Tom Sheahan (Kerry South, Fine Gael)
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Question 184: To ask the Minister for Finance if further to a previous request to have a matter (details supplied) rectified he will have it corrected promptly; and if he will make a statement on the matter. [38586/08]

Brian Lenihan Jnr (Dublin West, Fianna Fail)
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I have been informed by the Revenue Commissioners that a general right to repayment of tax overpaid is provided for by section 865, Taxes Consolidation Act 1997. That section also imposes a statutory 4 year time limit on claims for repayment made on or after 1st January 2005.

Under the provisions of section 865, a repayment is subject to a valid claim being made (such as the submission of a 'full and true' Return of Income), within 4 years from the end of the tax year to which it relates.

Section 865, and the Interest on Repayments provisions in section 865A, were designed to achieve the necessary balance between establishing a fair and uniform system for taxpayers (including parity of treatment between PAYE and self employed taxpayers), while, at the same time providing necessary protection for the Exchequer from exposure to claims going back many years.

The self-assessment system provides that taxpayers are obliged to make their tax returns by the specified return date. Income Tax returns for 2001, 2002 and 2003 had return filing dates of 31/10/2002, 31/10/2003 and 31/10/2004, respectively. Taxpayers were obliged to submit their Returns of Income, for the years listed, to the Offices of the Collector General on, or before, those dates.

In the case of the person mentioned Returns of Income for the years in question were filed in April 2008. For 2001 a paper return, dated 23/4/2008, was submitted to Tralee Revenue Office. For years 2002 and 2003 returns were filed via Revenue Online System (ROS) and are recorded as received on 25/4/2008. Those returns were processed and the resulting assessments showed tax overpaid for each year. However, as the 4 year time limit, for each of the years, had expired (on 31/12/2005, 31/12/2006 and 31/12/2007, respectively) the repayments could not be paid to this person.

Section 955, Taxes Consolidation Act 1997 is a separate piece of legislation, which also applies from 1st January 2005. This section places a 4 year time limit on the Inspector's right to make or amend an assessment. Under the provisions of section 955, no assessment or amendment to an assessment to Income Tax for any relevant tax year can be made any later than four years after the end of the tax year in which the taxpayer has filed a 'full and true' tax return.

That section ensures that a taxpayer cannot avoid payment of tax, correctly due to the Exchequer, by delaying the submission of his Returns of Income while also providing the taxpayer who files a 'full and true' return with the assurance that, apart from cases where fraud or neglect is suspected, the Inspector is precluded from making or amending assessments after the 4 year period set out in section 955 has expired.

Section 955(2)(a)(ii) repeats the time limit provisions contained in section 865 in relation to repayment of tax overpaid.