IRELAND Law and Practice Contributed by: Amelia O’Beirne and Trevor Glavey, A&L Goodbody
behaviour of the taxpayers, and range from a so- called “risk review” to a formal “audit”. • Level 3 interventions are designed to confront what Revenue perceives as high-risk practices and cases displaying risks of suspected fraud and tax evasion. Interventions within this level are termed “investigations”. Under each of the intervention levels, there is a fact- finding/evidence-gathering stage, during which Reve - nue will make enquiries and request information either by way of written correspondence/document review or on-site enquiries (using statutory information-gath - ering powers if necessary). Revenue has relatively broad information-gathering powers in conducting its enquiries. Revenue officials have the power to enter premises/places where it is believed a trade or profession chargeable to tax is being carried out or associated business records are retained. Officials can require persons at the prem - ises to produce business records, and those officials can also search the premises. Officials are entitled to remove records and retain them for further examina - tion. The records within scope of production include written material and those records stored on elec - tronic devices. A search warrant is generally required in order for a Revenue official to enter a private resi - dence. Revenue may also request information from third par - ties by serving notice in writing to that third party and informing the taxpayer that such a notice has been issued. Revenue also has extensive powers to request information from financial institutions. When it comes to exercising its powers, Revenue gen - erally seeks in the first instance to encourage voluntary compliance by taxpayers, but pursues non-compli - ance vigorously. In terms of limitations on Revenue, in general Revenue can only issue an amended assess - ment within four years from the end of the accounting period in which the relevant tax return is delivered. An exception to this general rule exists in the case of fraud or neglect (in which case there is no time limit on the making of assessments). The four-year time limit also does not apply where the return submitted by the taxpayer for the period does not contain a full
and true disclosure of all material facts necessary for the making of an assessment for that period.
6. Penalties and Sanctions 6.1 Tax Penalties
Irish tax legislation contains civil and criminal penal - ties that can be imposed depending on the nature of the tax default. Fixed penalties generally apply to breaches of the tax legislation focused on procedural administration (eg, for failure to file a return). Tax-geared penalties generally apply in situations where the tax default gives rise to a tax liability, with the penalty amount being a percentage of the amount of tax underpaid. In this instance, the penalty can range anywhere from 3% to 100% depending on a number of factors. These factors include: • whether the error was careless or deliberate and with/without significant tax consequences; • whether the taxpayer made an unprompted or prompted qualifying disclosure of the error; and • how co-operative the taxpayer is once the error has been disclosed or identified. A penalty is not due where the aggregate amount of the tax or duty default is less than EUR6,000 and the default is not in the deliberate behaviour category. Where Revenue forms the opinion that a taxpayer is liable to a penalty, the amount of the penalty is com - puted by Revenue and sought to be agreed with the taxpayer (and paid). Where a taxpayer does not agree to the penalty liability or does not pay a penalty which they have agreed to, a Notice of Opinion will be issued by Revenue to the taxpayer, outlining the amount of the penalty that Revenue asserts to be due. Where the amount of the penalty is not agreed, Rev - enue can make an application to the District Court, Circuit Court or High Court for that court to determine whether the penalty is due. The appropriate court is determined by reference to the jurisdictional limits for civil matters. Where Revenue refers a matter to court,
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