Shay Brennan Explains Tax Appeals Reforms and Temporary Commissioners

Good afternoon. Thank you all for your comments so far. A few questions, kind of broadly across various things you raised in your opening statements. First, maybe you could help me understand what a temporary appeals commissioner is. What is their status? Are they full-time state employees, temporary seconded, or maybe you could describe that? Yeah, so there are at the moment present two types. There's technically three types of appointment provisions for appeal commissioners. So you have the chairperson, they're appointed under a particular section of the Tax Appeals Act. There are what we refer to as statutory commissioners. They are appointed on a fixed term of seven years with the ability to be reappointed once. So they can serve two terms of 14 years total. And then there is a third appointment provision which allows the minister to appoint temporary appeal commissioners. So at the moment we have a chairperson and we have eight temporary appeal commissioners in situ. The reason for that is because of the introduction of a tiered system of grades of appeal commissioners in 2021. This is brought in on an administrative basis and what the intention behind having different grades was to allow for flexibility and allow for kind of different levels of appeal commissioners to be taken on to handle different kind of levels and kind of complexity of appeals. There's a very vast kind of diversity of appeals received. They can be anything from a few hundreds of euros to billions. So that is the reason why we brought in that administrative arrangement of 2021. It has worked very well in reducing the tax appeals commission backlog of cases. And I suppose one of the purposes of this proposed legislation is now legislate for those grades. And that would mean that as part of it and it's in the general scheme is there would be a transitionary kind of provision that would allow in situ temporary appeal commissioners to be converted into statutory. So they would move on to the fixed term of seven years and have the possible of renewal. At the moment I think believe most of the temporaries have been appointed on four-year kind of contracts or terms. So the intent would be if this act is enacted that they would transition into being kind of statutory commissioners and they would still be subject to the overall kind of 14-year or seven-year cap. There was a comment that making them statutory increases flexibility. That would seem counterintuitive. So at the moment there are eight in situ and I would say that the caseload is being managed quite well. They receive about 1,200 cases a year and they tend to close in or around that amount as well. So you know we do liaise closely with the Tax Appeals Commission about their kind of staff and needs and they will communicate to us if they feel there is a need for additional commissioners. But yeah the purpose would be just yeah we would like to move away from the scenario we're in at the moment where any appointments that do need to take place take place as temporary appointments because there is no legislative basis for you know some of these grades commissioners. Basically in the legislation at the moment you have a chairperson, statutory appeal commissioner and a temporary commissioner. Appeal commissioner, the one that we don't currently have any sitting members of, there's no specification I suppose under those provisions for different grades, different pay, different you know expectations of the role. So that's what we're looking for to provide for in the general scheme here. Okay and I assume I mean you normally deal with corporations and individuals and I would assume from time to time you come across large cases maybe against large corporations, perhaps multi-jurisdictional where you're actually through the transfer pricing or best process you're actually talking to other and negotiating with other tax authorities. That would in my mind seem quite specialised and drawn out. How does that work with the amount and type of staff that you have? Okay I'll just say it's a the chair you know we we're the department finance so we can't speak specifically to I suppose how the chairperson would manage the workload and the cases that come in. There are you know different levels within the um in-situ appeal commissioners um they'll have different backgrounds um a lot of them coming kind of from the legal field but uh I suppose the cases would be assigned on the basis of kind of what kind of specialist knowledge or backgrounds the particular appeal commissioners would have and I suppose if something very kind of unusual come in there would be the possibility of appointing somebody to deal with a specific case um there is a power in the legislation for the minister to appoint um a temporary appeal commissioner to determine a particular case or excuse me particular caseload. Okay so um there is flexibility basically to handle the situation you've brought up. Yeah okay and that is the question yeah thank you that makes sense. I'm just going to add to that sometimes the chair herself uh will take will determine cases as well um based on you know the type of cases that come in sometimes the chair will act as the uh appeal commissioner for a particular case as well. Okay okay yeah understood so then just on the right to have a case held in private uh so it's the appeals commissioner that makes that decision is there an appeals process uh if the uh if the taxpayer doesn't like the result of whether it can be held in private or not. I suppose um the basis of the general scheme is on the back of the advice that we have received from the attorney general um in relation to uh making sure that the tax appeals commission legislation is aligned with the constitution um the concept of of appealing a decision of an appeals commissioner as to whether or not your hearing to be held in public in private sorry is certainly something that we can we can take back and consider as part of the uh legislative process. Okay um just just on that at what stage is the determination made as to whether it's private or public uh is that is that after an appeal has been lodged? The uh so I suppose at the moment the default position is that all the hearings are in public unless either the appeals commissioner decides themselves it should be held in private um or if the appellant requests for it to be held in private. So I suppose in reality the vast majority of appellants make that request for their hearing to be made in private um and that would be done as part of the appeals of lodging your appeal the process of lodging your appeal you would make a request for it to be held in private. So at the same time as the appeal is lodged? Yeah yeah yeah the concern I'd have would be obviously if the appeals commissioner determines if it's public or private it may well uh deter somebody from lodging that appeal in the first place or encourage them to withdraw the appeal and I wouldn't like to see the two caught up together. Yeah I suppose that's something that um um you know we have uh we have engaged with with some stakeholders already in relation to aspects of this and and they are uh things that we will keep under consideration as the bill progresses um the we couldn't I suppose really comment on whether or not it would deter somebody from deciding to to make an appeal and we are progressing the legislation on the basis of the advice that we have been given from the attorney general's office um but we're certainly going to take into consideration all of these uh views. Okay so as it develops you're you're conscious that this could be an issue? It's something that has been um I suppose uh we have engaged we've we've engaged with stakeholders in relation to this um and it's something that has been brought up with us yeah. Okay great thank you maybe just a very quick final question in relation to the fiscal advisory council so the 60 40 split that that actually makes a bit of sense uh and you understand that uh it's what I'll be right assuming that 60 percent of the costs are staff related and that's why that that ratio was chosen. Yep. Okay and is that is that a common funding structure uh I haven't seen it before but uh is it something that's I mean I I can't comment uh more broadly on on other statutory bodies but I mean I would emphasize how small uh IFAC really is uh in terms of there's a council of five members and the secretariat of at the moment six potentially seven um so I think uh when you consider the scale of the body I think that's where where it's reflected and that 60 percent of the costs are attributed to wages. Okay and why HICP instead of CPI? That's how the uh 2012 legislation was written I don't know if we considered moving it on to CPI but I think you know in general it has already moved from 800,000 to almost a million we're looking at a once-off uplift as well as part of this legislation so that they can undertake kind of software development and um some other kind of longer term analytical pieces of research as well and the new indexation will happen off a new base as well so um we would hope that they would have more um comfort before they reach their budgetary ceiling after the legislation's passed. Okay that's great thank you.