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Press Release - 13 November 2002 (Special Report Clarification)

Press Release - 13 November 2002 (Special Report Clarification)

Ombudsman Special Report: ' Redress for Taxpayers'

Clarification

The Ombudsman, Mr Kevin Murphy, wishes to correct the impression being created that, in his recent Special Report to the two Houses of the Oireachtas, 'Redress for Taxpayers ', he recommended that interest should be paid to taxpayers generally. This is not so. His recommendations related solely to cases where refunds arose as a result of maladministration on the part of the Revenue Commissioners. In other words, compensation would only be payable where the Revenue Commissioners were solely or significantly at fault. The cost of his recommendations, therefore, has no relationship whatsoever to the �4 billion of annual refunds quoted by Revenue. The cost would simply depend on the number of cases where Revenue get it wrong.

To put this issue in perspective, in the year 2001, the Ombudsman examined 96 complaints against the Office of the Revenue Commissioners. In only 28 of these complaints was some degree of maladministration established. Given that many of these cases would not have involved a rebate of tax, it is very clear that the question of a compensation payment would have arisen in very few cases and that, therefore, the implications on an ongoing basis for the Exchequer of a system of compensation are minimal. In the case of the compensation scheme operated by the Department of Social and Family Affairs since 1986, costs for 2001 have been described by that Department as 'not very significant'. This is in the context of total scheme payments of approximately �9 billion by that Department in 2001.

The Ombudsman welcomes the commitment of the Minister for Finance to study the Special Report in detail. He has every confidence that such a study will confirm his position and will demonstrate, despite Revenue's claim that they have no statutory authority to pay interest, that they have done so in cases 1 similar to those of the public service widows described in the report. Such a study will also establish that the claim by the Revenue that the UK Inland Revenue compensation scheme is a statutory one is not true; they have an ex gratia compensation scheme. 2

For further information please contact Matthew Merrigan at Telephone no 01- 6395613 e-mail: matthew_merrigan@ombudsman.irglov.ie

c.c. Mr Charlie McCreevey, Minister for Finance
Mr Richard Bruton TD, Spokesman for Finance, Fine Gael
Ms Joan Burton TD, Spokesman for Finance, Labour Party.