The immediate advice from IFAC Accountants’ head of tax Declan McEvoy to farmers who received aspect query letters from the Revenue last month is to accept the request to make contact with 21 days.

“Everyone should ensure they get a letter to the Revenue Commissioners by Friday to acknowledge that they will engage with them,” McEvoy said.

Following those initial letters, Kerry suppliers who benefited from patronage shares in recent years are expected to receive tax assessments from the middle of next week. Their delivery could continue right up to Christmas, presenting a most unwelcome “letter from Santy”, McEvoy added.

McEvoy said it was unclear whether the assessments would cover only 2011, to meet the usual four-year deadline Revenue sets itself to recoup unpaid taxes, or include 2012 and 2013, which were also listed in aspect query letters. “They might include 2012 and 2013 if they want to bring things to a head,” he said.

The tax assessments are the documents against which farmers can lodge an appeal within 30 days. IFAC supports the view shared at a meeting of Kerry Co-op and individual farmers’ tax advisers last Thursday, and by the Tax Institute on Friday, that farmers should bring the assessments to the Tax Appeals Commission. According to McEvoy, there are two grounds to appeal the Revenue’s interpretation that patronage shares constitute taxable trading income at their market value during the year farmers bought them.

“The first ground would be is it income or capital?,” he said, adding “that would be the weakest argument”. The second one is the valuation given by the Revenue. “The shares are not sold on an open market,” McEvoy argued. If they were, a lot more shares would be available for sale, pushing the price down.

The Tax Appeals Commission was only established this year. “We’re in a new appeals regime and we don’t know how long it will take. If there are large numbers, they could be fast-tracked,” said McEvoy.