Increased challenges for taxpayers in tax disputes

Insights from the 2024 Tax Appeals Commission Annual Report

The 2024 annual report from the Tax Appeals Commission (TAC) provides a comprehensive look into the operations and outcomes of tax appeals in Ireland in 2024. The report highlights the Commission’s continued focus on efficiency and modernisation, leading to the swift processing of cases and the lowest level of appeals on hand since its establishment. However, several key statistics point to a more challenging environment for taxpayers.

Key statistics from the TAC report

c.70% of appeals lodged in 2024 were closed within the year. This reflects our experience of the speed of the process. It highlights that taxpayers need to be able to meet tight deadlines, but also that the appeal process can resolve most cases within 12 months.

In 2024, the TAC received 1,281 new appeals, representing €207 million in disputed tax. This marks a 10% increase in the number of appeals from 2023. This is consistent with our experience of increased Revenue interventions and disputes within the last 12 months.

Of the appeals closed in 2024, the following statistics are of note:

• Appeals refused: The number of appeals refused (i.e. the appeal was not accepted to be heard by the TAC) has more than doubled, from 5% in the prior year to 11% in 2024. This highlights the importance of taxpayers obtaining advice and ensuring they are appealing an appealable matter, that they submit their appeals in the time allowed, and that they have complied with all necessary preconditions to bringing an appeal.
• Settlements: The number of settlements has decreased by 12% compared to the prior year. This indicates that taxpayers may find it more difficult than previously to agree with a settlement with the Revenue Commissioners, which is a trend we are seeing.
• Cases withdrawn: The number of cases withdrawn increased by 8%. This indicates a growing reluctance among taxpayers to pursue cases to determination.

Hearings and case management conferences

In 2024, the TAC scheduled 280 hearings, a decrease from 2023, reflecting the TAC's focus on resolving more complex cases that often require extended hearing times. The report also notes an increase in very long appeal hearings.

TAC determinations

The TAC issued 180 determinations in 2024. These decisions provide valuable insights into the interpretation and application of Irish tax law, although they are not binding precedents. The TAC also issued 50 written decisions on preliminary issues arising prior to the hearing of the appeal. Those decisions are not required to be published, and it is therefore difficult to comment on any trends on the TAC’s approach to preliminary issues.

Prominent tax types: Income tax and corporation tax 

Income tax appeals were the most prevalent, accounting for 45% of the appeals received in 2024. This trend highlights the ongoing scrutiny and disputes surrounding personal income tax assessments.

Corporation tax appeals, while representing only 4% of the appeals received, involved higher amounts in dispute. The quantum of corporation tax appeals was €94 million, amounting to some 45% of the total value of appeals received. This aligns with our own experience of the tax appeals.

Increasing complexity and European law

The TAC observed an increase in appeals involving multiple tax types. This trend has led to longer and more detailed hearings, reflecting the growing complexity of tax disputes in Ireland. The complexity is driven by several factors, including the interplay between domestic and European Union (EU) tax laws, as well as the evolving nature of tax regulations. This is not unexpected given the greater impact the EU has had on domestic tax rules in recent years.

Key actions businesses can take today

The 10% increase in the number of appeals from 2023 to 2024 indicates a growth in the volume of tax disputes in Ireland. As tax issues become more intricate and taxpayers face increasing challenges, here are three steps to ensure readiness in the event of a dispute:

1. Professional advice: Seek professional advice at the earliest opportunity to navigate the exacting and fast-moving appeals process.
2. Documentation: Prepare comprehensive and contemporaneous documentation to support tax positions. This step needs to be done in real time at the time of your most significant transactions and can help in dealing with audits and avoiding disputes. However, if a dispute arises, documentation is key as the burden of proof lies with the taxpayer. If there is a gap in documentary evidence, this can mean a taxpayer will not succeed at an appeal. Furthermore, due to the swift process, once an appeal is lodged, taxpayers need their documentation readily available.
3. Controls: Implement and maintain robust internal controls to ensure compliance with tax obligations. Effective controls help prevent errors, support accurate tax filings, facilitate prompt responses to Revenue queries and can be supportive in seeking penalty mitigation. Regularly review and update these controls to address any changes in tax law or business operations.

We’re here to help you

Our diverse Tax Risk and Controversy team, which includes experienced former Revenue officials, former tax appeal commissioner, solicitors, barristers and tax experts, brings a wealth of knowledge in handling all aspects of revenue interventions, tax disputes, appeals and proactive tax risk management. We are here to help you navigate the complexities of Revenue interventions and disputes, ensuring that both monetary and reputational risks are effectively managed. Contact us today for expert advice.