Final warnings to 10,000 companies as IRS acts on tax warehouse
At least 10,000 companies risk being kicked out of the tax agency’s debt-storage program if they don’t file their late tax returns within days.
Ax officials are issuing final warnings to companies using the Covid support scheme but have not submitted current documentation – a prerequisite for access to the facility.
About 10,000 letters were issued yesterday in the first tranche of notifications to business owners and their accountants, a spokesman for the IRS confirmed.
Businesses that fail to submit the required documents within 10 days lose the benefits of the program and are forced to pay all their back taxes immediately, with interest of up to 10 percent, even if they have no new liabilities to report.
Accounting bodies are warning members and their clients to take urgent action to avoid ruinous tax bills at a time when many businesses are just beginning to recover from the pandemic.
Revenue’s latest warning comes after an ongoing communications campaign to alert companies to how they can meet their obligations to stay in the debt-stocking system.
A key requirement for eligibility is that all tax returns must be filed, even if the liability cannot be settled or there is no liability. In addition, current taxes are payable when due.
Participating firms were last contacted in late March when they were told how much they owed and whether they had any outstanding statements. This notice gave the companies until April 30 to put their paperwork in order.
Now, a month after that deadline, Revenue appears to have lost patience.
The Consultative Committee of Accountancy Bodies in Ireland (CCAB-I) pleaded for an April deadline extension due to the heavy workload members have endured during the Covid crisis, but their request was rejected by Collector General Joe Howley.
“The requirement to quantify debt monthly by filing declarations due was almost the sole condition of eligibility for debt storage,” he wrote to CCAB-I.
“It was not unreasonable to expect that companies should meet this requirement.”
Treasury Secretary Paschal Donohoe himself extended the program in January to allow some 21,000 companies hit by Omicron restrictions to park tax debt that had accumulated until the end of April.
More than 97,000 companies currently owe €3 billion in deferred taxes accumulated over two years by Covid-19. The Ministry of Finance has estimated that around 800 million euros will ultimately not be repaid.
Most companies will owe nothing before January 2023 as debt will be stored interest-free for 12 months before it becomes collectible, although companies can pay at their discretion in the meantime.
The IRS this week updated its tiered payments regime to allow taxpayers in the system to consolidate banked debt with other tax liabilities for easier administration and transparency.
https://www.independent.ie/business/final-warnings-to-10000-firms-as-revenue-acts-on-tax-warehousing-41697152.html Final warnings to 10,000 companies as IRS acts on tax warehouse