InDisputes: Recent Reminders Of The Importance Of Contemporaneous Documentary Evidence

• Jurisdiction: Ireland
• Law Firm: Matheson
• Subject Matter: Tax, Tax Authorities
• Author: Mr Aidan Fahy and Audrey Kean
• Published date: 13 February 2023

It is well established that the burden of proof in Irish tax cases lies with the taxpayer.¹ As such, the outcome of a tax appeal often depends on the quality of contemporaneous evidence available to support the taxpayer's position. The importance of carefully and contemporaneously documenting all tax related matters and the clear intentions of the parties to a transaction cannot therefore be overstated, as demonstrated by a number of recent Tax Appeal Commission ("TAC") cases.

Recent cases

The importance of quality contemporaneous documentary evidence was highlighted in the following recent TAC cases:

1. In one recent TAC case², a contract for sale dated 2013 was produced before the TAC and the taxpayer had no documentary evidence to support his contention that the relevant disposal took place in 2012 (not 2013), nor did he have any documentary evidence of the trust - appointing his mother as trustee over a portion of property to which he claimed he was beneficially entitled. The Commissioner held that the taxpayer had not succeeded in proving his case.
2. In another recent TAC case³, part of the taxpayer's claim was that he was entitled to take a tax deduction for maintenance payments paid prior to a divorce agreement with his former spouse. This claim was based on an informal written agreement between the former spouses. The Commissioner, in refusing this part of the taxpayer's claim noted as follows:
   "the absence of independent documentary evidence proving the existence of the written agreement... prior to the commencement of payments... is fatal to this aspect of the appeal...[and] it was incumbent on the Appellant to produce independent evidence corroborating the provenance of an unwitnessed and unsigned document..."
3. In a further TAC case⁴, the taxpayer...