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Dáil Éireann debate -
Friday, 6 Jun 1930

Vol. 35 No. 6

Orders of the Day. - Vote No. 6—Office of the Revenue Commissioners (Resumed).

When I was comparing the treatment yesterday or the attitude of minds adopted towards different kinds of persons I suggested that they were all regarded as outlaws. Deputy O'Connell apparently misunderstood me and thought I referred to him as saying something about George Gilmore. I wish to start off by removing any misapprehension that may be in his mind. I am sorry he is not here, but I told him I would put it on record that I did not associate the attitude of mind towards George Gilmore with him. The attitude somehow or another is that the law is to be applied towards some people in one way and towards others in another way. It is to be strained against the persons who have to pay income tax, and in that matter Deputy O'Connell seems to be sympathetic and to aid and abet the severe interpretation of the law, especially against persons, who are the richer persons, who pay income tax. And he seemed to take special pleasure, considering the troubles of those who have been forced to pay large sums of income tax. He said that where the smaller people with salaries have been forced to pay income tax he has not much pity upon the richer people who had also to pay income tax. I suggest that the law must be the same for all. If Deputy O'Connell wishes to advocate a capital levy that is a very different thing. It should be done, however, as a direct thing and not in the dishonest way of capturing as much as they can by the inquisitorial methods of the income tax collectors.

I hope Deputy O'Connell will be in before I finish because there were one or two other criticisms which I would prefer to make if he were here. The laws of income tax are very complicated; the forms are very complicated. Persons getting these forms and being called to pay income tax are in great trouble because of their ignorance of the law, and necessarily so. Some of the collectors trade upon their ignorance. They ask people for more than they are entitled to ask for. They take every advantage of lapse of time for enforcing the clauses with reference to the time limit very strictly and they ask questions which they are not entitled to ask. There is no legal remedy for that.

Deputy O'Connell suggested that if the income tax collectors exceeded their legal powers there is a remedy against them. There is no remedy against an income tax inspector who asks a man where he got his grama-phone and a number of other similar questions, which the man will probably answer because he does not know that the official is not entitled to ask such questions. I heard of a curious instance very recently where a solicitor applied for a certificate showing that all taxes had been paid on certain property. By law the Revenue Commissioners are bound to supply that certificate when it is applied for on the sale or purchase of a piece of property. The application was made, there was a delay, and there was a conversation in which an official had the audacity to say that he did not believe that the property was being sold at all, and he wanted to have it proved. One can imagine the feelings of a solicitor, whose mind is full of the details of a particular transaction, when a red herring like that is dragged across the trail at the moment he is carrying through a sale. Business would become impossible if at a particular stage an official could raise difficulties like that. If the law states that such a certificate shall be given it should be given automatically when a solicitor applies for it. A solicitor will not, for the sake of his health, ask for a certificate in respect of property about which there is no business transaction. It is that inquisitorial attitude that is most resented, and it has a bad effect, because the drift of public opinion is unsympathetic with the collection of income tax. It regards abuses as things that one can connive at, and that is largely due to the fact that it is felt that the collection is not being carried out in as fair-minded a manner as it should be.

There is no doubt about it that the absence of such an institution as special commissioners makes a very great difference, and I hope that, as an outcome of this criticism, in order to place the Revenue Commissioners in a more favourable light, in order to put them right with the community generally, the Minister will consider the introduction of legislation which will provide some impartial person between the Revenue Commissioners and the general public, or some body that would be a substitute for the Special Commissioners.

The Revenue Commissioners are entitled to collect income tax for a period of six years; income tax due before that period is not recoverable according to the statutes. Originally it was three years, but it has been made six years in this country. The answer given by the Revenue Commissioners in these cases is: "Oh, but the rest of it is in the nature of penalties." It may be in the nature of penalties, but such penalties should be imposed by a judicial act and not merely as an administrative act. They exercise a judicial power in these cases that is an excess of their powers under the Constitution. That also will have to be cleared up by legislation, and the sooner it is done the better, because otherwise it may lead to lengthy and expensive litigation, which is not desirable.

It was noticeable that when Deputy O'Connell was commenting upon the collection of income tax and was praising the Inland Revenue Commissioners he ignored altogether the case of an unemployed worker who was put into prison for not paying income tax which he could not pay. It is an extraordinary thing that nothing should have been said by the leader of the Labour Party in reference to the position of workers of that kind. That was not altogether an incidental or an isolated case; there have been other cases, some of which are even on record in the Law Reports, of workers who were punished in a like manner. Perhaps Deputy O'Connell expects that by being a good boy towards the Revenue Commissioners in this matter for his own particular craft— the teachers—he will get special terms, that some kindlier interpretation of the law will be meted out in their case in future. At the same time, I do not think it is fair for a person in the position of leader of the Labour Party to sacrifice the workers or the country generally in the interests of his own craft. Possibly his attitude of almost uncritical support of the Revenue Commissioners will lead to their being even more severe with the teachers than they have been.

I am quite sure that the majority of those in the Department of the Revenue Commissioners want to do the best they can by the country, and that part of their defects in the carrying out of the law is due to the law itself, but there is also a spirit of bureaucracy there which in the end militates against the collection of the tax rather than assisting in its collection by creating a public opinion insisting that everybody ought to pay the tax.

Deputy O'Connell stated yesterday that he noticed I was smiling during Deputy Wolfe's speech. I assure the House that I did smile, but it was not for the reason that Deputy O'Connell thought. The reason I was smiling was because of the exceedingly emphatic way in which Deputy McDonogh agreed as to the accuracy of Deputy Wolfe's statements. There have been allusions to the cleaning of the Augean stables of the Income Tax Department. I have had considerable experience of civil servants in the Estate Duty Office and in the Income Tax Department. They are on the whole, exceedingly courteous officials, hardworking and by no means well paid, but it is regrettable that an exceedingly small percentage of them were not drowned when they were born. However, that percentage is very small.

There is one case that I wish the Minister to take note of, the case of a small income taxpayer who derives his income from a shop and from land. I will not mention any names but I suggest, sir, that you are the owner of a small shop in the country, not in a village but on a country road, and that you are also the proud possessor of a wife and four children. You were directed by the income tax people to make a return of your income. You know that the profits from the shop consist entirely of the difference between the prices at which you buy from one or two wholesale houses and the prices which you can get from your customers. You know that your total annual expenditure with these wholesale houses is under £650 a year. You estimate—and in my opinion overestimate—your income from that shop at £150 a year, and you send in your return. About the month of October you get back a notice stating that they have assessed the profits of your shop at £250, that they have deducted £25 earned income allowance and £225 for your wife, and that there is no income tax to be paid, but that if you desire to appeal you must do so within fourteen days. Why should you appeal when you have no income tax to pay?

About the following January you get a notice informing you that there is £2 4s. 10d. income tax on your land to be paid. That amount is correctly arrived at by taking your Poor Law valuation and deducting the balance of your allowances for the children. You point out that that is all right but that they have already charged you with £250 profits on an outlay of £650, instead of the excess estimate of £150 that you put in. The answer you get to that is that you did not appeal, that the time has passed, and that you must pay the £2 4s. 10d. You consult somebody, I will not say who. He interviews the Income Tax Department and they tell him that the £2 4s. 10d. must be paid because you did not appeal. After some more argument the inspector says: "I am prepared to reconsider this if you send in certified accounts." But if you have paid the £2 4s. 10d. you will not get it back. You must now employ a chartered accountant to make up your accounts at a cost of three guineas to get off paying the £2 4s. 10d., provided you have not already paid it. You can produce your bank book, showing that on 1st January you had £74 16s. 3d. to your credit and that on 31st December you had £35 11s. 3d., and you can prove that your stock is practically the same on 31st December as it was on the previous 31st December—not that that evidence will be accepted by the inspector, apparently, because he requires certified accounts. That system is not fair to the small man who is trying to rear a family—he has now five—and who is quite prepared to pay anything that he is legally liable for. The whole difficulty is that when the officials are sending out assessments for Schedule D they do not send assessments for Schedules A and B, and consequently the unfortunate small man has no reason to appeal against an assessment on which he has nothing to pay.

I am inclined to agree with Deputy Leonard as to the position of many small taxpayers. There are many women running small businesses in the country towns and they keep no accounts. They simply keep a bank book and they do not take stock or balance their accounts. They live on from year to year, making whatever they can out of their small business. These women, when summoned before the Commissioners, do not understand their position very often and they make absurd statements, giving themselves credit for receipts that they never had. Some effort should be made to facilitate these people and prevent them from being victimised, as I am afraid some of them are.

I understand that pressure is being brought to bear on the Revenue Commissioners to restrict the importation of second-hand motor cars from England. We are sending a tremendous amount of money out of this country for motor cars. It is possible to purchase in England second-hand cars in good condition that are quite safe to use and that can be obtained fairly cheaply. I am told that in many cases the Revenue authorities refuse to accept the invoice price of these cars, that they insist on putting a valuation of their own on the cars in excess of the prices paid for them and that every effort is made to hamper their importation. It is not fair that men who cannot afford to pay for new cars and who have to make their living out of the cars they buy by hiring them out should be compelled to pay a tax in excess of the price they actually paid for the cars. Instead of being hampered, they should be facilitated, because we should endeavour to reduce our expenditure on motor cars. The materials for the cars are made outside the country, so the country derives no benefit from the purchase. In the first place, we pay out the capital cost of the car. Then we have to send out money for everything the car uses—petrol, oil and so forth. Every effort should be made to reduce that expenditure Instead of trying to thwart the people who endeavour to economise in the use of motor cars, we should do everything to facilitate them.

If Deputy Goulding, in speaking of the pressure which has been brought to bear on the Revenue Commissioners, refers to representations which have been made to them with regard to the importation of second-hand cars, he is wrong in his information. These representations were not made with the view of prohibiting or even impeding the importation of second-hand cars. They were made only with a view to ensuring that the assessment of these cars for import duty would be carried out on a proper basis. Anybody who knows how the business is carried on is aware that there is plenty of room for fraud with regard to the invoice prices for such cars. A great deal of personal negotiation goes on in London and other cities where these cars are bought. Very often it is the easiest thing in the world to arrange that bogus invoices be prepared.

Motor cars, after all, are not like razor blades, or things of that kind, which can be made up in packets and sold at fixed prices. There is such an excess of these cars in London and other places that a particular dealer is very often quite eager to make a bargain with an Irishman and to facilitate him in getting the car imported even at a much lower price than he has paid for it. The representations that were made to the Revenue Commissioners were made with a view to ensuring that a proper check would be kept on values, because there are other interests—interests which represent a very big capital investment—which would be seriously affected by the too liberal importation of second-hand cars. I do not express any opinion on the general question as to whether or not it is more desirable to import second-hand cars than to import new cars. But I think, in justice to the revenue and in justice to the very big business interests concerned, these representations were justified. I believe they have had a very good effect. I do not think the Revenue Commissioners can attain to such a position that they will be satisfied that frauds such as I have referred to are not being carried on. But I know that since the representations that Deputy Goulding referred to were made there has been a great deal more efficiency with regard to the assessment of cars for import duty purposes.

There are just two cases to which I desire to refer—one illustrating the tendency of the Revenue Commissioners to chance their arm, and the other, a case of what I would consider harsh treatment. In the first instance, a gentleman got a demand for income tax on £100 retainer fee which he was alleged to have from a certain association. He never had such a fee. He wrote across the form, "Who the devil told you that yarn?" He got a reply that the form had been incorrectly filled. He has heard nothing further about the matter.

In the second case, a decree was given by the County Court Judge for £22,000 against a County Council which had determined not to honour any decree for damage done by the Crown forces. The owner of the decree died during the Truce, leaving no assets. I might say that he died a homeless wanderer. His house had been burned, his business had been destroyed, his connection had gone and his sons were out with a flying column. I am sure that that is not a case which Deputy O'Connell would reckon as amongst those of the affluent shirkers and artful dodgers of income tax. The amount awarded by the Shaw Commission in 1924 was £16,000. The Revenue Commissioners now claim that the value of the assets for their purpose is £16,000. If there is any case in which leniency should be shown, I submit this is one. This is the case of a man whose business was destroyed. Who died as a result of the hardship he underwent and whose sons were out with the fighting columns of the I.R.A. Now they want to regard his business as worth £16,000, when the decree against the County Council was not worth twopence in the market.

I should like to refer to a case that was brought under my notice some time ago. It is a case of small contractors who are using certain machines. A doubt arose as to whether they were liable to licence duty or not. The Inland Revenue authorities had also a doubt about the matter, because these machines were being operated for one and a-half years or two years before any licence duty was claimed. In order to test the matter, and have the question settled, they asked the Revenue Commissioners to bring a test case before the courts. The Inland Revenue authorities refused to bring one test case, but slapped 480 summonses against these people. The legal advisers of these people told them that they had a very good case, and would be justified in defending the test case, but that they could not advise them to take the risk of defending 480 summonses. The obvious intention of the Inland Revenue authorities was to stampede these people into paying the licence duty, about which there was a good deal of doubt.

As I understand, there was not really any doubt as to the legal liability in the case to which Deputy Mathews refers. But there were certain difficulties regarding detection, and steps were taken a year ago to remove those difficulties.

Deputy Little mentioned a particular case. I should like Deputy Little to send me particulars of that case, so that I could have it looked into. It is impossible to deal with individual cases in the Dáil, because there is no justification for speaking here about the private affairs of individuals. Even if the Deputy has the particulars, I have not got them and I have no means of getting them.

I suppose the Dáil admired Deputy Jasper Wolfe's performance. I regard it as a great effort, such as he would make in court. He resorted to the well-known device of the advocate whose case is weak—pouring a fair amount of abuse on the other side. In the earlier part of his speech he gave the impression that the whole of the working population of the State was being put in jail in instalments by the Revenue Commissioners, and was being left to languish there for lengthy periods. Since 1st July last, the total number of people who have been put in jail in connection with non-payment of income tax is ten. Of these ten, three were released on the day of arrest; four were released on the day after arrest; one was kept four days; one was kept six days, and one was kept fifteen days. The man who was kept fifteen days was possibly the only one of the lot who was unable to pay. As a matter of fact, he was arrested as the result of local action, without the direction of the Commissioners. I cannot identify the working men to whom Deputy Wolfe referred, though I believe he has made the two appear four by repeating the cases this year, having dealt with them last year.

I stated there were only two. The Minister has already had particulars of the cases and he knows them.

The Deputy dealt with that before. In one case that, I think, was referred to by the Deputy, a man who owed £18 was arrested. It is a fact that that man was out of employment at the time of his arrest, but he had £500 of his own in British War Loan; he owned a house the valuation of which was £42, and his wife was carrying on a business. It is all very well to come here and talk about unemployed men.

Mr. Wolfe

If I may interrupt again, that is not so. There is no use in shying statements of that sort about.

This seems to be one of the cases to which the Deputy referred. It is a County Cork case, and it seems to be the one and only one that will fit the description the Deputy gave. In any case, this man was out of employment. It is the sort of case about which we hear a great deal of talk and in consequence of which we hear the Revenue Commissioners held up to odium. That man owed £18 tax. He was perfectly well able to pay it in spite of the fact that he happened to be at the moment out of employment. I do not think the Revenue Commissioners would have been entitled to do anything else than to take the steps necessary to recover the money. Another of the ten cases mentioned in which imprisonment was resorted to was that of a commission agent for an English firm. He owed the Revenue £300. He was perfectly well able to pay, but had no goods on which distraint could be made. He was, in fact, openly laughing at the attempts to make him pay. When he was arrested he paid promptly. It was one of the clear cases in which an arrest could be made. During the period from 1st July last there were ten individuals out of 70,000 taxpayers subjected to arrest and imprisonment. Of these ten, three were released on the day of arrest, four the next day, one had four days, one had six days and one had fifteen days in jail. There is nothing there to justify all the purple patches to which the Deputy treated us.

With regard to the excise cases about which we also had so many tears, in the last twelve months there have been nine cases of imprisonment in connection with excise penalties—entertainments duty and betting duty. Of these nine cases one was in jail for six days, another was in jail for fifteen days, another for six weeks—the penalty was £500, mitigated to £125—another was in jail for six days, another for seven weeks—the penalty was £3,000, mitigated to £750—another was in jail for five weeks—the penalty was £500 mitigated to £125—another was in jail for two days, another for fourteen days and another for eleven days. Yet we have all this talk about people being thrown into jail and kept there in perpetuity. All this talk about people being kept for life in jail because of non-payment of penalties is the most utter rubbish. Whatever defects there may be in connection with the collection of revenue, they are not helped by these entirely exaggerated notions that are spread abroad.

A case was referred to by Deputy Wolfe yesterday where a District Justice complained merely because a recommendation of his to mitigate a penalty had not been acceded to. The particular Justice seems to have made a personal matter of that and seems to be carrying on a certain sort of propaganda in connection with the legal powers the Revenue Commissioners have in this matter. As a matter of fact there was nothing at all in that case. The man who was fined for evasion of entertainment duty had committed offences in 1923, at a time when prosecutions could not take place. Applications—repeated applications— had been made to him to pay the duty and it was not possible to get the duty. He was then convicted for an offence in 1925 and it was when he was convicted for that offence in 1925, and when he pleaded ignorance of the law and various other things, that the Justice recommended the penalty should be mitigated to £12 10s. by the Revenue Commissioners. The Commissioners, having information about the man which was not before the District Justice, refused to mitigate the penalty, and in my opinion they rightly refused. The District Justice, when an application was made to him later on for the issue of the body warrant, stated that if, at the hearing of the case, the previous record of the defendant as regards the evasion of the tax had been brought to his notice, he probably would not have made the recommendation that he did make. The District Justice, in appearing before the Committee the other day, seems to have forgotten that. He recommended on the body warrant that the man should not be kept more than four months in jail. As a matter of fact the man was released in three months. There is really nothing at all in the case with which Deputy Wolfe tried to harrow us.

In another part of his statement Deputy Wolfe talked about the way priests were being dragged before the Revenue Commissioners. The practice of the income tax authorities for several years past has been that if the return made by any clergyman appears to be anything like right on the face of it, no question is asked; no question is raised and there is no attempt to prove that the amount ought to be £25 or £50 more than it actually was. If the return is such that anybody could accept it as having been made with a clear understanding of what the return was, there is no question in regard to it. There are people in the country who still seem to have the opinion that income is the amount you have over after paying your living expenses during the year, and when a return is made showing an income of £50 or something like that, it is not accepted. There have been cases, and there are cases still coming in, where people make returns on that basis. When that is done it is questioned. Where a return is made obviously by a man who understands the nature of the return he is making there is no question asked at all.

Deputy Little raised a case about a bishop. I have not the particulars of the case, but I understand that what happened was that an application for this allowance was not made in due time. The time for appeal had passed and the Revenue Commissioners were powerless in the matter. There was at least a case of that sort where simply nothing could be done at all. You must have some cases of that sort when you are dealing with 70,000 taxpayers and when you are dealing with all the complexities involved in income tax administration. You must have fixed periods in which people can appeal. If you extend the dates, administration would be impossible; every detail of procedure would be dragged out, large numbers of taxpayers would be lodging appeals at the end of six months and the whole thing would be so delayed that the collection of tax would be impossible. Deputy Little made a great deal of the unconstitutional action of the Revenue Commissioners and of the Special Commissioners. He reminded me of a story that I read somewhere about a man in one of the State legislatures in America who was always talking of the unconstitutional procedure taking place. Somebody told a story which really threw a certain light on his attitude of mind. The story was that of a farmer who was sitting in his kitchen somewhere in America. Looking up into a tree outside the door he saw a squirrel. He brought down his gun, carefully took aim and fired. The squirrel remained there. He fired the second barrel and yet the squirrel remained there. He was greatly astonished and he called his son and asked him to look up at the squirrel. The son looked up into the tree and he said that he could see no squirrel. The father made him look into the tree again but yet the son could not see any squirrel. He looked up at his father and said: "There is no squirrel in the tree, daddy, but there is a flea on your eyebrow." The unconstitutionalism that we have heard so much about is really in Deputy Little's mind and it cannot be applied to the Revenue Commissioners at all.

Apropos of that, might I ask the Minister a question?

Better wait until the end of the Minister's speech.

But it would come in much better now.

I suggest the Deputy should wait.

The Special Commissioners are not appointed by the Revenue Commissioners. They are not subject to the Revenue Commissioners. They very frequently decide against the Revenue Commissioners. I am told that in nearly half the cases the decisions of the Special Commissioners are either entirely against the Revenue Commissioners or partly against them. Neither the Special Commissioners nor the Revenue Commissioners, as Deputy O'Connell points out, have any interest in persecuting the taxpayer. They have nothing to gain by it. The only thing that could result from persecution of the taxpayer or straining the law against him would be that they would incur enmity. Bodies engaged in straining the law would inevitably overstep the law and would render themselves liable to pains and penalties of various kinds. The duty of revenue staffs is a duty conscientiously carried out; it is the duty of simply administering the law fairly and doing justice between one taxpayer and another. If they took up any other line they would be entirely wrong. I dare say that sometimes there may be something like unconscious harshness. It will arise in this way: If a taxpayer has made a series of false statements, has supported them by all sorts of returns and documents which are not accurate, and when the case is examined makes false verbal statements of all kinds, as generally happens, it may be that when that man does ultimately tell the truth the officials will believe that he is not telling the truth. I admit that might happen occasionally. If a man does all the things one finds done in these cases, and does them over a period of years and tries to deceive and fool the officer dealing with the case in every way in which he can deceive and fool him, then it is inevitable that when the man does tell the truth the official will think that he is still trying to put up some sort of a false story. There may be unconscious harshness in that way, but that is the only way in which it would happen.

Deputy MacEntee talked about a torture chamber, blood sucking and all that sort of thing. He referred to the businesses that were ruined. Of course Deputy MacEntee delivered a prepared statement and when he prepares his speech he always becomes lyrical so that he was bound to exaggerate very considerably. It is the fixed policy of the Commissioners, no matter what tax is owing, not to extract so much as would put a man out of business and not to take from him his working capital, but to leave him in a position where he can carry on his business. In many cases, owing to losses which have occurred in recent years, that involves the sacrifice of large amounts in taxes. It is also the custom in these instances, where a case is made, to allow payment by instalments, and there are a very large number of cases where people have been helped over difficulties in which the trade slump had put them by this method of easy payments.

Deputy Wolfe referred to an estate duty case. It is not the custom to charge stock plus retail profit. I believe there was a case in which the Deputy was engaged in which an official proposed to put a higher value on stock than was reasonable, but that was adjusted. It is not the practice of the Commissioners to value stock at retail price.

Mr. Wolfe

I read the written ruling of the Commissioners so that the Minister could not say it was only my recollection.

What is laid down is what the goods would fetch if prudently disposed of in the open market or something like that. That seems to be an absolutely fair basis on which to value stock. There are many cases in which the cost price would represent the fair value of the stock, but there are also many cases in which it would not represent the fair value. Take, for instance, whiskey which had been kept in bond for a considerable period. In that case the cost price would not really represent the value of the stock at the time of decease. So that, while there are cases in which the cost price would represent the value, there are other cases in which it would not. I agree with the Deputy to this extent, that the retail price would be above the value of the stock, because there are factors in the retail price, such as labour costs, delay, perhaps deterioration, and various other things, which should not be taken into account, but the basis which the Deputy read out is, I think, the basis that has always been adopted, and it is a fair basis.

With regard to the point as to English probate referred to by the Deputy, I think he said that in the case of a person domiciled in England the costs of probate here were allowed. If that is so, I am of opinion that the costs of English probate should be allowed here. I am quite clear on that, that the treatment given to people domiciled here should not be harder. I have not, however, had an opportunity of looking into that case.

Some Deputies spoke of difficulties arising through the complexity of the income tax system. Undoubtedly, hardships arise occasionally through the complexity of the system. The ordinary person has a certain difficulty in understanding and filling forms. That can only be rectified by a simplification of the law. A committee is sitting at present which has gone a considerable distance in the examination of a variety of proposals for the simplification of the code. Last year we took a small step towards that simplification. The changes made by last year's Finance Act provided for a good deal of simplification in many cases. We are anxious to proceed with simplification, so far as it can be done without loss of revenue, or with only a small loss. There are certain measures of simplification which could easily be adopted if we could afford to lose half a million or so of revenue. We could alter the code very substantially if we could afford to lose a good amount of revenue. Without that big loss of revenue, however, we believe that a good deal of simplification can be introduced which will remove certain hardships and difficulties.

I am in favour of the Commissioners taking a sympathetic view of cases where hardship occurs in that way, or where it occurs through some inadvertence on the part of the taxpayer. I know that many cases have been sympathetically dealt with. Perhaps there have been cases where a particular official took a more rigid view of the law than another would. As I pointed out in another connection, that can hardly be avoided. Certainly no instructions can be issued to officials definitely to strain the law. They may lean as far as they can towards the taxpayers in hard cases, but we cannot tell them to give an untenable interpretation to the law in any case. If that were to be done, great evils would creep into the public service.

It is a great thing to have an absolutely upright and trustworthy public service so that you can know that the law is being administered conscientiously, that no favour is being given, that no bribes are being taken, or anything of that kind. If, by regulation or instruction, we were to try to induce officials to be otherwise than impartial and to administer the law fairly, if we were to instruct them to strain the law and to overlook particular facts in income tax cases, we would possibly be opening a door to the growth of evils which might be very hard to eradicate. While revenue officials have in recent years been asked to give every possible consideration to the situation of those liable for large sums of tax, and to mitigate, as far as they can within the law, the hardship which may fall upon such people, they still must be bound by the law. Deputies have spoken of the Revenue Commissioners asking questions that they are not entitled to ask. They are entitled to ask nearly any question in the investigation of cases, but the taxpayer is not bound to answer.

That is very good.

Mr. Wolfe

Are they entitled to ask a person's bankers?

I do not believe that that has been done, and I should like if the Deputy would give me information with regard to that.

Mr. Wolfe

I read the communication.

I did not hear the Deputy read any communication about that. I do not believe it happened. If it did happen, I am sure that whoever approached the bank got his answer.

Mr. Wolfe

That is quite right— he did.

Knowing that that would be the case, I do not believe for a moment that any of them approached the bank. I should like the Deputy to give me very clear proof of that. I did not hear him read any letter about it and, as far as I am concerned, I do not believe it happened.

Mr. Wolfe

It happened in my own case.

I should like the Deputy to give me proof of it, because, personally, without wishing to doubt the Deputy, I am unable to believe it.

Mr. Wolfe

I believe it, because I read it.

Read it again.

The Deputy never read it or submitted it to me.

Does the Minister consider that the Commissioners are entitled to work on the principle that there is no such thing as an indiscreet question, but that there is such a thing as an indiscreet answer?

I dare say they would not say there is no such thing as an indiscreet question. What happens when people meet face to face to discuss a case is that in the course of the discussion and argument many questions will be asked which would not be asked on a form, and would not even be asked in a letter. If people meet to thresh out the facts of the case, it is quite proper that any question that will help to throw light on the facts should be asked. If the taxpayer is not bound to answer, he need not answer.

I do not take up the position that no mistakes have ever been made by the Revenue administration. There are bound to be mistakes. In the early years, the Revenue administration here laboured under great difficulties because there was this great mass of arrears to be dealt with and there was a very definite shortage of trained staff, owing to the fact that we were unable to induce a sufficient number of income tax inspectors in the British service to transfer here. The whole administration laboured under great difficulties because of the shortage of a trained staff and the inexperience of the new staff and also because of the destruction of records and the arrears. It is quite possible that there might have been some matter now and again that did not receive absolutely adequate consideration in these years, but the staffs are now adequate for the work and I think that we have an administration of the income tax and other codes that is as fair as it is possible to make it and that is efficient, for the purpose of doing absolute justice as between the revenue authorities and the taxpayer and as between one taxpayer and another. Reasonable discussion of revenue administration may be very helpful and may bring grievances and difficulties to light which can be remedied, but I think that the type of discussion in which Deputies Wolfe and MacEntee participated is entirely useless. It was largely a flood of abuse and would not help in any way.

Deputy Fahy mentioned a case of death duties. I cannot say anything about that case without having the particulars. If the Deputy likes to write me and give me the particulars I shall see what the other side of the case is, if the Revenue Commissioners took action that seemed to be a hardship what were the legal provisions or other factors which obliged them to do it.

I did not give the name or the place as the matter may be sub judice, but I shall give the facts of the case.

I do not believe in giving the names of cases here, because it is unfair to the individuals or to the families who might be concerned.

When the Minister told the House of the case where the Revenue Commissioners refused to accept the decision of the District Justice on the question of penalties ——

Not a decision.

It was not a decision— that is an admission which I am glad to get.

Mr. Wolfe

The District Justice spoke of several cases.

The refusal was made because of reasons not before the court. So, too, that proved my case that the Revenue Commissioners are usurping the judicial powers in respect of Section 54 of the Constitution.

Not at all, no more than I would be if I, as I could do in all these cases, recommended the Governor-General to remit the penalties. I have never used that power. I have never, in a single case, advised the Governor-General to remit a revenue penalty. If I felt there was something more necessary I simply would ask the Revenue Commissioners to reconsider it. It is not an exercise of a judicial function at all. If you like, it is an exercise of the prerogative of mercy.

Exactly. The exercise of the prerogative of mercy is something that could constitutionally override a judicial decision, but a State official should not be able to override and cannot according to the Constitution. I will ask the Minister to place before the House at some time in the near future the opinion of his legal advisers upon the whole question of the line of demarcation in the case of the Revenue Commissioners, whether they have power or not under the Constitution to exercise such functions as the imposing of penalties and the decision of a question of fraud.

I will ask the Minister one question only. On yesterday I gave the Minister two cases where inspectors of taxes were asking the taxpayers to pay the same tax twice over. Are those cases in which the Minister would give directions that once should be enough to pay the income tax?

I am quite clear that income tax should be paid only once, but the only way I can deal with these individual cases would be if the Deputy would send me a note stating the names and addresses of the people.

Mr. Wolfe

I will do that. I agree that the Minister can only deal with them by way of relief.

Question put and declared carried.
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