Bernard Durkan (Kildare North, Fine Gael)
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Question 110: To ask the Minister for Finance, further to Parliamentary Question No. 151 of 28 June 2011, if it is recognised that the tax payer concerned at all stages followed the advice of their tax consultant, that they received written confirmation from the Revenue Commissioners indicating that they were due a refund of more than €22,000, that the first instalment was paid, and without any changes in legislation an audit deemed the tax payer to have a liability instead of a refund; that in the past two weeks the tax payer's house was repossessed by the lending authority for almost the precise amount of unpaid mortgage instalments as that promised by way of refund by the Revenue Commissioners to the tax payer initially; the extent of disappointment to the tax payer arising from such a process; if given the original indication and promissory correspondence the Revenue Commissioners are in fact obliged to make good the promise; and if he will make a statement on the matter. [19823/11]

Michael Noonan (Limerick City, Fine Gael)
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I have been advised by the Revenue Commissioners that the taxpayer in question has been the subject of an ongoing Revenue audit. In September 2010 the taxpayer's agent agreed a basis for settlement with the Revenue auditor – essentially involving the set off of underpaid tax, interest and penalty against relevant contracts tax credits, with a small balance to be refunded. At that meeting, the agent said that he would recommend this settlement to the taxpayer. However, despite multiple contacts by the Revenue auditor with the taxpayer's agent and with the taxpayer, the audit has still not been formally agreed. There has been no indication from the taxpayer or his agent that they disagree with Revenue's computation of the underpayment amount (against which the relevant contracts credits are to be set off) and no alternative computations or proposals have been forthcoming.

Prior to the commencement of the audit, the Revenue Commissioners made a partial refund to the taxpayer in respect of relevant contracts tax credits. A statement did issue to the taxpayer in September 2008, from the Collector General's office, showing a credit balance of €18,262. However, this statement clearly indicated that the question of any refund of this credit balance was subject to Revenue's right to collect additional tax due in respect of outstanding or incorrect returns. When the additional tax liabilities were identified during the course of the audit, the Revenue auditor proposed that the credit balance of relevant contracts tax would be offset against the additional liabilities under the audit settlement. The taxpayer's agent, as part of the proposed audit settlement, agreed this offset.

At all times the Revenue Commissioners have sought to make the taxpayer and his agent aware of the position in the case and on the basis of the facts set out above, neither the taxpayer nor his agent could reasonably have anticipated any significant refund being due. The taxpayer is advised by Revenue to now engage with the Kildare District so as to reach closure on this matter.