# Revenue letter for tax plus penalties and interest



## Bronte (15 Jan 2010)

A paye worker with rental income has received two letters from revenue to pay tax plus penalties and interest for 2003 and 2004.

[SIZE=+0][SIZE=+0]The letter from revenue is dated 20th December and received today 15th January with a 30 day deadline to appeal from the date of the letter.[/SIZE][/SIZE]

[SIZE=+0][SIZE=+0]A rental property was purchased in 2000, and four returns were done in 2006 for 2001, 2002, 2003 and 2004 and revenue issued a rebate for each of those years. (After this returns were done annually and a balancing statement received and no rebate)[/SIZE][/SIZE]

[SIZE=+0][SIZE=+0]The error seems to have been that the taxpayer had received married persons allowances/credits instead of being assessed as an individual. The accountant states that he has the form he sent in in which the taxpayer was to be taxed as an individual. [/SIZE][/SIZE]

Questions
Why is the revenue letter with the appeal date of only 30 days only received so late, is this normal, (the accountant also received the letters on the same date). It only gives now 4 working days to bring an appeal. Can one initially appeal that the appeal date should be extending to give time to fully investigate.

Why have revenue gone back only to 2003 initially, is it because of the 6 year rule in relation to book keeping. We think that the 2002 return is also calculated incorrectly due to the doubling of allowances, why didn't revenue check this as well ? 

If the error is due to a computer error by revenue hitting the married person button, then the tax payer is not liable surely for penalties and interest, if the revenue issued an incorrect credit/allowances document is the onus on the taxpayer to check it and point out the revenue error (in this case taxpayer did not notice)

If the error is a revenue error who will be liable for paying the accountant for the extra work this appeal entails. 

The taxpayers is now unemployed and unable to pay back the money in one lump sum, what can be negotiated with revenue. Taxpayer wants to pay 20 Euro a week as doesn't have circa 15K lump sum as rebates were spent etc.

Taxpayer was surprised to receive rebates and asked accountant were they correct and was told yes. 

Personally I'm wondering why if the revenue made the error why the tax payer has to pay anything. Taxpayer is very annoyed as they have done everything to comply they feel and might as well not have bothered. Very stressed about this etc


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## elcato (15 Jan 2010)

Unfortunately the first rule of thumb for revenue is 'Ignorance is no defense' so regardless of who is responsible for the error they can pursue the money. That said I find they are very approachable and given the circumstances I cant see them not negotiating here.
I have no idea why the letter was late but in fairness Christmas is a busy time and this is probably due to that. You still have time to appeal but I would get in touch straight away and see what they say.
Given your friends current circumstances I am pretty sure revenue will give time to pay this back as oppose to look for a lump sum.


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## Bronte (15 Jan 2010)

elcato said:


> Unfortunately the first rule of thumb for revenue is 'Ignorance is no defense' so regardless of who is responsible for the error they can pursue the money.


  But this wasn't about ignorance, it was the revenue who made the error and the taxpayer and the accountant didn't see it.


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## papervalue (15 Jan 2010)

Bronte said:


> A paye worker with rental income has received two letters from revenue to pay tax plus penalties and interest for 2003 and 2004.
> 
> [SIZE=+0][SIZE=+0]The letter from revenue is dated 20th December and received today 15th January with a 30 day deadline to appeal from the date of the letter.[/SIZE][/SIZE]
> 
> ...


 
any chance you could get how the 15k is made up?
what is the tax amount each year?
what is the interest/penalty?
what standard cut off point was used- married/single?
was their any income liable to tax at higher rate?
was this as a result of some audit?
Their is a major difference between marries/single- Did Accountant not check assessment?
Was she married before?
regardless she would have to pay back overclaimed amount- worry about interest/penalties later and probably get away with not paying them once a proper appeal sent it explaining what happened


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## mathepac (15 Jan 2010)

Ultimately, its the tax-payer's responsibility to ensure that credits, allowances, deductions, etc are correct and that returns are done on-time and accurately.

Your friend may have a case against the accountant, but not against Revenue.

There is a recent post where Revenue made a 25% reduction in penalties and interest as a gesture of culpability in a similar case (incorrect tax credits resulting in under-paymant) but I can't find it.

All Revenue post is printed, issued and posted centrally via their Logistics Branch and this seems to have resulted in delays in deliveries to clients (everything is printed in bulk, bagged and delivered in bulk to the super-duper hyper-efficient centralised sorting office in Portlaoise ).


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## Padraigb (15 Jan 2010)

The fact that the Revenue made a mistake counts for little. They expect taxpayers to check formal notices for errors.


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## Bronte (15 Jan 2010)

papervalue said:


> any chance you could get how the 15k is made up?
> what is the tax amount each year?
> what is the interest/penalty?
> what standard cut off point was used- married/single?
> ...


 
I'm not going to post exact figures, we have calculated that the error is due to the incorrect allowances we are happy that the amount of tax owing is correct. There was no audit, not sure what has triggered it, anyone have any ideas what that could be?


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## Bronte (15 Jan 2010)

mathepac said:


> Ultimately, its the tax-payer's responsibility to ensure that credits, allowances, deductions, etc are correct and that returns are done on-time and accurately.
> 
> Your friend may have a case against the accountant, but not against Revenue.
> 
> ...


 
Thanks Mathepac, but let's forget about an accountant for a moment, if revenue have made an error by putting in the wrong credits and the taxpayer doesn't know they have done so how can the tax payer be at fault?
Are the any circumstances where the revenue can be deemed to be at fault.
In relation to posting documents surely an important document with a deadline should be sent by registered post so the revenue can confirm it was received and confirm that the taxpayer has been given the correct period to respond. What would have happened if the letter was another week, the taxpayer would be out of the reply time?


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## woodbine (15 Jan 2010)

Bronte said:


> Thanks Mathepac, but let's forget about an accountant for a moment, if revenue have made an error by putting in the wrong credits and the taxpayer doesn't know they have done so how can the tax payer be at fault?


 

From what i  remember, when you get your Tax Credit certificate for the year it does say you need to check that all the details are correct and let them know if not. 
(i think that the first credit on the cert is eg "single person tax credit")
if any help!


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## Padraigb (15 Jan 2010)

Bronte said:


> Thanks Mathepac, but let's forget about an accountant for a moment, if revenue have made an error by putting in the wrong credits and the taxpayer doesn't know they have done so how can the tax payer be at fault?



Because it is the taxpayer's responsibility to check. Think of the Revenue notification as being in the same league as an invoice bearing the warning E&OE, which effectively means "this is how it is unless a mistake is found". And in the case under discussion here, a mistake was found.



> Are the any circumstances where the revenue can be deemed to be at fault.



Possibly, but I don't think this is one of them.



> In relation to posting documents surely an important document with a deadline should be sent by registered post so the revenue can confirm it was received and confirm that the taxpayer has been given the correct period to respond. What would have happened if the letter was another week, the taxpayer would be out of the reply time?



The Revenue Commissioners issue huge numbers, probably millions, of important documents with deadlines every year. The cost of registering them all would be enormous, yet few real problems arise as a result of using ordinary post. The few problems can be managed. For example, there used to be a procedure for admitting late appeals where there was a good explanation for somebody having failed to make a timely appeal. I imagine that still exists (I just don't happen to know for sure).


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## Padraigb (15 Jan 2010)

On the substantive issue: I think that a demand for penalties is somewhat heavy-handed, as it seems obvious that the taxpayer was not trying to evade tax. I suspect if that were contested, the Revenue would back down fairly quickly.

I wonder if the interest might also be contested on the grounds of equity. It's worth asking, but I don't know if they have legal authority to waive interest.

The Collector-General's office is generally fairly reasonable to deal with (definitely firm on some things, but also very humane). They will usually go along with a proposal that involves making one's best effort to clear things. If you contact them to make a payments arrangement, it might be easier to propose a monthly rather than a weekly amount (less bookkeeping for them, fits their systems better, etc.).


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## Graham_07 (15 Jan 2010)

Ultimately, if the taxpayer got more allowances/credits than they should, even as a result of an undetected Revenue error, they got more net pay than they should and the tax is repayable.

However if there has been a Revenue error, albeit initially undetected, there may be some grounds for mitigation on the penalties. Interest is a difficult matter as statutorily Revenue are not supposed to have any discretion on that. Again though the taxpayer's bona fides and belief that everything was in order may help to get some ground from them on this. 

In a case such as this though, I think it goes beyond handling the letter at arms length on a correspondence basis. I believe a meeting with the relevant officer is necessary to discuss options. Perhaps the Revenue officer, taxpayer & accountant need to meet and essentially thrash it out. You would be surprised at how many officious demands become more flexible once the human element enters the equation. 

On the matter of the possible 2002 return also being wrong, Revenue can start an investigation in one year and widen it to other years if they think necessary. Closing 2003 now does not mean that 2002 will never come up. That may need to addressed now also.


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## Bronte (18 Jan 2010)

Thanks everyone for the helpful suggestions.

I don't get why the taxpayer might still be liable for the interest if revenue made the mistake.  The taxpayer had not underpaid tax until the revenue sent the rebates?

When the taxpayer received the rebates she was so surprised she asked the accountant was it correct.  Do accountants check the calculations made by revenue or do they just accept them.  

Naturally after this the taxpayer will check very carefully all documentation but had been under the impression that that was why one hired an accountant !


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## Graham_07 (18 Jan 2010)

Bronte said:


> When the taxpayer received the rebates she was so surprised she asked the accountant was it correct. Do accountants check the calculations made by revenue or do they just accept them.
> 
> Naturally after this the taxpayer will check very carefully all documentation but had been under the impression that that was why one hired an accountant !


 
I do calcs before sending  in submission. If the assessments or P21's which come back do not agree then I check both to see why and if there is an error have it corrected. Unfortunately one can never assume that everything issuing from Revenue is correct in all respects.


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## Paddy199 (18 Jan 2010)

Q: If you got a refund and were not expecting it, why did you not query it with your accountant. Why did the accountant not query it with Revenue?

As far as I am concerned, this is the accountants fault. The submission is not complete until a notice of assessment is received by the accountant and tied into his submission made. If you check his invoice, he probably outlined this work! Check if there is an engagement letter with the accountant. If not, he has no grounds in your dispute. 

Revenue frequently make mistakes (less so with electronic submissions) and you must check the calculations. In fact they state this on the notice.


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## Susanna (18 Jan 2010)

Maybe the postman did not deliver the letter because of poor weather conditions. I know I got no post for four days and then a lot of post when the weather improved, which was reasonable


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## Bronte (23 Mar 2010)

The taxpayer has done everything to try and sort this out with revenue who were most unforthcoming.  It seems finally that revenue gave the married tax credit in error but they won't acknowledge this yet.

Taxpayer has sat with revenue who speak to her as thought she is guilty of something.  They have been factually incorrect to taxpayer.  Mentioned a refund given to them, tax payer said never received, then said spouse got it (they are seperately assessed), spouse says she never got it (correct)  etc.  Too long to detail this and how irate the taxpayer is who has spent hours and days trying to sort it out. 

Finally got some of the documents that revenue received and the accountant clearly wrote seperately assessed.  Had meeting with accountant who is major annoyed with revenue who won't reply to his letters, (ignoring certain points he makes while replying to others).  Tax payer is getting the same.  Also they have the problem that the collection office (enforcement?) is in Limerick, who only speak in writing, and taxpayer in in a different county and it seems the two revenue's don't talk to each other.

Accountants advice now is to do nothing and let them throw the book at tax payer.  (Out of work and one asset conceivably in negative equity)  That most people are now not even bothering to reply to revenue.  What do others think?  Taxpayer is willing to pay the tax (by instalment from dole) and revenue are aware of this.


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## Bronte (23 Mar 2010)

I've just realised there were over 1K views of this topic but very few replies.  Why is that?


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## papervalue (23 Mar 2010)

From re reading your posts it is not clear what way the person was taxed

You have separate assessment v separate treatment(single individual) which are two different methods

if it was separete assessment-they could be transfer of bands

http://www.revenue.ie/en/tax/it/credits/married-persons-taxation.html#section6

Does same accountant do husband tax affairs as well?

I leave it with the accountant as it looks here like we dont have full facts as no visual assessments to look and he does have full facts


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## mathepac (23 Mar 2010)

IME, a ratio of 100:1 views to responses is not unusual, check other threads. In this thread I've posted once (twice now) and viewed 17/18 other responses more than once.

I'm sorry (and based on personal experience I find it very surprising) to hear of the difficulties in communications with Revenue which I am at a loss to try and explain.


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## Padraigb (23 Mar 2010)

mathepac said:


> ... I'm sorry (and based on personal experience I find it very surprising) to hear of the difficulties in communications with Revenue which I am at a loss to try and explain.



It might come down to something very simple: a clash between the taxpayer and one individual Revenue staff member (and I'm not suggesting who might have got the tone wrong: it might be either, or it might be both).


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## Bronte (23 Mar 2010)

Padraigb said:


> It might come down to something very simple: a clash between the taxpayer and one individual Revenue staff member (and I'm not suggesting who might have got the tone wrong: it might be either, or it might be both).


 
Everybody thanks for your replies.  No taxpayer got the tone right, was well instructed by me on that to be polite and consistent at all times.  We think the revenue person speaking doesn't understand how to calculate tax and how their systems work as he had to constantly go behind the scenes and check information with someone else.  When he came back with attitute (I've got you now !) he was wrong, and went back again and came back again with wrong information. 

He even mention that spouse had received a refund of x in 2003 for which as it's not joint assessment I believe he should not have been told.

His accountant has had it with revenue in relation to this.  Taxpayer and accountant get on very well.  As I said revenue are not replying properly to accountants correspondance either.

Personally I think revenue made a mistake but don't want to acknowledge it.  They need to get someone competent to drag out all the files and see where everything went wrong and make a decision but to get them to that point seems to be very difficult.  

You guys have no idea of the grief this has cause the compliant tax payer who just wants everything sorted.  A simple competant person in revenue to take responsibility and sort it out.  Too much to ask it seems.

Incidentally they've now also discovered that due to maternity leave in one of the tax years, tax was also overpaid but seemingly this is out of time to claim now.


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## Black Sheep (23 Mar 2010)

The revenue are taking very high handed action here (I have been following this case with interest and am not a tax expert) but I cannot find anything specific that prevents them from doing so.
Seems to me that client met the wrong person on her visit to revenue. Is there any hope of moving this case up the scale to a higher power.

Would the FOI be a route to get out the full story.

And yes I do understand the clients stress. I would be spitting fire


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## irishmoss (23 Mar 2010)

Surely by the quote below the accountant was responsible? I'm surprised the accountant didn't check the balancing statements when he was told the client got a refund they weren't expecting.
Revenue made the error but that doesn't excuse the fact that the accountant didn't follow up on concens by the client!

QUOTE>>Taxpayer was surprised to receive rebates and asked accountant were they correct and was told yes.


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## vector (23 Mar 2010)

The tone here agrees with what I've been thinking with regard to the Revenue... everything is fine until something goes wrong, and then the taxpayer (who might not have a lot of money) has to face the Revenue Commissioners (with their experts, lawyers, and limitless funds compliments by statutory powers)


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## Bronte (24 Mar 2010)

Yes it's like David and Goliath, taxpayer was on the dole, now not entitled to that and dependant on spouse and some savings plus the investment property but the money from that goes on the mortgage.  Not even sure if the accountant is going to charge a fee for all the work done on trying to resolve this with revenue and meanwhile the taxpayer has had to do an awful lot of legwork themselves.  

At the last meeting with Revenue the official said they'd get the offical in charge of the case to come out and speak to taxpayer but then this person wouldn't come out and relayed that they would make an appointment with taxpayer.  I've advised her to only speak to them by registered letter and if they don't reply to all the points in a letter to write another letter.  They've tried the meetings with revenue and phoning them option and have had no progress.  Anyone been through this who understands the procedures?  It's like banging your head against a brick wall.


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## papervalue (24 Mar 2010)

Please clarify what method was used. 

On your post 15/01/10- It is Individual

On your Post 24/03/10- It is Separtely Assessed

You have separate assessment v separate treatment(single individual) which are two different methods

If as per post 24/03/10 it is Separtely Assessed as per accountant written on form- The wife could get the unused credits bands from other spouse

Please take a read of link of different methods and what method was written on form

http://www.revenue.ie/en/tax/it/cred....html#section6

How is the husband being treated in This?


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## WindUp (24 Mar 2010)

irishmoss said:


> Surely by the quote below the accountant was responsible? I'm surprised the accountant didn't check the balancing statements when he was told the client got a refund they weren't expecting.
> Revenue made the error but that doesn't excuse the fact that the accountant didn't follow up on concens by the client!
> 
> QUOTE>>Taxpayer was surprised to receive rebates and asked accountant were they correct and was told yes.


 
I would agree- accountants would typically calculate what the tax liability/ refund should be for any given year and reconcile it to the balancing statement. any discrepency should have been resolved at the time


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## Bronte (24 Mar 2010)

papervalue said:


> Please clarify what method was used.
> 
> On your post 15/01/10- It is Individual
> 
> ...


 
In 2005 revenue changed the format of Forms, so the box for married was ticked, basis of assessment written by accountant in biro as seperate assessment. Prior to this the revenue box was ticked for seperate assessment. Taxpayer is looking at copies of returns. Sorry if I was unclear, it's very difficult doing this for someone where I can't see the documents and who lives in another country as I do. Revenue put in the married allowances for this person

Spouse was always taxed as individual under PAYE system, never got married allowances.


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## papervalue (24 Mar 2010)

What is the position with Husband, Did he get married credit as well, or did he overpay tax at his side

You would nearly want to be looking at both assessments at same time


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## Bronte (24 Mar 2010)

papervalue said:


> What is the position with Husband, Did he get married credit as well, or did he overpay tax at his side
> 
> You would nearly want to be looking at both assessments at same time


 
Would you believe that due to being unemployed, unpaid parental leave, for a while in one of those years they overpaid tax but can't claim it back as it's outside the 4 year rule.  

They are looking at both assessments to figure out how everything went wrong.


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## headache (25 Mar 2010)

Hope this doesn't sound personal, but are there children of the marriage? Both parents can get the additional lone parent credit in the case of shared custody.  If that were the case there would no longer be an underpayment.
Sounds like your friend has been landed with the worst Revenue employee ever.  Best of luck!


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## Bronte (8 Nov 2010)

*Revenue letter for tax plus penalties plus interest*

There was a good result on this case. Taxpayer finally got to see someone in revenue who has the ultimate control to make a decision. Result is that tax payer has to pay neither the tax nor interest nor penalties. It's somehow being written off. Very surprised that the tax even is being written off. We are aware that it may cause an issue in the future if taxpayer goes back working or applies for a tax clearance certificate and that 'the computer' will show up something negative. But for now tax payer is very happy. What was in the taxpayers favour as far as we can tell was that they were as clean as a whistle, the revenue had made an error, (which they will never acknowledge) and the decision maker had sympathy in these trying times. Thanks for the good advice on this. One on one meetings with revenue also really important we believe.


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## BazFitz (9 Nov 2010)

Good to hear that it's been resolved, but if I was involved I'd be arguing that Revenue were out of time to revisit those years.  There was no fraud or neglect and the information provided to Revenue by the taxpayer was correct.


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