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Revenue chairwoman apologises for distress caused by pensions letters

Josephine Feehily acknowledges that the Revenue Commissioners caused ‘confusion and distress’ to many Irish pensioners.

Josephine Feehily:
Josephine Feehily: "We caused confusion, we caused distress to some people, and I am extremely sorry for that."

THE CHAIRWOMAN of the Revenue Commissioners has apologised for the distress caused to over 100,000 pensioners by letters it wrote advising them that they may face an extra tax bill this year.

Answering questions at an Oireachtas committee meeting in Leinster House this afternoon, Josephine Feehily said the distribution of letters to 115,000 pensioners in the past weeks caused unnecessary confusion to many of the recipients.

“We caused confusion, we caused distress to some people, and I am extremely sorry for that,” she said.

Feehily was responding to TDs’ queries on the circumstances that surrounded how Revenue wrote to the 115,000 pensioners – 30,000 of whom were told they had never reported their state pensions to the Revenue for taxation purposes.

Another 85,000 people had reported their pensions, but had either under-reported the value of their pensions, or had seen their financial circumstances change without the Revenue’s knowledge.

Feehily said that while it was unlikely for people with arrears tax bills to face penalties – with penalties only likely in cases where someone submitted a fraudulent tax return – it was impossible for the Revenue to waive any interest that might be due.

The impersonal nature of the letters sent to pensioners, she added, was a result of time pressures – explaining that the Revenue became aware of the discrepancy between its records and those of the Department in the last weeks of last year.

Feehily explained that the Revenue had tried to resolve the discrepancy and to put the appropriate arrangements in place before January 1, when the new tax year began.

It would have taken “months” for Revenue to write to each pensioner outlining precisely how much of a tax liability each might face – by which time some pensioners would be in even further arrears.

Feehily said a “judgement call” had been made to write to each pensioner directly, rather than issuing public advertisements detailing its activities, because the latter could have caused unnecessary panic to many pensioners with no outstanding liabilities.

The Revenue’s immediate priority was to refund the 20,000 pensioners who had paid too much tax, because their income had been overstated, after which it would issue tax credits to the 15,000 people who may be forced to pay a small amount of tax which can then be refunded.

Feehily declined to comment on how aggressively Revenue might pursue claims for small amounts of unpaid tax, but remarked that it may not be a good use of staff resources to recoup small obligations from some people when staff could instead priotise other tax defaulters.

Last year the Revenue recovered interest and penalties worth €414.9 million through 11,000 audits – an average of €37,000 for each – and Feehily said her staff would be better deployed at auditing cases like these instead of chasing pensioners for relatively small amounts.

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Gavan Reilly

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