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Annual Report of the Ombudsman 2008 (text version)

4.2.1 Selected Cases - Dispute about a tax payment resolved

I received a complaint in relation to interest of €9,810 charged on late payment of tax by a self-employed man in respect of his 2005 income tax liability.

The complainant alleged that he had lodged the money by electronic means, to his bank current account, in good time for the payment to be made to the Revenue. However, due to a genuine error on the part of the complainant or his agent (the entry of an incorrect payee bank account number) the payment had not gone through at the appropriate time. He said that there was no advantage to him to delay the payment because the money was already lodged to the bank account for that sole purpose and that the Revenue failed to notify him that the payment had not been received. He contended that the Revenue was acting unreasonably and that they were penalising him for problems which had arisen in relation to previous payments and which had arisen for reasons beyond his control.

The complainant had raised the matter with the Revenue on a number of occasions. He had also requested a formal review of the decision to pursue the interest charge in question and this review, which involved an external reviewer, upheld the decision.

The Revenue’s report to my Office set out the facts of the case from their perspective. They continued to justify the levying of the interest charge. The grounds were that the complainant was sent two notifications in relation to the Revenue's non-receipt of the payment, which he had not acted upon. When I requested copies of the notification letters which the Revenue said they had issued to the complainant, they were unable to supply these.  However, they did provide the dates on which, they indicated, the letters had issued.

I then sought a copy of the Revenue computer records to see if there were concrete contemporaneous records to show that the letters actually issued. The Revenue responded that no such records existed, as the issuing of the letters was a manual process. The Revenue stated that the dates they quoted, on which the letters purportedly issued, were in fact, the dates on which the letters in question would have issued if the manual procedure was followed correctly.

Given that the complainant strongly contended that he had not received the letters in question, and that the Revenue could not show that the letters in question had in fact issued, I requested the Revenue to consider refunding at least a substantial proportion of the interest charged. After due consideration, the Revenue agreed to refund €8,576.81, retaining €1,233.38 on the basis that the date on which the complainant attempted to initiate the payment originally was, according to the Revenue, two weeks later than the due date. However, the complainant subsequently advised my Office that, in fact, the date on which he had initiated the payment was in accordance with the due date agreed by the Revenue with the complainant's agent. The Revenue agreed to refund the interest charged in full.

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