Remember that there are several types of irony (situational, dramatic, verbal, etc...). However, the major irony we are dealing with here is the situational irony: the idea that what we expect as readers is not the result we get at all (we don't expect a fire truck to be on fire, hence, situational irony).
So, in the case of O'Flaherty's "The Sniper", which takes place in the middle of Dublin along the Liffey River, during a time of civil war, the ironic twist at the end is what most turn to and what is most memorable. Clearly, the Republican sniper the narrator follows is supposed to eliminate enemies and threats. However, the threat he elminates is his own brother, and the reader does not expect that. We don't expect the protagonist to have such a close, personal connection to the figure he kills, a figure he regards as a "good shot", like himself. And from that we can infer that they grew up learning to shoot together.
Another instance of situational irony is the "old woman," the informant for the enemy which he kills. We don't expect an old person to take an active role in a civil war such as this. But her cover makes sense, since no one would suspect her of dealing with the enemy, and many would quickly and easily dismiss her. However, our sniper guns her down, something we might not necessarily expect as well.
Liam O’ Flaherty employs situational irony throughout his short story "The Sniper." Situational irony is when the audience does not expect an outcome in a story. At the beginning of the story, the sniper is described as being a man who is used to seeing death and feels too excited to eat his breakfast. After he outsmarts his enemy and kills him, the sniper is immediately filled with joy. However, after the enemy falls to the pavement, he feels remorse and guilt to the point that he begins cursing the war. The audience does not expect this dramatic emotional change to happen when the sniper is disgusted at his actions. The audience does not expect that a battle-hardened soldier who is excited about fighting would find war so revolting and be filled with such remorse.
However, the most obvious example of situational irony takes place at the end of the story. The sniper lays next to the dead enemy soldier and finds out that he has killed his brother. This ending surprises the reader and is an unexpected outcome.