The High Court has rejected Paul Anthony McGarry’s challenge to a Revenue Commissioners decision that his tax payments amounted to a statutory settlement capable of being published in Iris Oifigiúil.
The dispute followed a Revenue audit concerning the 2004 accounting period. Revenue calculated that €15,534 in tax was due, together with €2,206.07 in interest. Mr McGarry paid those amounts in February 2007.
The auditor classified the default as “gross carelessness”. That classification carried a 30% mitigated penalty and, unlike the lower category of “insufficient care”, exposed the taxpayer to publication. Mr McGarry challenged the classification through Revenue’s internal and external review procedures, but the decision was upheld.
Revenue later demanded the full statutory fines and penalties, amounting to €15,784, warning that proceedings would follow if payment was not made. Mr McGarry sent a cheque for that amount in February 2008 while stating that it was paid solely as the full amount due under the relevant legislation.
Revenue subsequently treated the combined €33,604.07 in tax, interest and penalties as a settlement under section 1086(2)(c) of the Taxes Consolidation Act 1997 and said publication was mandatory. Mr McGarry argued there had been no agreement: he had simply paid amounts demanded under statute, leaving Revenue with nothing to sue for.
Mr Justice O’Neill disagreed. He held that Mr McGarry’s payment of the full penalty demand demonstrated agreement on the outstanding liability. The earlier tax and interest payment and later penalty payment could together form the statutory “specified sum”; the law did not require one single payment.
The judge also held that Revenue had refrained from proceedings because the agreed debt had been discharged. In any event, section 1086(2A) deemed acceptance of the full amount of Revenue’s claim to have occurred pursuant to such an agreement.
The judicial review challenge to Revenue’s decision was therefore rejected.