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The Minister is dealing here with something that is
fundamental to our whole system of law and juris-
prudence which recognises the privilege that extends to
the relationship between a solicitor and his client. For
the sake of this one piece of tax evasion it is not worth
even tinkering with the confidential relationship between
solicitor and client. If the Minister considers this situa-
tion from a broader point of view, I think he will agree
with me. If we should tamper, even for this limited
purpose, with the confidential relationship between soli-
citor and client we would be starting something that
could be very injurious in the long run in other situa-
tions.
Subsection (2) of that section reads: "The particulars
which a person must furnish under this section, if he is
required by such a notice so to do, include particulars
. . . " I would draw the Minister's attention in particular
to the word "include" there. It seems to me that in this
regard the Revenue Commissioners can direct the tax-
payer involved to give them any sort of information
about anything, provided it is related to the sections in
question.
Section 54 (Seanad Eireann; Committee Stage)
31 July 1974
An Cathaoirleach: Recommendation No. 22 is conse-
quential on recommendation No. 20. Accordingly, it is
suggested that both be debated together.
Mr. E. Ryan: I move recommendation No. 20:
In subsection (3), page 30, lines 31 and 32, to
delete "in the opinion of the Revenue Commissioners".
My purpose in putting down this recommendation is
that on the one hand it is not necessary and, on the
other, it will create difficulties both for taxpayers and
for the Revenue Commissioners. If dividends are re-
ceived instead of salary or emoluments, then the tax-
payer can be assessed and, if he does not accept the
assessment, he can appeal and the matter can be
decided then as a matter of fact, as a matter of where
evidence would be given, the circumstances will be
considered and it will be decided as a matter of fact.
If, in fact, the Revenue Commissioners do press this
matter and rely on their opinion then, of course, in the
long run—if they have reference to quite a number of
cases in recent years decided by the Supreme Court—
they will have to exercise their power under the posi-
tion where they are acting on their opinion. They will
have to exercise that power with great circumspection
and really in a much more complicated way than if
they merely suggested that the person was not really
receiving adequate consideration and argue that pos-
sibly on appeal. My suggestion is that it is a compli-
cation. Any State body, any Minister is being circum-
scribed more and more by Supreme Court decisions on
the circumstances in which an opinion of this kind can
be formed. For that reason I suggest that it would be
much better to leave out the words in question alto-
gether.
Mr. Lenihan: I would support Senator Ryan very
strongly on this because I think it is a superfluous inser-
tion in the section. First of all, the subsection stands on
its own without the words "in the opinion of the
Revenue Commissioners". From the point of view
of the Revenue Commissioners themselves, I think they
are entering a very dangerous area here because, both
in regard to "the opinion of the Revenue Commis-
sioners" as incorporated in subsection (3) and the man-
ner in which they exercise this opinion, as incorporated
in subsection (5), the scope here for legal interpretation
as to what way or manner the Revenue Commissioners
exercise their opinion appears to me to be enormous.
I am just as concerned as anybody in this House that
revenue be collected in a proper form in the interests
of the community as a whole. I do not see why the
Revenue Commissioners should be arrogating to them-
selves, first of all, an opinion in the matter at all and,
secondly, why they should be setting out in a section
here the various matters to which they must have
regard.
Mr. R. Ryan: I can find some area of agreement with
the Senators when they speak of the phrase "in the
opinion of the Revenue Commissioners" being super-
fluous. From a purely literary point of view I suppose
it could be left out but I do not think that its inclusion
creates any legal complications because the reality of the
operation would be that when the return of income
would be made the inspector of taxes would have to
make as assessment based on what he considered to be
dividends which were issued in lieu of income. That in
practice would be the opinion of the Revenue Commis-
sioners. The right of appeal to the Appeal Commis-
sioners exists under subsection (8) with respect to any
opinion of the Revenue Commissioners. The final opin-
ion in this will not be that of the Revenue Commis-
sioners in the case of a taxpayer being aggrieved by the
original decision. I do not think the amendment
strengthens the operation in any way nor do I think it
relieves the Revenue Commissioners of the need to form
an opinion in the first place. I would be prepared to
accept perhaps that the phrase is superfluous but it is
the language much admired and used by draftsmen.
Down through the decades there have been several
cases in which the phrase "in the opinion of the Reve-
nue Commissioners" has been used. I will draw the
attention of the draftsmen to the wise remarks of the
Senators and of the Minister on this and, perhaps,
consideration would be given to whether it is necessary
to use such a phrase in the future.
So far as subsection (5) is concerned, it is wise to list
the number of considerations which should be borne in
mind. There is always the danger that if these tests are
not set out, the view may be held elsewhere that these
are not relevant. I would suggest that each of these
considerations here is a relevant one.
Mr. E. Ryan: This Bill is full of flat statements that
the Revenue Commissioners are to act in circumstances
which are set out and where no reference is made to
their opinion. My point is that if they are to rely on an
opinion then they are letting themselves in for a lot of
trouble. If the taxpayer is not satisfied let him appeal.
Mr. R. Ryan: I do not think Sen. Eoin Ryan would
dispute that somebody somewhere along the line has to
come to an opinion on the facts. What subsection (5)
says
inter alia
is that any evidence tendered by or on
behalf of the person must be considered. It helps unifor-
mity of interpretation. If the legislators do not set out
what they consider to be appropriate considerations,
there is a danger of different inspectors of taxes apply-
ing their own valuations and their own considerations
which might vary quite considerably. On the ground
that tax law should be certain, there is a great deal
to be said for saying what are the relevant considera-
tions.
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