Minutes Of The Meeting Of The Taxation Administration Liaison confirmed case

							MINUTES OF THE MEETING OF THE TAXATION ADMINISTRATION
LIAISON COMMITTEE – “MAIN TALC” HELD ON TUESDAY 10TH
FEBRUARY 2004 AT THE YEATS SUITE, MONT CLARE HOTEL, DUBLIN.


1.     Attendance:                  Revenue
                                    Liam Irwin in the Chair
                                    Norman Gillanders
                                    Denis Graham
                                    Gerry Harrahill
                                    Muriel Hinch
                                    Sean Moriarty
                                    Eamonn O’Dea
                                    Claire Robson

                                    CCAB-I
                                    Marie Barr
                                    Enda Faughnan
                                    Gerald Murphy
                                    Brian Purcell

                                    Irish Taxation Institute
                                    Brian Keegan
                                    Ken McMoreland
                                    Margaret Sheridan
                                    Adrian Sherlock

                                    Law Society
                                    Pat Bradley
                                    Caroline Devlin

                      with          Michael Gladney Revenue (secretary)

Apologies:                          Mark Redmond, Frank Mullen and Liam Hennessy


Item Number 1:        Presentation to TALC by Sean Moriarty Assistant Secretary
                      Revenue Large Cases Division

Sean Moriarty from Revenue gave a presentation on the structure of Large Cases Division
focusing on operational policies and direction. He explained that the design of Large
Cases Division is based on international models which deal with all aspects of customers
tax affairs.
Large Cases Division’s customer base centres on the State’s largest companies, high
wealth individuals and the financial services industry. The Division’s direction is
focused on the following key criteria:
    Becoming more informed and developing new relationships with largest clients.
    Fostering compliance where possible through customer service.
    Profiling large companies and high worth individuals to map how they operate
       both globally and domestically.
    Ensuring large taxpayers are subject to some form of audit during the next five
       years.
    Capturing the essence of what constitutes good compliance and encouraging the
       larger clients to live by those rules and move away from the use of avoidance
       schemes.
    Supporting and standing by those who abide by the rules and developing a greater
       professionalism to counter non-compliance.
    Publishing a statement defining its role during 2004.

Large Cases Division are continuing to develop their expertise so that they can see issues
from both sides. Currently they are shaping their skills by:
    Ensuring high level training for auditors.
    Introducing five accountants to work full time with Large Cases Division with
       five more to follow.
    Introducing two sub divisions focusing on anti-avoidance measures.
    Developing an expertise to counteract VAT schemes.

Large Cases Division has commenced introductory talks with senior management of the
country’s largest companies. This is an exercise to introduce companies to Large Cases
Division and to their expectations rather than to draw in technical tax issues. It was not
intended to change in any way the critical Revenue/practitioner relationship.

Large Cases Division confirmed that the general Revenue policy in relation to the
charging of interest for VAT and PAYE applies also to large cases.

Large Cases Division also confirmed that the audit code of practice will be applied in line
with current practice.

Item Number 2:         Minutes From Previous Meetings

Minutes of the September 2003 and December 2003 meetings agreed, subject to minor
textual changes which will be co-ordinated via Mick Gladney by 20th February 2004.
Item Number 3:         Finance Bill 2004

Section 7
Practitioners observed that Section 7 is restrictive in relation to exemptions.
    Settlements outside court not covered by the Act.

Section 7 may force people into litigation which, in turn, may clog up Courts. Revenue
were aware of the issue involved.

Section 9
Practitioners welcome BIK related legislative changes and confirmed that Section 9, inter
alia, addresses arrangements with Revenue in relation to minor and irregular benefits.

Section 25
In relation to hotels under Section 25, practitioners queried as to whether any subsequent
alterations determined necessary by Local Authority Planners will be considered as a new
application or whether any such alterations would be deemed part of the original
application.
Revenue responded that cases would have to be considered on their merits by reference to
the particular facts in each case.

Section 32
Practitioners indicated that the amendments in Section 32 may not achieve intended
objective.
Revenue to re-examine

Section 35
In relation to lesser of short term assets practitioners queried the commencement
provisions for Section 35.
Revenue to re-examine in relation to date of election and revert to practitioners.

Section 84
Practitioners consider Section 84 in its current format may run into difficulties with local
law restrictions on Financial Institutions’ non-resident entities.
Revenue acknowledge practitioners concerns but have no intention of seeking
amendments to Section 84. Any such issues arising will be for the High Court to decide.
The Revenue Commissioners are commencing a comprehensive investigation of offshore
accounts and investments outside the State and have set a deadline of 29 March 2004 for
people to make a Voluntary Disclosure and obtain the benefits of mitigated penalties, non
publication on the tax defaulters list and non prosecution.
Item Number 4:         Money Laundering Reporting Procedures

Practitioners expressed concern about the impact of mandatory reporting on Voluntary
Disclosure. Revenue replied that the money laundering legislation is part of Criminal
Justice law and not Revenue law. Revenue feel that this question is more appropriate to
the Money Laundering Steering Group as it is not just a Revenue issue. However it was
acknowledged that there are administrative issues concerned with the interaction of these
new provisions with the voluntary disclosure provided for in the Revenue Audit Code of
Practice. It was agreed that this issue would be further explored at a future main TALC
meeting.
Revenue noted a concern that there should not be an excessive focus on money
laundering in the context of voluntary disclosures in relation to offshore accounts before
29th March.

Item Number 5:         Pay and File

ROS issues arising from November 2003.
Revenue acknowledged the problems practitioners encountered with ROS during the
2003 Pay and File peak period. Revenue confirmed that the problems related to:
    Shortcomings in hardware and software design.
    Insufficient stress testing. Testing was not adequate to ensure the system could
       cater for the large volumes of traffic encountered during the peak period.

Revenue confirmed that a detailed article in relation to the November 2003 problems will
be published in the next edition of Tax Briefing and also on the Revenue website.
Revenue have committed to ensuring that all issues will be resolved before the 2004
campaign.

Offsets of overpayments against Preliminary Tax
Practitioners made representations in relation to some Revenue Districts insisting on
written confirmation before credits can be offset to Preliminary Tax. Practitioners see this
as an unnecessary practice due to the automatic offset functionality within the Revenue IT
systems.
Revenue confirmed that there is no need for written instruction in such instances and will
ensure that all Districts are briefed to this effect.

Extension of filing date for 2003 Tax Returns
Practitioners requested that an extension of the filing date for the 2003 tax return be
considered.
They made the point that the successful uptake of ROS in 2003 was to a large extent
attributable to the incentive extension of the filing date. They made the point also that the
extended date made the computation of Capital Gains Tax liability for the period to 30th
September in the current year more manageable.
Revenue undertook to consider these representations and to make a decision as early as
possible.
Item Number 6:        Electronic Filing of DWT Tax Returns

Practitioners requested clarity in relation to current letters being issued to clients in
relation to DWT returns and payments. The wording of the letter suggests a compulsory
movement to ROS for DWT customers.
Revenue clarified that the wording on the issued letter was intended as a reminder to
companies that the legislation requires electronic filing from all companies with e-filing
capability, and was not a move to compulsory ROS filing for DWT.

Practitioners also raised the issue in relation to proposed modification on the form of
attestation in line with new SEC rules. This issue was first raised by the practitioners in
June 2003 and was subsequently replied to by Revenue in January 2004. The
practitioners feel that the modifications proposed by Revenue in January will not advance
the process.
Revenue have agreed to investigate the issue and revert in due course.

Item Number 7:        P35 Related Issues

Extension of P35 filing date
Practitioners requested an extension to the P35 filing date for 2004 due to the learning
curve in relation to BIK.
Revenue explained that there are timing constraints on P35 due to the urgency of
capturing employee data for tax and Social Welfare purposes and that it would not be
possible to extend the P35 filing date. The extension in 2001 was a once off concession in
the context of the transition to the new calendar tax year.

Item Number 8:        Administrative Issues

Problems for practitioners arising from the re-organisation of Revenue Tax Districts
Practitioners are experiencing difficulties making contact with relevant Revenue officials
when querying / dealing with specific cases. They said that it is extremely difficult to
contact any Revenue office by telephone and when they do are often told that files cannot
be found.
Revenue acknowledged that there are some post re-structuring transitional difficulties. In
relation to telephone contact Revenue are in the short term making extra resources
available and are also looking to implement a new long term approach that should
improve service.

Assignment of Non-Resident clients to specific Revenue Regions
Practitioners queried criteria used for assignment of non-resident clients to specific
Revenue Regions within the post re-structuring environment.
Revenue confirmed that non-resident cases will normally be assigned to the Region where
the non-resident has economic activity.
Delays and errors in the issue of assessments and amended assessments
Practitioners are experiencing delays in receiving assessments from certain areas. In
some instances amended assessments are again found to be incorrect.
Revenue had 91% of assessments issued by 26th January 2004. Revenue do however
acknowledge that errors have issued in a percentage of cases

Tax Registration – practice relating to confirmation of tax reference numbers to clients
Practitioners have concerns in relation to the practice of new registration numbers being
issued directly to clients and by-passing agents. Revenue confirmed that they issue
confirmation of registration number to the address specified by customer. In future
Revenue will ensure that a copy of correspondence issues to the agent address held on
file.

Geographic outline of Revenue post re-organisation
Practitioners reminded Revenue of commitment at December main TALC in relation to a
geographic outline of the organisation being posted to Revenue web-site.
Revenue confirmed that geographic outline is now available at
http://www.revenue.ie/cont_main.htm

Inconsistency of across tax head offsets between various Revenue Divisions
Practitioners are experiencing inconsistencies in Revenue’s application of across taxhead
offsets.
Revenue confirmed that for the most part offset criteria is inbuilt into the I.T. systems.
The system does however allow for Revenue staff to bypass the inbuilt rules where
required. This ability is essential in situations of prior agreement between Revenue
official and customer.

Text change for Section 23 Reliefs and Levies on 2002 form 11
Practitioners note the explanation in relation to text change for 2002 form 11 issued by
Revenue post main TALC 5th December 2003. However practitioners feel advance notice
should have been issued by Revenue.
Revenue acknowledge that advance notice should have issued and have agreed to
circulate all such changes in future.

Item Number 9:        Implications of new Revenue Customer Service Standards for
                      Practitioners’

Issue deferred to next main TALC meeting. Information on Revenue Customer Service
Standards available at www.revenue.ie/doc/csstandards.doc

Item Number 10:       Revenue Powers Group

Issue deferred to next main TALC meeting.
Item Number 11:        Reports from Sub-Committees

Collection TALC
Offsets
Offsets issue dealt with under issue 5

BIK Helpline in Nenagh
The BIK Helpline is now operational in the Collector-General’s Office Nenagh at 1890
25 45 65

Guide to Collector-Generals Office
Work in progress on guide. Initial draft has been circulated to Collection TALC and
work is ongoing.

Audit TALC
Next meeting scheduled for 24th February 2004

Indirect taxes TALC
The Indirect Taxes TALC met on 19 December 2003. The main topic of concern
continues to be VAT on property. A sub-group has been set up to study, in particular the
issues surrounding the economic value test. The sub-group will consider if there are
possible legislative amendments for the 2005 Finance Bill. The correspondence between
Revenue and the EU Commission will be circulated, concerning the correct VAT
treatment of head-office to branch 4th Schedule services.

Capital Taxes TALC
No report available, next meeting still to be scheduled

Item Number 12:        Any other issues

Transfer of Tax Clearance to Revenue Regions
Revenue announced that Tax Clearance will in general be dealt with in the relevant tax
districts with effect from 1st March 2004. From that date all queries relating to Tax
Clearance should be directed to the relevant Region.
Tax Clearance under the Standards in Public Offices Act will continue to be dealt with by
the Collector-General.

Request to Collector-General’s Call Centre for multiple statements of account
Revenue outlined new policy in relation to agent requests for multiple taxpayer statement
of account to the Collector-General’s Call Centre. Because of the heavy volume of such
calls all future requests will be limited to three separate taxpayers. Agents requesting any
more than three will be advised to put request in writing. Revenue advised that all such
information can be sourced directly from ROS.
Comments on ‘Information for Practitioners’ page on revenue.ie
Revenue announced that practitioners’ page on www.revenue.ie - practitioners’ is now
live.
This page will be constantly updated with current issues and will be supplemented by e-
briefing. Revenue would welcome feedback from practitioners’ in due course.

Tax Return 2003 (Form 11)
Practitioners’ queried the relevance of mortgage interest relief being included on form 11
para 45a. Duplication regarding Tax Relief at Source.
Revenue to re examine 2003 Form 11 and revert to practitioners’.