Just as this Party stands for justice and fair dealing between this country and its neighbours, so too we believe that within the State justice should be extended to all classes of citizens alike, and that no man, be he rich or poor, should be subjected to undue aggression or unfair measures at the hands of those who are called upon to administer the law. When, therefore, continuous representations are made to us that the Revenue Department of the Government in its dealings with the income taxpayer is over-riding the law, we are bound to raise and ventilate these charges in the House, and, if they are sustainable, to press them home on the Minister.
In what I have to say I shall from time to time have to refer to the Revenue Commissioners, but in that connection I should like to make it clear that my remarks have no personal reference to them whatsoever. We on these benches realise, as I am sure the general body of taxpayers realise, that they are merely doing their duty and giving effect to the policy laid down for them by the Executive Council. In this matter it is the Executive Council, through the Minister for Finance, which is the real driving force. Whatever hardships have been inflicted, whatever wrongs have been done, it is the Executive Council which is responsible.
In introducing his Budget in 1928, referring to the proposed new measures of which the country so bitterly complains to-day, the Minister said:—
"For this coming year we propose to get a substantial part of the extra income required by a resort to expedients which will give us revenue for one year only. We intend to speed up the collection of abnormal arrears of income tax."
And the Minister has been as good as his word. It is true that he has not used the thumb screw and the rack, favourite devices in mediæval days for extracting revenue, but, short of these physical instruments, there is no procedure to which the Minister has not had recourse, in order to secure the extra sums which he cuphemistically describes as "abnormal arrears of income tax."
From inquiries which I have made, I am perfectly satisfied that large sums of money described as "abnormal arrears" have been in many cases nothing of the sort, have been simply blood money which harassed and broken men have paid to escape an even more unbearable victimisation. The Minister smiles. It is no laughing matter for the men who have been put out of business by the Minister's Department, no laughing matter for the men who have been ruined in health, mentally and physically, no laughing matter for the country and for the industries which have suffered because of the enormous and unjustifiable sums which the Minister has extracted from them. It would scarcely be correct, I suppose, to describe these payments as blackmail, but the methods which have been adopted to secure them are similar to the methods adopted by those who extort such unwilling tribute.
For the purpose of pursuing the policy which he enunciated in 1928 I believe the Minister set up within the Department of the Revenue Commissioners a special Inquiry and Investigation Branch. It is not certain what instructions the responsible heads of this department have received. I doubt, indeed, whether these instructions have been committed to writing, but it may be assumed that contained in them is a general formula for the extraction of blood from a stone. Naturally, such an arduous undertaking requires unusual methods, and it is not surprising, therefore, that in pursuing their peculiar activities the heads of this department do not hesitate to exceed altogether their powers under the law. A favourite device of those who are engaged in collecting these abnormal arrears of income tax is to summon taxpayers to interview them in connection with cases about which there has been a dispute. These summonses generally take the form of a letter more or less in the following terms:
A personal interview is necessary with you in connection with incorrect returns of your income made by you for a number of years. Unless you are prepared to facilitate us in securing correct details of your capital at January 1, 1914, and your profits for each year since, we shall have to institute penalty proceedings against you.
The first point to note in connection with this letter is the allegation, in some cases, at any rate, unfounded, that the recipient has made incorrect returns for a number of years. Now the position of this special department is a peculiar one. In the letter which I have just read it is clear that the body in the position of accusers or prosecutors has laid a charge of misstatement and possibly fraud against the individual to whom the letter is addressed. This individual is summoned to appear before them. There is no intimation in the summons that the individual who receives it is not bound to respond to it, nor that he may take legal advice in connection with it.
In 99 per cent. of the cases those who receive this summons present themselves for the interview under threat of the Special Investigation Department that they will have to institute penalty proceedings against them if they do not appear, and I am told that they are asked to give information to these men who are their accusers, and some of whom, as I will show shortly, will be their judges, which under the income tax law they are not bound to give. I am told that in some cases questions have been asked relating to transactions dating so far back as 30 years. Questions as to the taxpayer's capital when starting business were asked; information is required as to the amount of his annual drawings, as to any gifts or settlements made to children, as to investments at various periods. He is told that his accounts will have to be audited by an auditor whom the Department will suggest. Information as to his various bankers and an inspection of various pass-books are demanded, and certified bank returns in many cases are asked for. All these inquiries, I am informed, are illegal. Nevertheless they are persisted in, and as a result of them a good deal of data which the Commissioners would not otherwise secure is furnished to them and enables them to put undue pressure on the taxpayer.
I have mentioned that the Commissioners in their letter appear first of all in the role of accusers. During the interview they assume the role of investigators. We shall see later that, in due sequence, they assume the role of judges, so that the income taxpayer eventually appears before a tribunal upon which there sit, in one and the same person, not only the judge but the prosecutor and the detective. What sort of justice has he to expect from such a court?
I have said that many of the inquiries which are put at these interviews relate to information and to particulars which the Revenue Commissioners are not entitled under law to demand. The only information which a taxpayer may be called upon to furnish is that provided for in Section 139 of the Income Tax Act of 1918. This section reads:
If the General Commissioners have received notice of appeal against an assessment made by the Additional Commissioners, or see cause to allow the objection of the surveyor to any such assessment, they shall issue a precept to the appellant ordering him to deliver to them, within the time limited by the precept, a schedule containing such particulars, for their information, as they may demand under the authority of this Act respecting—
(a) the property of the appellant; or
(b) the trade, profession, employment or vocation carried on or exercised by him; or
(c) the amount of his profits or gains, distinguishing the particular amounts derived from each separate source; or
(d) any deductions made in arriving at his profits or gains,
which particulars the said general Commissioners are hereby empowered and required to demand at their discretion whenever the same shall appear to them necessary for the purposes mentioned in this Act.
It will be noted that the information to be furnished under this section is definitely limited both in form and in content. It is to be furnished in the form of a schedule, a mere list. There is nothing in the section empowering the Commissioners or any other person under the Act to ask for certified bank accounts, audited accounts or vouched accounts in any form, and therefore any which may be asked by the Revenue Commissioners or by their representatives, is something which they are not entitled to get, and which ought not to be given.
I have said that Section 139 is the only section under which the General Commissioners—there are no General Commissioners in this country, but there are in Great Britain—were entitled to issue this precept. The extraordinary thing, however, is that this is the one section which the Revenue Commissioners hesitate to invoke. I think that they very rarely issue a precept. They are very glib and very emphatic about the penal sections of the statutes, and these are always kept before the minds of taxpayers, but Section 139 of the Act of 1918 is one to which they very seldom have recourse. Why? Because this section has been very strictly interpreted by the Courts, and the powers of the Revenue Commissioners under it have been very strictly limited. But yet it is the law, and anything done by the Revenue Commissioners beyond it is outside the law, and should not be condoned or connived at either by the Minister, by this House, or by any Deputy, even by Deputy O'Connell. It may be that for the purposes of the Minister the powers given by the law are insufficient, but if so, his remedy is to amend the law, not to break it.
In the course of his speech on the Second Stage of the Finance Bill, the Minister animadverted upon my statement that the Revenue Commissioners were concealing from the taxpayer the fact that under Section 140 a person who has delivered a wrong statement as to income may rectify the same, and thereafter is not liable to any penalty proceeding by reason of his wrong statement. The Minister attempted to justify the action of the Commissioners in trading upon the general ignorance of the taxpayer in this regard by imputing that in general the delivery of a wrong statement is due to a fraud, and therefore the generality of the taxpayers who have for one reason or another made wrong statements are excluded from the benefits of this section. Arising out of this, it is interesting to note the general allegation of deliberate and malicious fraud which the Minister levels against the taxpayers of this country.