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InDisputes: High Court Upholds TAC Determination on Time Limits

AUTHORs: Brian Doohan co-author(s): Eimear Meally Services: Tax DATE: 07/03/2023

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. 


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 decision and rejected the taxpayer's argument that the pleadings could be amended in light of the Droog case.  In that context, the Court held that the Droog case was in relation to a "totally separate point" and specifically noted that both the High Court and Supreme Court decisions in Droog, made it abundantly clear that "the court was only dealing with the question of whether the four-year time limit applied to opinions given under s. 811, in the same way as it applied to assessments generally". 

Full and True Disclosure / Negligence

As part of their argumentation justifying the basis for issuing the amended assessment outside the general four year time limit, Revenue argued, before the TAC, that the general four-year time limit did not apply as the taxpayer had not made a "full and true disclosure" due to a number of errors in his tax return.

While, before the TAC, the taxpayer did appear to accept that certain errors were made in the tax return, he sought to rely on the fact that his accountant had submitted the return on his behalf as a basis for avoiding the consequence of those errors.  In this context, the taxpayer made submissions  which relied on case law which considered whether the taxpayer had been negligent in making erroneous returns and sought to argue that he could not be considered to have been negligent in circumstances where he sought out and relied upon professional advice.

The TAC held that the legislative provision that Revenue were relying on did not refer to negligence nor was a finding of negligence required in order for the exception to the general time limit to apply. The TAC further held that the return contained a number of errors, the most serious of which was that it did not define the disposal of land as a disposal of development land and, accordingly, it was clear that the return did not contain a full and true disclosure.

The Court again agreed with the TAC's findings and, interestingly, in the context of negligence, drew a distinction between circumstances where a taxpayer relies on a tax adviser / accountant's advice where a complex area of tax law is involved and circumstances where an accountant merely makes a return on behalf of a taxpayer.  The Court held that in the latter case, the taxpayer remains liable for the erroneous return but in the former case, the taxpayer may be able to avoid a finding of negligence.

Further, on the 'full and true disclosure' aspect, the Court held that the taxpayer's submissions were not well founded as they dealt primarily with whether the taxpayer had been negligent in making his return.  The Court went on to hold that there were a number of errors that did not involve complex areas of law and in addition there was no evidence that the taxpayer relied on advice from his accountant.  On that basis, the Court held that the TAC had been entitled to hold that a full and true disclosure had not been made by the taxpayer.

Key Takeaways

The decision of the Court once again highlights that, when initiating proceedings before TAC (through the filing of a notice of appeal), significant care should be taken to ensure that all appropriate grounds of appeal are included.  As such, it is advisable for tax payers to seek legal advice at an early point in the TAC appeal process in order to avoid running into issues later in the TAC process on the ability or otherwise to advance certain arguments before the TAC. 

The case also provides some interesting insights on the circumstances where obtaining professional advice may assist in bolstering an argument against the raising of assessment by Revenue outside the general four year time limit.

[1] Section 949I(6) of the Taxes Consolidation Act 1997