The High Court has ruled that a tax return must be accurate in every material respect to qualify for the four-year protection against an amended assessment under section 955(2) of the Taxes Consolidation Act 1997. A taxpayer’s belief that the return was accurate does not affect that test.
Mr Justice Rory Mulcahy gave the ruling on 19 April 2024 in a case stated by the Tax Appeals Commission at the request of the Revenue Commissioners. Revenue challenged the Commission’s decision that an amended assessment against Dermot Tobin for 2011 was out of time. The assessment, issued on 3 April 2017, treated a €140,656 Single Payment Scheme payment as Mr Tobin’s income and assessed additional income tax of €72,728.35.
The payment had gone into Mr Tobin’s account and was immediately transferred to Dermot Tobin Farm Limited, the company he had incorporated in 2011 to take over his farming business. The company declared the payment in its 2011 corporation tax return. The Commission had found that Mr Tobin believed the payment was company income and that he had made what he believed was a full and true disclosure in his personal return.
The High Court answered “yes” to whether the Commissioner erred in interpreting section 955(2), and “no” to whether she applied it correctly. The judge held that the provision requires accuracy in every material respect, regardless of a taxpayer’s subjective belief. He distinguished the separate statutory provision that protects a return where a taxpayer discloses a genuine doubt about the tax treatment of a matter.
The judge did not decide whether the payment, or any part of it, was taxable as Mr Tobin’s income. That issue had not been determined by the Commission and must be considered on remittal, along with the consequences of its conclusion. The judge said Mr Tobin’s belief was not relevant to the four-year time-limit question, but answered the third question in the case stated “no”: the Commissioner was entitled to find that he believed the payment was company income. The High Court did not displace her finding on that point.
The matter was listed for 3 May 2024 for final orders. The judgment does not state what final orders were made.