Sandra McLellan (Cork East, Sinn Fein)
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127. To ask the Minister for Finance if there is a time limit on how far back the Revenue Commissioners can go with investigations to claim unpaid tax; and if he will make a statement on the matter. [49435/14]

Michael Noonan (Limerick City, Fine Gael)
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I am informed by the Revenue Commissioners that, since 2005, Revenue officers are ordinarily limited to carrying out enquiries and making or amending assessments within a period of 4 years from the end of the year in which a taxpayer filed a correct tax return or a correct amended return.

However, that 4 year time limit does not apply, and Revenue can accordingly carry out an audit or investigation for any period, where:

1. A Revenue officer has reasonable grounds for believing that a return of income is incorrect due to its having been completed in a fraudulent or negligent manner,

2. A Return has not been filed,

3. A Revenue officer is not satisfied with the sufficiency of a return, having regard to any information  received in that regard,

4. A Revenue officer has reasonable grounds for believing that a return does not contain a full and true disclosure of all material facts, or

5. A case involves a tax avoidance transaction to which the provisions of section 811 or section 811C of the Taxes Consolidation Act 1997 apply.

A taxpayer who is aggrieved by any assessment made or amended by a Revenue officer outside the 4 year time limit has a right of appeal to the Appeal Commissioners.

The general 4 year time limit within which Revenue may ordinarily examine returns made by compliant taxpayers is matched by a 4 year time limit within which taxpayers may claim a repayment of tax.  This scheme of 4 year time limits was designed to achieve the necessary balance between establishing a fair and uniform system for compliant taxpayers, including equality of treatment between PAYE and self-employed taxpayers, while at the same time providing the necessary protection for the Exchequer both from exposure to repayment claims for historic periods and providing the Revenue Commissioners with the authority to pursue liabilities for these historic periods where a taxpayer had not filed a tax return, had filed an incorrect return or had engaged in tax avoidance transactions which could be challenged under the general anti-avoidance rule.