Jimmy Deenihan (Kerry North, Fine Gael)
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Question 58: To ask the Minister for Finance if he supports the establishment of a tax advocate with powers to monitor fair treatment of taxpayers. [39142/06]

Brian Cowen (Laois-Offaly, Fianna Fail)
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The Deputy's question is related to the calls made on occasion for the establishment of an independent individual or entity whose proposed role would include acting as an advocate for taxpayers who feel unfairly treated by the system. The statutory remit of the Ombudsman already incorporates both of the roles proposed for a taxpayer advocate, namely, acting for taxpayers and investigating actions which are contrary to fair or sound administration.

Since the inception of the Office of the Ombudsman, significant numbers of taxpayers have exercised their right to make complaints to that office. Furthermore, the Ombudsman has carried out a number of special investigations on her own initiative under the Ombudsman Act 1980, such as into the operation of schemes for disabled drivers and the repayment of tax to certain widows. When calls were previously made for the establishment of a taxpayer advocate, the then Ombudsman drew attention to the duplication of role and responsibilities that such a development would involve.

Apart from the statutory role and responsibility of the Ombudsman, other avenues are also open for taxpayers to make their complaints and to seek satisfaction for perceived unfair treatment. They can lodge a customer service complaint about the standard of service received in their personal contact with the Revenue Commissioners by telephone, correspondence, fax, e-mail or in person to a Revenue public office. They can request a review by Revenue of any aspect of the way in which their tax affairs have been handled. Such reviews are undertaken by a senior Revenue official who was not involved in the original decision or, at the taxpayer's request, jointly by an external reviewer and a senior official. Taxpayers who are dissatisfied with specific treatments by Revenue can also make an appeal under statutory provisions which grant access to the appeal commissioners. The appeal commissioners are completely independent of the Revenue Commissioners.

The fact that few people are enthusiastic about paying taxes is all the more reason for effective channels of complaint and appeal by taxpayers against poor service or unfairness. However, given the comprehensive and accessible system already in place for complaints or appeals by any taxpayer who feels unfairly treated by the tax system, it is not obvious to me that there is a case for putting in place the additional layer of a tax advocate's office.

Richard Bruton (Dublin North Central, Fine Gael)
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While I understand the Minister's arguments, I draw his attention to the fact that, until comparatively recently, the Revenue Commissioners have had limited interest in refunding overpayments. It was only after the political attention increased that Revenue became conscious of refunds. The perception exists that, while Revenue's systems are highly geared for collecting taxes, as is proper, they are not as good at returning money.

A recent survey conducted among tax advisers revealed an alarming level of discontent with delays in processing and I know from my constituents that the entire system comes close to implosion during January and February, when offices stop taking calls and queues grow lengthy. These issues are not routinely investigated by the Ombudsman because they do not come under the definition of unfairness in her code. No advocate seems to be employed to demand that Revenue, like any other service provider, must be ready to meet demand at peak times.

Situations should not arise in which people are told the telephone lines are closed or that they will have to queue for several hours. I understand why the Minister does not want to duplicate the duties of the Ombudsman, but a role is being missed in that regard. Perhaps if the Minister set out standards for matters such as unacceptable delays and asked the Revenue Commissioners to report on whether they were being met, that process could be begun. A vacuum currently exists and, while Revenue is moving to fill it, the needs of customers are not yet being met.

Brian Cowen (Laois-Offaly, Fianna Fail)
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There is nothing to prevent the Ombudsman from making general remarks about the efficiency and fairness of the system and such remarks have been made in the past. In regard to the general evaluation of tax administration, it is not clear what role a tax advocate could play that is not already provided in the existing political and administrative structures. In countries which have independent taxpayer advocates, the role of the office is to deal with complaints by individuals about administrative matters and does not include addressing system or policy issues.

Apart from the role of the Ombudsman, existing customer complaint and review procedures and the statutory appeals process to the appeals commissioner, the working of the tax system can be discussed at various fora, including the partnership process. In addition to being required to formally report to my office, Revenue is subject to an annual audit examination by the Comptroller and Auditor General, who reports on taxes collected and systems, procedures and practices. The chairman of the Revenue Commissioners is also examined at length by the Committee of Public Accounts with regard to the report of the Comptroller and Auditor General. At times there may well be service pressures, such as a computer breakdown. However, the amount of work in which the Revenue Commissioners are involved, the legislative reforms concerning self-assessment enacted in this House, the much improved relationship between tax professionals and the Revenue Commissioners, and the tax compliance culture that now pertains indicate a sea change compared to the position 20 years ago. I read a report recently that indicated the level of arrears is only 2%.

It may be true that the Revenue Commissioners' effort to modernise, computerise and have a system working to a standard deemed efficient by international criteria has necessitated a consumer focus. I assure the Deputy that the chairman of the Revenue Commissioners will seek, in every way possible, to ensure taxpayers generally receive a fair hearing and assessment and that their credits and entitlements are paid in good time. On foot of service pressures, the chairman sometimes contacts me and departmental officials seeking an increase in staff. We often try to provide for this given the nature of the work done by his office. While there is always room for improvement, there is certainly no institutional reluctance to advance this aspect of the office's work to a greater extent than might traditionally have been the case.

Joan Burton (Dublin West, Labour)
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I proposed the establishment of a taxpayer advocacy office about three years ago following a visit I made to the equivalent office in the United States. Despite what the Minister said about an improvement in the revenue system, which improvement I acknowledge, the ordinary taxpayer is not sufficiently empowered and does not have sufficient entitlements vis-À-vis the Revenue Commissioners. In the past three or four weeks, when taxpayers were filling in self-assessment tax forms and making payments through the Revenue Commissioners' on-line service, it was impossible for them to get through to the office over the telephone. Did the Minister try to call the Revenue Commissioners to experience what PAYE and self-employed taxpayers were experiencing?

Is the Minister aware that the survey by the Irish Taxation Institute, which supports the Labour Party's call for a taxpayer advocacy office, found that the processing time for tax returns now exceeds three months and that 72% of the institute's tax practitioners consider the Revenue's service negative and unsatisfactory. While the Revenue Commissioners have made much progress due to prodding from Opposition parties and have improved their advertising in respect of tax allowances and tax credits, these steps are not enough. Figures will indicate that in excess of €200 million, which taxpayers are entitled to reclaim, will remain unclaimed at the end of this year. Did the Minister telephone the Revenue Commissioners to check what conditions have been like over the past month?

Dan Boyle (Cork South Central, Green Party)
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A taxpayer advocacy office is necessary and its remit should be broader than proposed. There is a need for a stand-alone agency to analyse more critically whether tax reliefs are being claimed in a proportionate way. Even the Minister might be prepared to accept that they have been claimed in a disproportionate way in that those with more disposable income have benefited most from the reliefs available. The proposed advocacy office would be in a position to argue this point and analyse the system in a way the Revenue Commissioners could not. The job of the latter is to honour the tax code as decided by the House and determined by the Minister. The Committee of Public Accounts and Comptroller and Auditor General could not carry out the analysis because they consider foregone expenditure accounted for in this House.

Not only is there a taxpayer advocacy office in the United States, there are also relevant NGOs, such as the body of taxpayers that advocates responsible expenditure. It would be in the interest of the Minister and political system in general to establish such an infrastructure because it would allow us all to benefit from improved critical examination of tax expenditure.

Richard Bruton (Dublin North Central, Fine Gael)
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The relationship in question is not one of equals. If one's britches are down around one's ankles, one will not argue about the price of treatment with the consultant. Similarly, if the Office of the Revenue Commissioners has many powers in its armoury and the taxpayer has none, it is difficult for the latter to assert his or her rights. The issue of advocacy therefore needs to be addressed in some fashion.

Brian Cowen (Laois-Offaly, Fianna Fail)
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On Deputy Boyle's point, we have enough bureaucracy in the system and I do not believe we need more independent NGOs telling us what to do. The decisions on our tax system and the laws we pass are matters for the Oireachtas, the Members of which are accountable to the people. I do not buy into the concept that we must appoint someone who is answerable to nobody to tell us what to do. The decisions in question involve political judgments.

Dan Boyle (Cork South Central, Green Party)
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It would be nice to have someone to answer questions.

Brian Cowen (Laois-Offaly, Fianna Fail)
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Taxation is a political matter.

I am making this general point because I am always amazed at the desire to set up more offices that are answerable to nobody in the view that they would be far wiser than the rest of us, even though the Parliament has been given a job to do.

Dan Boyle (Cork South Central, Green Party)
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If the questions we asked were answered, we would not have to appoint anybody.

Brian Cowen (Laois-Offaly, Fianna Fail)
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I am often bemused by this sort of thinking.

The Internal Revenue Service in the United States operates a taxpayer advocacy service headed by a national taxpayer advocate. However, the taxpayer advocate service is not external to the Internal Revenue Service. It deals with both individual taxpayers' problems and problems attracting multiple taxpayers, and with flaws in the tax code. The latter role is referred to as systemic advocacy. The service is not a substitute for established Internal Revenue Service procedure or a formal appeals process.

We have an ombudsman with the power to do precisely what the Deputies believe should be done, that is, make general comments on practice, efficiency, policy and individual failings. There is a tremendous desire to set up more structures and quangos. Given that we have set up the Office of the Ombudsman, there is no need to duplicate its functions.

The Revenue Commissioners have arrangements whereby an external official can operate in conjunction with a senior Revenue official if a taxpayer feels he or she is being treated unfairly. We therefore have systems of redress in place. It is not just a question of politicians talking on behalf of taxpayers as there are tax professionals within the Revenue Commissioners who want the system to work better also.

If many practitioners in the Irish Taxation Institute feel dissatisfied with the Revenue Commissioners, that is their prerogative, but, having spoken to tax professionals, I honestly believe there has been a sea change over the past ten or 15 years by way of qualitative improvements in the relationship between taxpayers, tax professionals and the Office of the Revenue Commissioners. The modernisation of the service is one reason we have an efficient tax collection and administration system. It is generating revenue and allowing us to debate and decide on spending plans in the order of billions of euro.

It would be no harm to stand up for the system now and again. The Revenue Commissioners are doing a good job. If specific problems exist, they should be dealt with but in the knowledge that we have a good, independent service staffed by people of integrity who do their jobs conscientiously and well.

Joan Burton (Dublin West, Labour)
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Did the Minister telephone the Revenue Commissioners himself?

Brian Cowen (Laois-Offaly, Fianna Fail)
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The chairman comes to see me.

Joan Burton (Dublin West, Labour)
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Did the Minister try dialling the service?

Brian Cowen (Laois-Offaly, Fianna Fail)
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I have a very good accountant who handles all my affairs.