CCAB-I Response to Revenue's Consultation Document - Proposed Extension of Mandatory e-Filing/Payment

ireland

Chartered Accountants House
47-49 Pearse Street
Dublin 2

Mr Kevin Mulkerrins,
Planning Division,
Office of the Revenue Commissioners

BY E-MAIL

31 August 2010

Dear Mr Mulkerrins

We refer to Revenue's invitation for submissions on its consultation document - Proposed Extension of Mandatory e-Filing/Payment.

1. Overview

While the Revenue consultation document speaks of real and tangible benefits for taxpayers, simplification and an extrapolation of one of the recommendations of the Commission on Taxation, we appreciate that the real reason for seeking universal mandatory eFiling is to save public service costs.

We acknowledge that Revenue possibly has the worst of both worlds where filing and payment are de-coupled. It is considerably more time consuming for the Collector General's office to deal with a hybrid electronically filed return and a cheque payment than an electronically filed return and an Electronic Funds Transfer.

It is in the interests of the accountancy profession that Revenue operates efficiently, as Revenue inefficiency is a driver of taxpayer compliance costs. Therefore CCAB-I is not hostile to electronic filing and payment. The purpose of this submission is to point out some of the operating issues with the current Revenue Online Service (ROS). These give rise to practical difficulties for our members that Revenue must consider before extending mandatory electronic filing and payment as outlined in the consultation document.

It is also necessary to point out that not every taxpayer avails of the services of an accountant and may not have the necessary connections nor equipment to comply with a mandatory electronic filing requirement.

2. Technical Infrastructure

Revenue has stated that the benefit of online services for taxpayers and agents includes greater accuracy, speed and convenience. While this may be true for many of our members, it must be acknowledged that there are members who work from home or in offices in areas which have inadequate broadband service or no broadband service at all.In many rural areas, the infrastructure needs to be upgraded first to provide the technology necessary to provide broadband. Taxpayers living in these areas could be waiting for some time before adequate broadband service is available – the work of the National Broadband Scheme refers.

The Regulations, which will be made following this consultation, must address this issue by allowing for exclusion of persons from online filing and payment, and should not be made independently of the National Broadband Scheme rollout.

3. ROS Service

Revenue's consultation document states that the take up of on-line services allows greater focus on taxpayer support and compliance, but this focus demands provision of sufficient support for ROS customers. Past evidence suggests that there can be a lack of ROS support, combining expertise of a tax technical nature and IT problems. If Revenue intends to provide an on-line service that produces real and tangible benefits for taxpayers, their agents and Revenue itself, it follows that Revenue provide a support service with the relevant expertise and knowledge.

But Revenue has noted in the consultation document that resources are “increasingly scarce”. Members are thus concerned that Revenue will not be sufficiently staffed to provide the necessary ROS support. Extra resources are required within Revenue to support agents and taxpayers with the additional responsibility imposed by extended mandatory e-filing and e-payment, for example, one point of contact for ROS assistance. CCAB-I acknowledges that issues pertaining to ROS are discussed and often resolved through the quarterly TALC Collection forum.

For more general issues affecting a broader spectrum of taxpayers and especially where development work was needed, Revenue had provided a ROS Project Manager. This was an important and effective point of liaison for the representative bodies, and the position should be re-established as universal eFiling becomes mandatory.

4. Improved ROS Facilities

We acknowledge that certain ROS enhancements have taken place since the beginning of the year and that ROS now provides the facility to amend certain features of a Form CT1 and a Form 11. However, before phase 3 of the proposed extension is implemented, ROS needs to be enhanced further to provide a facility which will allow the agent to:

View returns submitted by a previous agent and to amend such returns as necessary. Currently the client set-up takes approx 2/3 working days. In order to view and amend returns requires several phone calls to Revenue. This is time consuming and costly for agents.
Make amendments to payments and direct debit instructions and to easily reverse errors on payment transactions. The most common examples of situations where this is required are:
1. If there is a change to the client's direct debit details on the due date which results in a tax payment being debited from two bank accounts. We are aware that Revenue will currently facilitate the amendment of direct debit details if such an amendment is requested before the due date but no such facility exists if the error is discovered on the actual due date.
2. An overpayment of tax may be put through on ROS in error. Again Revenue currently facilitates the amendment of such an over-payment if requested in advance of the payment date but no such facility is in place if the error is discovered on the payment due date or after the payment due date. Revenue has arranged repayment in some cases but this involves a very complicated process of reversing the debit instruction with the client's bank and is dependent on locating the Revenue officer with authority to allow such a reversal.
3. The breakdown of the ROS system in the middle of a transaction has also resulted in instances of payment error i.e. agent may put through the payment twice or may not successfully put through the payment at all. As such breakdowns tend to arise on the deadline date, there is currently no facility to easily rectify such payments errors or avoid the imposition of interest on late payments.
Amend the accounting period date on the return. Agents should be able to amend the accounting period date of returns. Members have reported problems if the ROS dates do not match the return period. If the information is incorrect, this can also cause problems when agents attempt to file preliminary tax declarations.

5. ROS Payment Options

Under the new Capital Acquisitions Tax e-filing system, agents cannot make a payment on behalf of their client by ROS Debit Instruction (RDI). The only option available is to make the payment by laser card. However, solicitors and individual taxpayers can make payments by laser or by RDI.

CCAB-I understands that Revenue's systems will not allow the agent to avail of the RDI option as the system cannot assign an agent certificate to a taxpayer for CAT purposes. If an agent wants to avail of the RDI payment option, they must use their business certificate.

Tax agents must have the same payment and filing options as available to other persons under mandatory e-filing and e-payment. Tax agents should be able to pay and file using their ROS agent certificate. Restricting agents to using their business cert in order to avail of the RDI option will leave the businesses own tax affairs accessible to all staff with ROS access rights.

If the extended mandatory e-filing and e-payment is to be fair, Revenue must revise their systems to allow tax agents the same pay and file options as other ROS customers.

6. Fraud Control Procedures

Revenue will have to offer further control procedures and assurances to safeguard the agent from fraud issues i.e. internal fraud or outside hackers into the system resulting in the theft of bank details of clients.

7. Consultation

The introduction of mandatory e-filing under Phase 1 and Phase 2 can be characterised by a lack of response to concerns raised by the practitioner bodies during the consultation period. We hope that this would not be the case on this occasion.

We trust that you will consider the issues covered in this submission. If you would like to discuss further, please contact myself or my colleague Kimberley Rowan.

Yours sincerely