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Passengers with Disabilities

Chapter 5

Chapter 5

Findings

I found that the decisions not to grant tax relief in these cases were unreasonable, unfair and inappropriate for the following reasons:

(a) the scheme allows passengers with disabilities to qualify without having to meet a residency requirement if they purchase the vehicle. In these cases each of the passengers could have effected the purchase of the vehicle and qualified for the relief without any material change in their circumstances having occurred;

(b) the relief had been allowed by Revenue in three instances where the subjects were residing in nursing homes or their equivalent. In two of these cases Revenue stated that the decision had been influenced to a great extent by the fact that the passenger was a minor. In the cases of Mr Kelly and Mr Smith, I am satisfied (assuming in the latter case that his daughter's stay in the nursing home would have turned out to be a long-term stay) that the passengers with disabilities, although adults, were equally if not more dependent on the applicants for transport as a minor would be. However, in commenting on a draft of this report, Revenue stated that it believed that the decision that Mr Smith was not residing with his daughter as required by the Regulations, was correct;

(c) in the case of Mr Dunne, the circumstances of his case were not dissimilar to those which applied in the Flynn case where the relief was granted. However, in commenting on a draft of this report, Revenue contended that there were real and significant differences between the two cases. I found the treatment of these cases by the Revenue Commissioners to be contrary to fair or sound administration for the following reasons:

(a) by making explicit threats to the applicants of the possibility of legal proceedings, vehicle seizure and the imposition of penalties for false declarations, where a right of appeal had yet to be exercised by those applicants, Revenue's actions fell far short of any acceptable standard of dealing properly, fairly and impartially with its clients. In commenting on a draft of this report, Revenue accepted that the letters which issued to the applicants fell short of the standard expected in this regard and has taken steps to ensure that letters of this nature would not be issued in the future;

(b) by insisting that the residency requirement was a fundamental requirement for eligibility under the scheme, and by failing to seek evidence or make the applicants aware of the type of circumstances where the residency requirement could be waived, the Revenue Commissioners failed to provide full and accurate information to enable the applicants to pursue their entitlements.

I believe that the "sui generis and non-precedential" approach to these cases by the Revenue Commissioners is not conducive to fair and sound administration and has introduced an arbitrary element in deciding on taxpayers' entitlements. The absence of guidelines in relation to the operation of the residency requirement is not consistent with good administrative practice.

I chose not to explore fully the issue as to whether the imposition of the residency requirement by the 1994 Regulations may be ultra vires the Finance Act, 1989, since this is not essential to my investigation of the complaints at hand. However, I may return to this point at a later date if the circumstances of a future investigation make it necessary for me to do so.

In approaching more recent cases involving the 1994 Regulations, it is evident that the Revenue Commissioners have moved towards a more liberal definition of the residency requirement rather than using the discretion granted to them under Article 10(5)(a) which provides for a waiver of the residency requirement in exceptional circumstances. While I welcome a more realistic approach to the residency issue - an approach which may be more in keeping with that adopted, for example, in the Social Welfare code - it is also the case that a discretionary power which was included in the Regulations for the specific purpose of facilitating consideration of exceptional cases, should not be ignored. A decision not to use such a discretionary power is tantamount to fettering that discretion and would itself be contrary to fair administration.

Recommendations

I recommended that:

Each of the three complainants should be deemed by Revenue as eligible for the tax reliefs available under the Disabled Drivers and Disabled Passengers (Tax Concessions) Regulations, 1994 (S.I. No. 353 of 1994).

The VRT recouped from Mr Smith in respect of his motor vehicle in the sum of �5949 should be repaid to him and his application for the other tax reliefs available, i.e. a repayment of VAT on the vehicle and exemption from road tax and relief from excise duty for the relevant period, should now be processed for payment.

The applications of Mr Dunne and Mr Kelly in respect of the tax reliefs applied for under the Disabled Drivers and Disabled Passengers (Tax Concessions) Regulations should also now be processed for payment.

Revenue should put in place, as soon as possible, arrangements whereby it can, in the interests of equity, carry out a review of cases where applicants were refused the reliefs available under the Regulations on grounds which are similar to those applicable in the cases which are the subject of this investigation. Revenue should report to me within six months on progress in regard to implementing this recommendation

Documentation relating to the scheme should be reviewed with a view to giving more information to potential applicants, in particular, with regard to the waiver of the residency requirement, an outline of acceptable exceptional circumstances where a waiver has been granted in the past and of appeal procedures available. These details should also be included in the Revenue's Section 16 Freedom of Information Manual.

Administrative procedures and documentation used in the processing of applications and informing applicants of the result of their applications should be urgently reviewed and amended where necessary to reflect good administrative practice and the Revenue Commissioners' Charter of Rights for Taxpayers.

Revenue's Response to the Investigation Report

The Revenue Commissioners accepted my recommendations in full.

Revenue also made a number of general points, including the following:

(i) Revenue maintained that it has endeavoured to carry out its obligations under the VRT legislation and Regulations in a fair, reasonable and professional manner and has been conscious of the need for a balanced and sympathetic approach while administering the Disabled Drivers and Disabled Passengers Scheme. Revenue stated that the increasing numbers of cases involving passengers with disabilities (from 780 in 1997 to 1689 in 2000) in which relief has been granted demonstrates this approach.

(ii) Revenue questioned whether a tax based scheme is the most appropriate model for dealing with the transportation needs of people with disabilities.

(iii) Revenue stated that it intended approaching the Department of Finance with a view to reviewing the Regulations again and that my Investigation Report would also be brought to the attention of the Department of Justice, Equality and Law Reform, chair of the inter-departmental group which is currently reviewing the scheme.

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