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Taxman vows not to pursue pensioners for small arrears

THE Revenue Commissioners yesterday promised not to pursue thousands of pensioners for small amounts of arrears as they admitted their mistake in sending tax demand letters to huge numbers of elderly people.

The tax officials were forced to admit that thousands of pensioners were sent the letters by mistake.

Pensions Ombudsman Paul Kenny said he has now secured a commitment from the tax authorities that the mistakes will be corrected by the end of this month.

And he claimed he had secured agreement that those who owe a small amount in arrears will not be pursued for the money.

It will provide some small comfort to tens of thousands of confused and angry retirees who have received letters. Mr Kenny met Revenue boss Declan Rigney yesterday to complain about the treatment of elderly people who have been frightened and left in tears at the poor handling of the issue.

The Revenue boss accepted that anyone with small arrears will not be chased down for the money by the tax authorities.

Meanwhile, Josephine Feehily, the chairwoman of the Revenue Commissioners, faces a grilling from TDs and senators today.

In her first public appearance since the fiasco erupted, Ms Feehily will lead a Revenue delegation appearing before the Finance, Public Expenditure and Reform Committee this afternoon.

Despite her low profile over the past week, a Revenue spokeswoman insisted Ms Feehily had been working in her Dublin office.

Labour Dublin South TD Alex White -- who chairs the committee -- said TDs will "discuss the handling of this issue, particularly the communication of the tax situation for some older people".

"No-one will argue with the necessity for tax compliance on the part of all citizens," Mr White said. "However, many pensioners are unsure of where they stand on their tax liability, and need reassurance."

"We will be seeking clarity on the matter, and looking at how this situation was handled. We will question Revenue on its communications strategy, how it may be reviewed, and will see what lessons may be learned for the future."

The meetings come after this newspaper revealed that thousands of retired people were told to pay income tax they do not owe.

Some 15,000 people who have small occupational pensions have been hit with tax bills, even though they earn so little that they are exempt from tax.

Last night the Pensions Ombudsman added: "Revenue recognised that huge numbers of pensioners are exempt from paying income tax, even if that was not clear from the letters they sent out.

"They are working to get income tax exemption letters out to people and hope to have it cleared up by the end of the month."

And Mr Kenny maintained that some of the 115,000 letters sent to people saying they have to pay more tax this year are based on incorrect information.

These people have an occupational pension and a State pension and were told they had likely underpaid their tax.

A statement issued by Mr Kenny's office said: "He is happy that things are being brought under control and that Revenue will make the necessary steps to correct the situation as quickly as possible.

"A small group of people who may have had tax deducted, for which they are not liable, will receive refunds quite quickly, as work on the exemption certificates has already started."

Taoiseach Enda Kenny has accepted that sending up to 150,000 letters sparked confusion and anxiety.

Of this number, some 20,000 will have to pay less tax, 115,000 owe extra tax according to Revenue, while 15,000 will have to pay tax for now but will get a refund as they are exempt.

Irish Independent