Tax returns not filed by parent. How to rectify?

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Teddy23

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Hi there
My Dad aged in his 80s has not field tax returns believing his income was under the tax exemption threshold of €18k for a single person. We now realise his income is over the limit by approx €10k (earns €28k per annum).

What should we do to rectify situation?

Has anyone experienced a similar situation and if so how did you address?

Options as I see it

1. Do nothing (assume this will just delay the process as assume would need to rectify once dealing with Dad's probate).

2. File tax return now for last year and seek to retrospectively address for previous years. Would welcome advice here if anyone know how best to do this to simplify the process while ensuring revenue would be satisfied.

3. Contact revenue directly to see if they will set out the approach they want us to follow?

Would welcome any comments especially if have experience dealing with similar situations.

Thanks.
 
If the income was taxed correctly, then is there any need to file a return?

The majority of income-taxpayers in Ireland do not file tax returns.


I presume the income is made up of one or more pensions, maybe including a State pension.

If these have been taxed correctly, then all is okay.

As there is no taxation of SW payments at source, then the State Pension would have to be coded into the other incomes.
 
Protocol said:
If the income was taxed correctly, then is there any need to file a return?

The majority of income-taxpayers in Ireland do not file tax returns.


I presume the income is made up of one or more pensions, maybe including a State pension.

If these have been taxed correctly, then all is okay.

As there is no taxation of SW payments at source, then the State Pension would have to be coded into the other incomes.
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Thanks.
His income is made up of state pension and then a foreign pension of between 10-15k per annum. I think this could be taxable ?
 
If there is 15 years of underpaid income tax, age 65-80, I would advise you to think carefully.

Other posters here with more experience than me will advise you.

I would not ring Revenue and blurt out that 15 years of income tax has been underpaid.
 
Protocol said:
If there is 15 years of underpaid income tax, age 65-80, I would advise you to think carefully.

Other posters here with more experience than me will advise you.

I would not ring Revenue and blurt out that 15 years of income tax has been underpaid.
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Absolutely.

Revenue probably aren't that interested anyway in collecting back taxes from an elderly person in modest earnings circumstances but if for example a family member was to suggest to a Revenue official there's a likely tax default, the official may feel obligated to apply the letter of the law.

Tread most carefully.
 
You need to supply more detailed information about his situation and income to get helpful answers
 
I don't see any benefit in asking revenue about this. At best they'll tell you to file the returns; at worst, well something worse!

It's most likely that the foreign pension is taxable here, but government pensions (like a civil service pension here, rather than the old age pension) often aren't depending on the double taxation agreement.
 
What was the source of the foreign pension - what was the type of employment that gave rise to it?

It may have been taxed at source in the foreign country - if so, then it might not be taxable in Ireland or if it is, then the foreign tax may give rise to a tax credit
 
Dr Strangelove said:
Is this a state pension of approx €14k and occupational income of another €14k?

Or is there other investment or busines income perhaps?
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State pension and foreign pension, no other investment or business income
Protocol said:
All income is taxable.

The foreign country might charge income tax at source on the foreign pension.

There may then be a tax-treaty between the foreign country and here.

I presume you or he has read this:
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Thanks, yes and based on the attached it would seem the foreign pension is taxable which is why I think he should have done tax returns in the past?
Ciru75 said:
I don't see any benefit in asking revenue about this. At best they'll tell you to file the returns; at worst, well something worse!

It's most likely that the foreign pension is taxable here, but government pensions (like a civil service pension here, rather than the old age pension) often aren't depending on the double taxation agreement.
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Thanks and I tend to agree.

That said, how do we go about rectifying as assume this would be identified by probate and I thought it might be better to try address prior to then?
 

Attachments

  • 35-02-04(2) (1).pdf
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Gordon Gekko said:
Most people would let sleeping dogs lie and take their chances.
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He also might have been taxed abroad. In addition if he's married and his wife has no earnings it might mean he owes less than assumed. Until the OP gives further details on what has happened then it's hard to figure out what to do.

About 5 or 10 years ago it was discovered that a lot of people had a second pension that they didn't realise was taxable. I think it was teachers but I'm a bit vague on the details, had an in law a teacher on pension and she got a pension via her husband. Not sure how revenue approached it either. And I think in law never reported it.
 
You need to answer the question about the type of employment that gave rise to the foreign pension

What country are we talking about

It's best to give as much information as you can and not have us trying to draw it out bit by bit - best to give too much info than not enough

Not enough just gets people wandering off down byways and side roads that are not relevant and confuses the issue

Sorry, ignore that - I just read the pdf but I am not sure that's the full story without reading the DTT
 
jpd said:
What was the source of the foreign pension - what was the type of employment that gave rise to it?

It may have been taxed at source in the foreign country - if so, then it might not be taxable in Ireland or if it is, then the foreign tax may give rise to a tax credit
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It's a pension and based on the attachment it is treated as taxable income for tax purposes. Up until he becomes a widow, the threshold for exemption was higher so there was no need to file income tax return. But that would have changed as the single person exception threshold is lower
Dr Strangelove said:
Are you sure it’s not taxed at source?

Is your father a US citizen?
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Yes he is a US citizen. Based on the attached its taxable as income here
Teddy23 said:
Thanks.
His income is made up of state pension and then a foreign US pension of between 10-15k per annum. I think this could be taxable?
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Teddy23 said:
Hi there
My Dad aged in his 80s has not field tax returns believing his income was under the tax exemption threshold of €18k for a single person. We now realise his income is over the limit by approx €10k (earns €28k per annum).

What should we do to rectify situation?

Has anyone experienced a similar situation and if so how did you address?

Options as I see it

1. Do nothing (assume this will just delay the process as assume would need to rectify once dealing with Dad's probate).

2. File tax return now for last year and seek to retrospectively address for previous years. Would welcome advice here if anyone know how best to do this to simplify the process while ensuring revenue would be satisfied.

3. Contact revenue directly to see if they will set out the approach they want us to follow?

Would welcome any comments especially if have experience
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Teddy23 said:
dealing with similar situations.

Thanks.
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Just to add my Dad is a US citizen and the additional income relates to his US pension.
When became a widower, the tax exemption limit reduced to €18k so prior to that there is no issue given that as a married couple they are earning less than threshold.
jpd said:
You need to answer the question about the type of employment that gave rise to the foreign pension

What country are we talking about

It's best to give as much information as you can and not have us trying to draw it out bit by bit - best to give too much info than not enough

Not enough just gets people wandering off down byways and side roads that are not relevant and confuses the issue

Sorry, ignore that - I just read the pdf but I am not sure that's the full story without reading the DTT
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Okay, here is some more info.

- my dad lived and worked in states for over 20 years. This entitled him to a US pension which he has been receiving.

- as a married couple there income was under the exception threshold so no tax return was required. As a widower the exception limit is lower (€18k) so technically it would seem he should have filed a tax return given income over €18k due to receipt of his American pension

- my question is how best to address this or as one poster mentioned do we let sleeping dogs lie. Concern is that will this need to be addressed as part of probate I'm any event?
 

Attachments

  • 35-02-04(2) (1).pdf
    69.8 KB · Views: 109
Teddy23 said:
Just to add my Dad is a US citizen and the additional income relates to his US pension.
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Does he not have a US tax liability too then? My understanding was that all US over 65s are obliged to file a tax return to the IRS once global income is over $15,700.

Does he have any US assets?

I am not suggesting you turn over every stone here, but it’s important to have the full picture.
 
I honestly don't know and hope he doesn't have a US tax liability. Assuming my parents would have checked this out at the time.
He has no US assets.

He has been fully resident in Ireland for over 45 years. I just want to see what we should do to address the fact he hasn't filed Irish tax returns
 
I tried to read the double taxation treaty on the Revenue website but I am a but bamboozled by the legalese

However, my take on it is that if his pension was based on employment in the US on government service eg a teacher, public servant the it is only taxable by the US and is not taxable income in Ireland

If the pension is based on employment in the private sector, then it is not taxable by the US but is taxable in Ireland

Which is it?
 
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