Lee v Revenue Commissioners: Mapping The TAC's Jurisdiction

• Published date: 23 August 2021
• Subject Matter: Finance and Banking, Litigation, Mediation & Arbitration, Tax, Financial Services, Trials & Appeals & Compensation, Income Tax, Tax Authorities
• Law Firm: Matheson
• Author: Rachel O'Sullivan and Tom's Bailey

Introduction

The recent decision of the Court of Appeal (CofA) in Lee v Revenue Commissioners¹ clarifies the principles that are applicable in determining the jurisdictional scope of the Tax Appeals Commission (TAC). Although the jurisdiction of the TAC's predecessor, the Appeal Commissioners (ACs), was at issue in this case, the principles promulgated by the CofA are relevant to the TAC's jurisdiction.

Overview of the TAC

The TAC was established in 2016 pursuant to s3 of the Finance (Tax Appeals) Act 2015 ("the 2015 Act") to replace the Office of the ACs as the independent statutory body responsible for the administration and determination of tax appeals. The TAC's functions are broadly stipulated in s6 of the 2015 Act as including:

"doing all such other things as they consider conducive to the resolution of disputes between appellants and the Revenue Commissioners and the establishment of the correct liability to tax of appellants [emphasis added]".

The TAC's procedural autonomy is reflected in Part 40A of the Taxes Consolidation Act 1997 (TCA 1997), which prescribes the appeals process.² In addition to determining the validity of an appeal and the steps to be taken by the parties to resolve the dispute, the TAC is entitled to determine an appeal without a hearing where appropriate.³

The Decision

Overview

In Lee v Revenue Commissioners the taxpayer claimed that Revenue had accepted a payment he made as settlement of a tax liability and was bound by the agreement. The case concerned whether the ACs had jurisdiction to determine whether a contract had been concluded between the taxpayer and Revenue in the circumstances. The High Court held that the ACs had such jurisdiction, emphasising the elaborate procedures enacted by the Oireachtas for determining a taxpayer's liability and the need to avoid an artificially narrow construction of the powers and authority conferred on the ACs.

Almost exactly three years from the date of the High Court decision the CofA delivered its judgment, on 28 January 2021. At the very outset, the CofA framed the appeal as presenting a "net issue as to the scope of the jurisdiction of the Appeal Commissioners...when hearing appeals against assessments to income tax". Ultimately, the CofA overturned the High Court's decision, concluding that the ACs' jurisdiction extended to determining whether an assessment properly reflects the statutory charge to tax, having regard to the relevant provisions of the taxing Act and any incidental...