Government furious over content of letters to OAPs
Competency of Revenue Commissioners is challenged as officials are inundated with phone calls from pensioners petrified by tax demands
THE competency of the Revenue Commissioners has been called into question over the handling of the clampdown on pensions, amid claims that the "gross oversight" by the taxman has left hundreds of millions of euro uncollected over the past decade.
The criticism comes as 200 Revenue officials manned telephone lines in 20 centres yesterday to deal with an avalanche of queries from worried pensioners.
There is also anger in Government with the Revenue, which is accused of not understanding the political impact of the letters it sent out to pensioners.
A senior government source expressed anger at both the wording and timing of the letters, saying: "There is an obvious need to address how letters to the public are written. It is an issue and it will be addressed."
After the public furore on Friday, it is now clear that political pressure was brought upon the Revenue Commissioners to limit the historical examination in an attempt to stop the backlash.
"The medical card fiasco of 2008 still looms large in the memory; nobody wants a repeat of that," said the government source.
But the failure to gather back tax that is owed has led to allegations that the Revenue is treating different sets of taxpayers unequally.
Aidan McLoughlin, a pensions expert and managing director of ITC Group, said he was astonished at the way the Revenue Commissioners handled the issue.
"Surely it couldn't have come as a surprise to discover that people over 65 had social-welfare pensions," he told the Sunday Independent.
"Blaming people for not making a tax return is a bit rich. The failure to collect what I believe is hundreds of millions in tax is a huge loss. If you look at the amnesties they did over the years on offshore accounts and the like, the average payback was about three times the original tax foregone.
"So if they apply that here, you could easily get into very large numbers because it looks as though this has been going on for at least a decade.
"It seems they (the Revenue) have been guilty of an enormous oversight. It looks as though one-in-four pensioners underpaid tax. There is also a reasonable chance the number is even higher.
"The figures so far are only based on social-welfare records. But what about the tens of thousands who have overseas pensions from the UK, the US or other countries?
Mr McLoughlin said there was a competency issue for Revenue, adding: "It looks unlikely that they will collect back taxes from people involved in this issue.
"But if you go back to the offshore accounts issue, they had no regard about whether those people who they pursued rigorously were pensioners or not when they went looking for money.
"There is the issue about treating two groups of people who owe tax differently. There is the question about why they are being so generous to people when the country is broke, when they acted completely differently when the country had money."
Meanwhile, one centre in Dublin's Mount Street, one of five in the capital, yesterday reported a very busy morning dealing with questions as operators manning computers answered queries and worked from 9.30am to 4.30pm.
The number for callers in Dublin city and county is (1890) 333-425.
People in Cavan, Donegal, Galway, Leitrim, Longford, Louth, Mayo, Monaghan, Offaly, Roscommon, Sligo and Westmeath can call (1890) 777-425. Those in Clare, Cork, Kerry and Limerick can ring (1890) 222-425.
Residents of Carlow, Kildare, Kilkenny, Laois, Meath, Tipperary, Waterford, Wexford and Wicklow can call (1890) 444-425.