InDisputes: High Court Upholds TAC Determination On Time Limits

• Law Firm: Matheson
• Subject Matter: Litigation, Mediation & Arbitration, Tax, Professional Negligence, Capital Gains Tax, Tax Authorities
• Author: Mr Brian Doohan and Eimear Meally
• Published date: 13 March 2023

The recent High Court (the "Court") decision in Thomas McNamara v The Revenue Commissioners has again emphasised the importance of taking due care when preparing for appeals before the Tax Appeals Commission ("TAC").

The McNamara case also provides some interesting commentary on the circumstances in which an officer of the Irish Revenue Commissioners ("Revenue") can validly raise an amended assessment outside the general four year time limit.

Background

The McNamara case was a case stated from a TAC determination, where before TAC, the essential question was whether the sale of a site was the sale of development land for capital gains tax purposes.

The Court ultimately upheld the TAC determination on the substantive issue and, as part of its decision, also affirmed two interesting aspects of the TAC determination (as outlined below).

Grounds of Appeal

The first point of affirmation related to whether the taxpayer was entitled to advance argumentation before the TAC in circumstances where the taxpayer's original notice of appeal (the "NoA") had not included a ground of appeal on that point.

The taxpayer contended that Revenue raised the relevant amended assessment outside the general statutorily prescribed time period (being four years from the end of the period in which the tax return for the relevant chargeable period is filed) - this was on the basis that Revenue raised the amended assessment approximately seven years after the taxpayer had filed the relevant tax return.

Importantly, however, the taxpayer had failed to specifically ground this argument in the NoA which had been filed in 2014.

In general, parties are not entitled to rely on grounds not specified in a notice of appeal "unless the Appeal Commissioners are satisfied that the ground could not reasonably have been stated in the notice"¹.

Before the TAC, the taxpayer sought to argue that, as the Hans Droog v Revenue Commissioners case was determinative of the time limitation issue and the decision in that case had not been handed down until after the filing of the NoA, the relevant ground could not reasonably have been included and, as such, TAC should exercise its broad discretion to allow pleadings to be amended.

As part of the TAC determination, it was held that the taxpayer could not rely on the Hans Droog case as the Court was not revising or clarifying the law in relation to time limits in the manner contended by the taxpayer.

Importantly, the Court affirmed the TAC Commissioner's...