Revenue Commission Clarifies Tax Treatment Of Penalties Involving Deceased Taxpayers

by Jason Gorringe, Tax-News.com, London

25 March 2008

The Irish Revenue Commission last week published a statement clarifying the provisions of section 1060 of the Taxes Consolidation Act 1997.

Under the provisions, the tax authority explained that it will now be made official that where a settlement that includes a penalty element has been agreed between Revenue and a deceased taxpayer prior to his/her death (or where a penalty has been awarded in proceedings finalised prior to the taxpayer’s death), and that penalty remains unpaid or not fully paid as at the date of death, the Revenue will continue to proceed against the personal representatives of the deceased for the recovery of that unpaid penalty.

There is no change to existing practice in these particular circumstances, the Commission stated .

However, where the taxpayer dies before a settlement has been agreed with Revenue, the tax authority stated that it will not seek recovery of any penalty element from the deceased’s personal representatives (and will discontinue proceedings for recovery of such penalty if they have been initiated).

With regard to publication under section 1086 of the Taxes Consolidation Act 1997, any cases falling under the first set of circumstances will continue to be published where the publication criteria in Section 1086 TCA 1997 are met.

Cases falling under the second set of circumstances will not be published under section 1086 – because there is no tax-geared penalty as part of an agreed settlement and no court-imposed penalty.

The Revenue further revealed that settled cases will not be reopened.

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