Old-fashioned teachers of constitutional law, when asked what the central elements of the Constitution are, will call on parade such venerable personages as the Attorney General, the President or the Ceann Comhairle. But, in view of their control and direction of a vital aspect of State power, there is a case for saying that the Revenue Commissioners are more important than any of these.
The first and most fundamental point about the commissioners is that they discharge a function which - because of the direct effect it has on the property and prosperity of individuals and its inherently non-political character - it has long been considered should be vested outside the political process.
And, although strictly speaking, the commissioners are a satellite of the Department of Finance, in fact they are to a large extent independent. This independence depends on a convention which has frequently been cited by Ministers of Finance, in reply to deputies' questions regarding their constituents' tax affairs. One of its earliest formulations (in 1923) is contained in a letter sent by the Minister to the commissioners' chairman, stating: "While the commissioners will be responsible directly to the Minister for the administration of the revenue services, the commissioners will act independently in exercising the statutory powers vested in them in regard to an individual's liability to tax."
But the flip side of this essential independence is that the commissioners are responsible, effectively, to no one. Yet they wield a great deal of discretionary power. The tax laws are deliberately framed stringently so as to allow for a good deal of tolerance in their administration. As a result, the practice exists whereby the commissioners will grant extra-statutory concessions to mitigate the rigour of the code.
There are even occasional statements of practice by the commissioners, indicating what attitudes they will take to the interpretation and application of certain legislation. In addition, the commissioners have the power to impose swingeing penalties and interest claims, which are much greater than most fines imposed by a court. Another critical area is how the commissioners decide to allocate their staff as between the PAYE sector and the self-employed. All of these areas involve not individual cases or the privacy of taxpayers but significant policy questions. Yet there is scant opportunity for such matters to be published, never mind probed and appraised, by public representatives. The crux is: how can this be done without jeopardising the essentially non-political character of the commissioners?
At present, there exist two ways in which information on the Revenue Commissioners may be obtained and appraised. The first is that senior staff may be called to answer questions before an Oireachtas committee, something which is now obligatory under the Committees of the Houses of the Oireachtas Act (Compellability of Witnesses) 1997. This is part of an attempt to make senior public servants, for example secretaries general or the chief executives of State-sponsored bodies, accountable in public.
Today, as it happens, the chairman of the Revenue Commissioners, Mr Quigley, is to appear - not for the first time - before the Dail Public Accounts Committee. The cash value of this, of course, depends on how well prepared and thorough the members of the committee are; and also on whether the Dail itself makes the time available to debate its committee's report. Yields from this source have in the past been disappointing. However, there is at least here an established mechanism which could, given the necessary political will, be refined and utilised more effectively.
The second possible method is a novel one, namely the Freedom of Information Act 1997, which was used in the David Andrews episode more potently than many people had anticipated. Likewise, it could be an effective weapon for bringing to the light of day information about the commissioners' performance of their duties. There is naturally a general exemption in the Act, in circumstances where access to a record might prejudice the effectiveness of the commissioners in enforcing the revenue laws. But the Act also provides that the commissioners cannot hide behind this provision, by using it to prevent the disclosure of records which might cast light on the efficiency with which they perform their duties.
Another exception prevents the disclosure of information relating to the financial affairs of an individual, in this case his or her tax affairs. But the emphasis here is on "an identifiable individual" and, according to an excellent new work on the subject (Maeve McDonagh, Freedom of Information Law in Ire- land) experience in other jurisdictions suggests that it would be contrary to the spirit of the legislation if public bodies were given free rein to rely on this exemption when reasonably large groups were involved.
In short, this exemption would be unlikely to apply to the several thousand so-called non-resident bank account holders.
In summary, it seems that the new legislation could be a potent weapon in bringing to public notice the commissioners' performance of their duties.
The second and more specific thread left hanging by last week's revelations stems from the Revenue Commissioners' bold proclamation that they will collect every scrap of DIRT which is owing to the State. The snag here of course is the settlement which was reached between the commissioners and AIB in 199192.
The agreement must surely have used words to the effect that this was a final and complete settlement of any DIRT claims which might arise. To put it simply: can the Revenue Commissioners go back on this agreement?
The first matter to focus upon is an important point of fact: did the bank give full details of the extent of the evasion (to use a nice word) before receiving absolution from the commissioners? This was a critical factor in the existing leading authority on the subject, the exotically named Pandion Haliaetus. Here the commissioners had been asked for and gave in advance their views of the tax implications of certain patent licensing transactions. However the High Court was satisfied that the taxpayer had not given full details of the scheme as it had actually been implemented by the taxpayer. In short, there had been an absence of the actualite. Accordingly the taxpayer could not rely upon the commissioners' statement being binding in relation to the tax implications of the scheme.
Alternatively, let us assume that the AIB did make a full and fair disclosure of all the DIRT which was owing (and if this were in fact done, it raises a point about the commissioners' conduct, which is discussed above). On this basis, the matter becomes more complicated since now we are into an area which has become known as the doctrine of legitimate expectations. This is a broad principle which means that the State or its agencies must stick to their word. To many people this proposition might seem to be as self-evidently virtuous as mother's love or apple pie.
However, there is a countervailing policy. This depends upon the fact that - despite the control of the legislature by the executive - Acts of the Oireachtas still retain an existence separate from the say-so of an executive agency like the commissioners. In other words, since here no legislation was involved, in contrast to the tax amnesty of 1993, the law which is open and has been debated in the Oireachtas should be capable of being ascertained and relied upon. It cannot be altered by agreement of the executive, even if this leads to injustice to an individual. Moreover, there does not seem to have been any injustice here since none of the supposed non-resident account holders actually shifted their positions, in any way, in reliance on the commissioners' word.
The question of whether the commissioners could enforce the law, despite any purported agreement to the contrary, is a controversial point of law which has leaped to public prominence in anything but an academic form. No doubt we can expect to hear more of it in coming months. Or, if not, to receive an explanation from the Revenue Commissioners as to why not.
