I understand were an overlap with the other two sets of recommendations. I will confirm in writing whether they have been completed.

Photo of Cormac DevlinCormac Devlin (Dún Laoghaire, Fianna Fail)
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I thank Ms Maney.

Photo of Verona MurphyVerona Murphy (Wexford, Independent)
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I thank Ms Maney and her staff. I am a new member of the committee, but I must emphasise that in my time on this committee I have never seen such comprehensive coverage by any Department. I commend Ms Maney on that. We have rarely, if ever, seen all of the Comptroller and Auditor General's recommendations brought on board within such a short space of time, in this case a year. Sometimes there is no regard for them whatsoever. I am impressed. It deserves and needs to be said. We are often very critical. If all Departments were managed in a similar fashion, our job would be very simple and would not take half as long. I commend Ms Maney and her staff on that. I have not heard from Mr. O'Keeffe.

There are some points of interest about which I would like to ask. When a case is not accepted for appeal, has there been any analysis of the main reasons for that decision being made? Is there a judicial review of a decision or is there a High Court process?

Ms Marie-Claire Maney:

When the Deputy asks about when cases are not accepted, does she mean that the appellant has been unsuccessful on appeal? Is that what she means?

Photo of Verona MurphyVerona Murphy (Wexford, Independent)
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No.

Maybe I am misunderstanding it.

Ms Marie-Claire Maney:

Does the Deputy mean cases that we will not even accept?

Photo of Verona MurphyVerona Murphy (Wexford, Independent)
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Yes.

Ms Marie-Claire Maney:

There are very few. Perhaps Mr. O'Keeffe could find the statistics for me in the huge pack of documentation that I have with me. Very few cases are not accepted. Perhaps Mr. O'Keeffe could find that statistic for me or point me to it.

Mostly, such appeals are on matters that are outside our statutory remit. The Deputy mentioned judicial review. She asked a very good question, and one that has perplexed many of us. Those appeals tend to be on matters such as how the appellant was treated or dealt with by Revenue. That is not for us to deal with. We only deal with the monetary side and the tax assessment. Cases that tend to relate to potential issues around legitimate expectation and constitutional rights are for the courts to deal with. If the Deputy bears with me, I will find the statistics in my documentation. We might be talking about less than 1%-----

Photo of Verona MurphyVerona Murphy (Wexford, Independent)
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I am not really looking for the statistics. Rather than seeing anybody being disenfranchised and having to go down the road of judicial review, I am trying to establish and understand whether there should be a briefing on what constitutes the commission's decision not to accept an appeal. If the case is not accepted because it concerns how someone has been treated and is not monetary in nature, that provides me with the perfect understanding.

Photo of Brian StanleyBrian Stanley (Laois-Offaly, Sinn Fein)
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I am going to bring in the Comptroller and Auditor General.

Ms Marie-Claire Maney:

We write to the appellant and explain why we are not accepting the case. We explain where they need to take their case. We take great care and do not dismiss people without a care or thought.

Photo of Verona MurphyVerona Murphy (Wexford, Independent)
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I appreciate that.

Ms Marie-Claire Maney:

I thank the Deputy for her comments; they are very much appreciated.

Mr. Seamus McCarthy:

Just to provide some helpful figures, figure 14.5 in the report gives a breakdown of the 3,918 cases that were closed between the establishment of the commission and December 2019. We report that 14% of the cases closed were refused and 8% were dismissed. They are significant proportions. That is how 22%, or nearly a quarter, of cases ended as far as the commission was concerned. I do not have anything further in the chapter in relation to the reasons for that. I understand that these figures were given to us by the commission. I confirm that is the information we have received.

Ms Marie-Claire Maney:

The dismissals can actually occur in cases where people have not engaged with the commission. There can be many reasons for the dismissal. There can also be settlements in some cases. Dismissal is a wide-ranging category. It tends to occur where people will not engage with the commission and do not turn up for hearings. There are many reasons for the dismissal of cases. There is a statutory framework for dismissals. I am satisfied that they are always conducted correctly.

Mr. Seamus McCarthy:

Could Ms Maney outline the distinction between cases that are refused?

Ms Marie-Claire Maney:

There tends to be a multitude of reasons for the refusal to take a case. Some cases are outside the time limit - perhaps years outside it. A smaller percentage of cases are brought to the wrong forum, which is what I think the Deputy was referring to. However, in terms of the refusal to take cases, sometimes people appeal points that cannot be appealed. The point may not be appealable. Sometimes the appellant approaches the wrong forum. Sometimes they are out of time. Refusal is a wide category. We put details on the website of what is appealable. That has assisted appellants.

I wish to make clear that dismissals are not in the category that the Deputy referred to. Even the refusals cover a wide range of reasons, including appellants being out of time, raising points that are not appealable at all in any forum, and raising issues that are not within our remit.

Mr. Seamus McCarthy:

Of course, yes.

Photo of Brian StanleyBrian Stanley (Laois-Offaly, Sinn Fein)
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I do not see any other members indicating. I have a fairly straightforward question for Ms Maney. I am curious about the issue of commissioners. As Ms Maney has outlined, there are four commissioners. If I heard her correctly, she said that she could do with having 12 commissioners. The commission is doing important work and is making good progress with it, but it is obviously being hampered by the staff shortage. In terms of our work as the Committee for Public Accounts and our view coming out of this meeting and what can be done to assist the commission with this, what is the process in terms of the commission trying to get the extra staff? Who does Ms Maney have to approach? Does she have to approach the Department for Public Expenditure and Reform? I ask her to outline the process briefly.

Ms Marie-Claire Maney:

The first six months of my tenure were rather busy. In January, I studied all the statistics and submitted a business case to the Department of Finance, detailing five years of statistical analysis and seeking more commissioners and the introduction of a different tiered status in respect of the commissioners. That proposal was submitted to the Department. I am pleased to inform the committee that I recently received confirmation that the Department of Finance has sanctioned the business case. It is now with the Department of Public Expenditure and Reform for consideration. Once that is dealt with, hopefully recruitment can commence. It has been positive. I wish to commend the Department of Finance on its support for the commission, and in particular, Ms Deirdre Donaghy, who is the liaison officer and has worked exceptionally well with me. I also wish to thank the Minister, whose door has always been open to me.

That is the process. I hope that we will have the support of the committee after today. We have worked hard. I have personally worked exceptionally hard in the last year to make the progress required. I hope that the State will support us in trying to recruit more commissioners at different grades. I appreciate the Chair asking the question.

Photo of Brian StanleyBrian Stanley (Laois-Offaly, Sinn Fein)
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Apologies for rushing Ms Maney, but we are short on time. As I understand it, the commission has applied to the Department of Finance, which has approved the request to recruit eight additional commissioners.

Ms Marie-Claire Maney:

To clarify, the Department has not approved a specific number.

Photo of Brian StanleyBrian Stanley (Laois-Offaly, Sinn Fein)
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Ms Maney believes that the commission needs eight additional commissioners. I accept that. Earlier, Ms Maney mentioned a tiered system. I take that to mean that commissioners with varying degrees of experience will be at different levels and on different salaries.

Ms Marie-Claire Maney:

Yes.

Photo of Brian StanleyBrian Stanley (Laois-Offaly, Sinn Fein)
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Obviously, the commission will want very experienced people with legal and accountancy training to work on the more high-value cases. However, in respect of cases that are valued at under €5,000 or €1,000, perhaps even some of us could work on such cases. How much would it cost, roughly, to recruit eight additional commissioners?

Ms Marie-Claire Maney:

It is not a huge amount. That is probably the one piece of paper I did not bring with me to the meeting. As we are going to change the grading, we believe the replacement of the commissioners at the grading we have with an extra four would be cost-neutral. To recruit an extra two commissioners at the lower end of the salary scale would cost around €160,000. All in, I believe the extra costing was estimated to be €500,000, or something of that magnitude. When we have €4.2 billion worth of cases under appeal, the proposal seemed quite cost-effective in terms of restructuring and reducing the salary grades.

Photo of Brian StanleyBrian Stanley (Laois-Offaly, Sinn Fein)
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I wish to probe that figure of €4.2 billion further. That is the figure that is in my mind. That needs to be sorted out.

In relation to the recruitment of the eight additional commissioners, Ms Maney mentioned that the recruitment of two commissioners at the lower end who would deal with smaller cases would cost €160,000 per annum, or €80,000 per commissioner. How much would the recruitment of the eight additional commissioners cost, roughly? I just want a ballpark figure. I do not expect Ms Maney to be able to give me an exact figure off the top of her head. It is not her job to determine what commissioners are paid. She has some idea of the grading and salary structures. What are we talking about? Are we talking about €1 million per year?

Ms Marie-Claire Maney:

Yes, about that.

Photo of Brian StanleyBrian Stanley (Laois-Offaly, Sinn Fein)
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Less than €1 million?

Ms Marie-Claire Maney:

Yes.

Photo of Brian StanleyBrian Stanley (Laois-Offaly, Sinn Fein)
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The reason I am asking is that the committee has to produce a report on today's meeting, as one of the members mentioned earlier. I think it will be one of the better reports.

People can feel that witnesses sometimes get a hard time here, but Ms Maney has answered very detailed questions. One of our recommendations might involve making a strong case for extra staff for the commission in order to allow it to deal with the backlog and capture some of that €4.2 million. If it is less than €1 million per year and we are dealing with sums of €4,000 to €100 million, it is an open case.

Photo of Colm BurkeColm Burke (Cork North Central, Fine Gael)
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Regarding the point I raised about mediation, it was confirmed to us that there is a need for legislation. This should also be incorporated in what the report said, which was that we should bring forward the recommendation to the Department of Finance that the legislation should be in place so that these issues can be dealt with by way of mediation.

Photo of Brian StanleyBrian Stanley (Laois-Offaly, Sinn Fein)
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I thank the Deputy for making that very important point. I thank Ms Maney, Mr. O'Keeffe and their staff for the information provided. I thank the Comptroller and Auditor General and his staff for attending and assisting the committee. Is it agreed to request that the clerk seek any follow-up information and carry out any actions arising out of today's meeting? Agreed. Is it also agreed that we note and publish the opening statements provided for this meeting? Agreed.

The witnesses withdrew.

The committee adjourned at 11.31 a.m. until 9.30 a.m. on Tuesday, 13 July 2021.