Late submission by tax agent - what to do?

[Pablo]

Hello,

I'm in a very frustrating sitation and I would need some advice on how to best proceed.

In 2007 I paid prelimary CGT on the sale of some shares. The payment was in USD, and due to exchange fluctuations, the final CGT calculations showed that I overpaid around 1000 eur.

In September/October 2008 I asked Cornmarket/Midas to help me file tax returns for 2007. I submitted all the information to them, signed forms, etc.. and got reassurances everything was filed (I had to chase them quite a bit, though - very frustrating).

In October 2009 still hadn't heard anything back from revenue re. my 2007 tax; I contacted Midas which said they would contact revenue to see what was the story. A couple of weeks later, I received a notice of assessment where my 1000 eur overpayment was taken into account, but I was charged a penalty of around 1400 eur for late submission of returns - therefore I was due to pay 400eur more. I called revenue and they told me they only received the returns the week before (short after I had contacted Midas again).

I then called Midas which claim this must be all a mistake from Revenue and that they did submit all forms in time back in 2008, etc. I suspect they didn't (and so claims revenue) but they have engaged a process of appeal (now on a second appeal) on my behalf which is now taken almost three months.

In the meantime I've had to pay those 400eur to avoid trouble with Revenue.

You can imagine how frustrating this is. I've mailed revenue with details but I still haven't heard back.

Ideally the situation would clarified with Revenue and they'll refund me, but as time goes by I'm less and less hopeful. Should I wait until these long appeal processes (the first appeal got rejected it seems, they filed another one) end or should I claim compensation from Midas for mishandling my tax returns? If so, what is the best way to do so?

Any help and advice will be greatly appreciated.

Thanks,
Pablo

 

[Graham_07]

If the return for 2007 was only filed in approx. October 2009 then it was clearly late. The taxpayer has ultimate responsibility for this even if an agent is engaged. If there are no extenuating circumstances ( and an agent forgetting to file is not one of those ) then I do not see how any appeal can succeed. Revenue are entitled to levy the late filing surcharge of 10%.

However, if you have a letter of engagement with the agent which shows that they contracted to file the returns on your behalf and if they are a member of a regulated body with professional indemnity insurance then you may have cause for action against them for breach of the terms of the engagement.

 

[Pablo]

Thank you Graham - do you (or anybody) have any suggestions on the best (most effective) way take action against them? They acknowledge I provided the information on time etc but also claim they did file the returns in time.

If anybody has had a similar experience or know what are the usual channels for this type of complaints, I'd appreciate any guidance.

Thanks, Pablo

 

[Graham_07]

If they claim they filed on time then presumably they have evidence of this. Any successful appeal against Revenue's assessment would depend on it. Can they supply you with this evidence?

As to channels, normal would be via their professional body in the first instance.

 

[Setanta12]

The vast majority of returns these days are filed online, and a record is kept by 99% of firms showing successful uploading - has the firm got this proof ? When does Revenue say it was uploaded ?

If paper-filed, did you sign the return ? You say you supplied information - you didn't say they compiled the return and you then signed it, returned the Form to them and they filed it. Did they make a return in your name that you didn't sign yourself - that is a big No-No and makes them more culpable/negligent.

 

[Bronte]

In 2007 I paid prelimary CGT on the sale of some shares. , the final CGT calculations showed that I overpaid around 1000 eur.


In October 2009 still hadn't heard anything back from revenue re. my 2007 tax; . A couple of weeks later, I received a notice of assessment where my 1000 eur overpayment was taken into account, but I was charged a penalty of around 1400 eur for late submission of returns - therefore I was due to pay 400eur more.

If you overpaid tax then I thought you couldn't be charged for late filing as the late filing is a percentage of the tax owing?

 

[paulpd]

As far as I know, the surcharge for late filing is on the tax charge, as opposed to the amount owing.

 

[Graham_07]

If you overpaid tax then I thought you couldn't be charged for late filing as the late filing is a percentage of the tax owing?

It's on the tax before any payments on account.

Say Tax Due €1,000
late surcharge €100
Total due €1,100
Paid on ac €1,400
overpaid € 300

 

[Pablo]

The vast majority of returns these days are filed online, and a record is kept by 99% of firms showing successful uploading - has the firm got this proof ? When does Revenue say it was uploaded ?

If paper-filed, did you sign the return ? You say you supplied information - you didn't say they compiled the return and you then signed it, returned the Form to them and they filed it. Did they make a return in your name that you didn't sign yourself - that is a big No-No and makes them more culpable/negligent.

Yes, I signed and returned to them a Form 11 back in 2008. I have a photocopy of the signed page.

 

[Graham_07]

Yes, I signed and returned to them a Form 11 back in 2008. I have a photocopy of the signed page.

If you have a copy of the signed / dated page of a ROS form then proof of submission is instant on the agent's inbox. Either they did or they didn't. Clear cut.

If it is a paper form which they then posted, it is more difficult as they can say they posted it, ( but would notrmally not have any more proof of that). Revenue can argue they never received it and it gets messy. In those cases the taxpayer's record of filing and the agents record also of on-time filing may come into play in determining whether the surcharge is waived.

 

[Pablo]

If you have a copy of the signed / dated page of a ROS form then proof of submission is instant on the agent's inbox. Either they did or they didn't. Clear cut.

If it is a paper form which they then posted, it is more difficult as they can say they posted it, ( but would notrmally not have any more proof of that). Revenue can argue they never received it and it gets messy. In those cases the taxpayer's record of filing and the agents record also of on-time filing may come into play in determining whether the surcharge is waived.

Back in September 2008 I signed and sent Midas a pre-filled Form 11, as well as a CGT calculation page. I 'm pretty sure they filed online though; or so they said at the time. I've asked them to send me any documents they have to support the appeal, including any proof of submission. I'm waiting to hear back.

Thanks for all the replies. This is frustrating in so many ways. I've spent so much time, money and energy. I don't even want to think about the fees paid to Midas over the last few years....

ps: Revenue charging a 10% penalty regardless whether there is money owed it is a bit disproportionate I think as well, I think something like a small fine (to encourage prompt filing) + 10% percentage of any money owed (to discourage tax avoidance) would be far more reasonable. Not filing forms is not the same as not paying tax. But that's a different topic of discussion.

 

[Graham_07]

Revenue charging a 10% penalty regardless whether there is money owed it is a bit disproportionate I think as well, I think something like a small fine (to encourage prompt filing) + 10% percentage of any money owed (to discourage tax avoidance) would be far more reasonable.

Unfortunately, penalties need to be significant enough to encourage prompt filing. In the UK I believe the late filing penalty is £100. This may not be enough to discourage late filing. Here, since the penalty is directly related to the tax originally due, the incentive is high for high liability taxpayers to file on time. Of course, the opposite also applies in that if one anticipates a low or nil liability then those taxpayers may not see any incentive in filing on time.

Be interesting to see how you get on with the copies of the submission. Keep us posted.

 

[Domo]

In the UK the late filing penalty is €100, but there are also surcharges (5 and 10%)based on the tax outstanding, plus automatic interest on tax, penalty and surcharges.

 

[Bronte]

Of course, the opposite also applies in that if one anticipates a low or nil liability then those taxpayers may not see any incentive in filing on time.

.

Yes this is true, in the past I had zero liability and I was really late submitting the returns as I knew I wouldn't get penalised.

In relation to revenue and other state bodies, I only send documents to them by registered post as far too many documents go missing. I believe there is a proof of postage system in An Post which costs zero but not sure if it still exists.

 

[Graham_07]

In relation to revenue and other state bodies, I only send documents to them by registered post as far too many documents go missing. I believe there is a proof of postage system in An Post which costs zero but not sure if it still exists.

The only really reliable way to file and pay Revenue is ROS. Instant acknowledgement of the document filed. At least a couple of times a year we find clients getting demands for paper returns apparently not filed , say a VAT return & find that they did post it, with a cheque, the cheque isn't cashed so gone missing somewhere. Also we have had cases where the return and cheque were posted together , Revenue got & cashed the cheque but said never got the return...which was in the same envelope. We now file 100% of Income Tax and Corporation Tax returns on ROS, no exceptions. We also file the majority of P-35 returns on ROS.

I think the proof pf postage is still around. There used to be a booklet you could get to have stamped with the document details on each time you posted something and you kept the pad like a diary. Not sure if that still available thought.