Case 98102. Records relating to the requesters' tax affairs - whether access could lead to the revelation of the identity of a person who has given information in confidence - section 23(1)(b) - whether access could lead to the revelation of the identity of a person who has provided information in confidence in relation to criminal law - section 46(1)(f) - legal professional privilege - section 22(1)(a) - whether access could reasonably be expected to prejudice or impair the enforcement of, compliance with or administration of any law - section 23(1)(a)(ii) - whether access could reasonably be expected to prejudice or impair the fairness of civil proceedings in a court - section 23(1)(a)(iv) - whether access could reasonably be expected to prejudice the effectiveness of Revenue audits - section 21(1)(a) - whether personal information about third parties would be disclosed - section 28 - records created by the Office of the Director of Public Prosecutions - section 46(1)(b)

Case Summary

Facts

The requesters were the subject of an audit by the Revenue and appealed the assessment raised after the audit. They sought access to all personal records. The Revenue decided to grant access to a number of records, grant partial access to others and to withhold others invoking the exemptions under section 23(1)(b), section 46(1)(f), section 22(1)(a), section 23(1)(a)(ii), section 23(1)(a)(iv), section 21(1)(a) and section 28 (personal information about third parties).

Decision

The Commissioner accepted that the contents of an anonymous letter which might identify the author were given in confidence and that section 23(1)(b) applied. He did not accept that information given by tenants to the Revenue was always given on the understanding that it was given in confidence. He did not accept the claim that the exemption under section 23(1)(b) applied in relation to a record which did not reveal the identity of the informant. He ordered deletions to some records to ensure that the identities of individuals providing information in confidence were not revealed.

He decided that that the Revenue was entitled to claim exemption in respect of some records on the grounds that they would qualify for legal professional privilege. He accepted that the FOI Act did not apply to records created by the Office of the Director of Public Prosecutions relating to the prosecution of one of the requesters for a tax offence by virtue of section 46(1)(b).

Having examined the contents of the records, he decided that the harm envisaged in section 23(1)(a)(ii) would not occur through their release. He was not satisfied that the release of the records could reasonably be expected to prejudice or impair the fairness of the proceedings in the Circuit Court and decided that Revenue was not entitled to refuse access under section 23(1)(a)(iv).

He also decided that the release of a record which contained personal information about a third party would not involve the disclosure of personal information about the third party since the requesters themselves had provided the information to the public body.

The Revenue argued that the records would reveal the audit selection criteria used by it and would reveal its audit methodologies and that this could reasonably be expected to prejudice the effectiveness of audits. The Commissioner was not satisfied that the records in this case would reveal anything that was not already known to many taxpayers and their agents. He was not satisfied that the records at issue could reasonably be expected to prejudice the effectiveness of this or other audits and decided that they were not exempt under section 21.

Date of Decision: 23.09.1999

DECISION

Background:

Mr and Mrs ABJ made a request to the Office of the Revenue Commissioners (the Revenue) under the Freedom of Information Act, 1997 (FOI Act) for access to personal records on 2 June 1998 through their solicitors. On 29 June 1998, the Revenue informed the solicitors that a decision had been made to grant access to the records sought, with the following exceptions:

• access was refused in total to some records and to part of another record on the basis that access could lead to the revelation of the identity of a source of information to Revenue and the records were exempt by virtue of section 23(1)(b) of the FOI Act, or alternatively that they could lead to the revelation of the identity of a person who provided information to a public body in confidence in relation to the enforcement of the criminal law and were exempt by virtue of section 46(1)(f) of the FOI Act (Group 1 records),
• access was refused to five records and to part of another record on the basis that they would be exempt from production in a court on the grounds of legal professional privilege and were exempt by virtue of section 22(1)(a) of the FOI Act (Group 2 records),
• access was refused to certain records because the Revenue considered that they came within the scope of section 46(1)(b) and the FOI Act did not apply to them (Group 3 records),
• access was refused to certain records relating to a (then) future hearing before the Appeal Commissioners on the basis that access could reasonably be expected to prejudice or impair the administration of income tax law and the fairness of proceedings in a tribunal, being the Appeal Commissioners, and were exempt by virtue of section 23(1)(a)(ii) and (iv) of the FOI Act (Group 4 records),
• access was refused to records relating to the grounds on which the requesters were selected for audit and to information gathered by the Special Enquiry Branch of the Office of the Chief Inspector of Taxes in preparation for this audit on the basis that access could reasonably be expected to prejudice the effectiveness of audits conducted by the Revenue and to prejudice the enforcement of income tax law and that these records were exempt under sections 21(1)(a) and 23(1)(a)(ii) of the FOI Act. (Group 5 records)
• access was refused to computer printouts of taxpayer searches which, in addition to the requesters, included personal information about other taxpayers on the basis that these records contained personal information about other taxpayers and were exempt by virtue of section 28 of the FOI Act. (Group 6 records)
• codes from computer printouts were deleted on the basis that their release would prejudice the security of the system of internal communication within Revenue and were exempt by virtue of section 23(1)(a)(viii) of the FOI Act. (Group 7 records)

In a letter received on 28 July 1998, the requesters sought an internal review of this decision. On 30 July 1998, the Revenue informed the requesters that certain records relating to a prosecution report were also not being released by virtue of section 46(1)(b) of the FOI Act as the Act does not apply to records held by or created by the Office of the Director of Public Prosecutions. The Revenue undertook that the refusal of these further records would be looked at again in the internal review.

On 17 August, the Revenue informed the solicitors that the original decision had been upheld on internal review, with the modification that access to a file held by the Revenue Solicitor's Office which was not addressed in the original decision was also being refused under section 22(1)(a). In a letter dated 30 September 1998, the solicitors for the requesters applied to this Office for a review of this decision.

The request appears to have been prompted by a tax audit carried out by the Revenue into the tax affairs of the requesters. As a result of this audit the Revenue decided that the requesters had underpaid tax. The Revenue made an "additional assessment" on foot of which this extra tax was demanded. The requesters appealed this assessment to the Appeal Commissioners for the purposes of the Tax Acts and the Commissioners confirmed the Revenue assessment. A further appeal to the Circuit Court by the requesters has now been made. As a result of certain events which occurred during the course of the audit, Mrs ABJ was prosecuted and convicted of knowingly or wilfully producing an incorrect document in relation to tax.

I accepted the application for review. Both the Revenue and the requesters were invited to furnish submissions and I have considered the submissions received from both parties in the course of this review. The Revenue also informed me that they did not intend releasing their prosecution file to my Office. My officials sought clarification as to the basis for this refusal and the nature of the records concerned.

On 31 March, 1999, after my officials had met and held a number of discussions with the Revenue about this case, I formally invoked my powers under section 37(1) of the FOI Act and required the chairman of the Revenue Commissioners to furnish the outstanding records to me. I received a satisfactory response on 14 April 1999.

During the course of the review, the requesters indicated that they were willing to accept the refusal to grant access to the computer codes. They also informed my Office that certain copies of records released to them were not legible. My officials brought the legibility issue to the attention of the Revenue and I understand that this has now been satisfactorily resolved.

The requester also raised the question as to whether the records released should have been scheduled in some way since it proved difficult to keep track of the papers released. Following detailed consultation with my officials, the Revenue agreed to the release of a schedule of records to the requester. The Revenue numbered all the records as part of the scheduling exercise and I have adopted their numbering system for the purpose of identifying records in this review. For ease of reference, I have also used the same grouping of records as was used in the internal review.

Towards the conclusion of the review, the Revenue accepted that certain further records had been revealed at the hearing before the Appeal Commissioners and agreed to release record numbers 301, 343, 344, 395, 396 and 406-410 to the requesters. These records are excluded from the scope of this review.

Submissions

The requesters

The requesters submitted that access to Group 1 records was required to complete the record of an interview which had been released to them. They stated that there was no evidence that the information in these records was provided to the Revenue in confidence and claimed that access was required to allow them to exercise their rights to have incomplete, misleading or incorrect information corrected under section 17 of the FOI Act.

Regarding Group 2 records, the requesters accepted that five records containing correspondence between the Revenue and its solicitors attracted legal professional privilege but could not see how this applied to the record in respect of which there had been a partial refusal of access. My officials pointed out that this record documented a sequence of events and the requesters accepted that reference to legal advice could also attract legal professional privilege.

Regarding Group 3 records, the requesters contended that section 46 of the FOI Act does not cover reports prepared by the Revenue for the Director of Public Prosecutions and did not accept the claim for exemption under section 46.

Regarding Group 4 records, the requesters pointed out that it was difficult to decide whether the claim for exemption under section 23 was properly invoked without knowledge of the records concerned but submitted that the refusal to release the records may impair the fairness of their treatment by the Revenue.

Regarding Group 5 records, the requesters submitted that if the claim for exemption under section 21(1) was sustained, the public interest might still require the release of the records. It was also claimed that section 21 related to broader issues such as audits of public bodies in relation to their commercial activities rather than audits of the personal taxation affairs of an individual taxpayer.

Regarding Group 6 records, they accepted the claim for exemption of personal information relating to other taxpayers and this element of the review was thus satisfactorily resolved.

Regarding Group 7 records, the initial submission did not accept that the revelation of computer codes would prejudice or impair the security of internal communication within the Revenue. My officials subsequently explained the purpose of these codes which was the categorisation of income and case processing and the requesters accepted that access was not necessary. This aspect of the review was thus satisfactorily resolved.

Mrs ABJ added in telephone discussions with my officials and written submissions that the grounds for audit were well known to tax consultants and the general public and that the release would not prejudice the effectiveness of other audits. During the course of the review, Mrs ABJ claimed to know the identity of one person who was interviewed by the Revenue and that she knew what he said. She said that she wanted to check how this was recorded by the Revenue.

The solicitors for the requesters also highlighted the fact that no records appeared to exist on file between March 1997 and January 1998. They were concerned that the Revenue were interpreting the wording of their request in a narrow way which would allow the Revenue to reduce the scope of the request and to avoid releasing records sought.

The Revenue

The Revenue stated that it is clear that one record (record number 437) in Group 1 could reasonably be expected to reveal the identity of a person who gave information to them in confidence and that section 46(1)(f) provides that the FOI Act does not apply to such records. In relation to the other records in this Group, it stated that these could also lead to the revelation of the identity of persons contrary to their understanding that their identity would not be revealed.

In relation to Group 3, the Revenue stated that a file held by the Revenue was actually a file of the Director of Public Prosecutions and therefore not subject to the FOI Act by virtue of section 46(1)(b). It was clarified that this file was physically located in the Revenue at the time the request was received but under the control of an officer of the Director of Public Prosecutions who works from the premises of both the Revenue and the DPP. Following the conclusion of the criminal case, this file was put away in the Office of the DPP.

Regarding records in Group 4, the Revenue stated that the intention of the legislation governing appeal hearings is that an oral hearing is the means by which the appeal is determined by the Appeal Commissioners. They stated that a requirement that the tax inspector reveal his proposed conduct of a case, in the absence of such a requirement on the other party, would be manifestly unfair. They accepted that this exemption would not apply when the appeal is fully determined, either by the Appeal Commissioners or the courts. The Revenue stated that the Appeal Commissioners are a tribunal and thus section 23 can apply. Regarding the records in Group 5, the Revenue stated that the effectiveness of audits will be diminished if accountants and tax practitioners are able to create a comprehensive picture of the grounds for selection of taxpayers for audit. They accepted that there was a public interest in taxpayers knowing why they were selected but stated that there was a stronger public interest in ensuring that audits are effective. They also pointed out that the release of grounds for selection in certain cases but refusal in others where informant (their word) information was available would allow the subjects of an audit to deduce that the audit was prompted by an informant. In certain cases, this could lead to the identification of the informant. The Revenue also pointed out that the revelation of the amount of information available to Revenue would influence taxpayers in their decision on how much information to disclose to the Revenue. Highlighting gaps in the information available to the Revenue would reassure taxpayers that they could safely avoid full disclosure. They also contended that in so far as disclosure would prejudice the effectiveness of audits, that disclosure would also prejudice the enforcement of tax law.

Essentially, the Revenue contended that the information available to it and the decision on what to reveal and when to reveal it was an important tactical weapon in the tax inspector's armoury and that the imposed release of information under FOI would prejudice the effectiveness of the tax administration system.

Findings

In the light of section 43 of the Act, which requires me in the course of a review to take all reasonable precautions not to disclose the information contained in an exempt record, I need to exercise a degree of circumspection in describing the records in this case and in explaining my decision lest I prejudice the Revenue's ability to appeal my decision should it wish to do so. However, the details given should be sufficient to enable the parties to understand the basis for my decision.

Before explaining my decision, I need to set out more precisely the scope of the present review. In the course of the review, Mrs ABJ has complained about the manner in which access was given to her. More specifically, she has complained that while a significant amount of material was released to her, this was done in a way which made it difficult for her to understand the records, who created them and when and what particular records had been withheld and for what specific reasons. Having examined copies of the records presented to me in this case, I share the requester's concern. The records are difficult to follow and it is not clear whether this is because of poor record keeping by the Revenue in the first place or because records have been copied selectively. I need only remark at this stage that, in my view, the access requirements of the Act may not always be satisfied by the release of large amounts of information which no reasonable person could be expected to understand without some minimal explanation as to their context. However, I consider this aspect of Mrs ABJ's complaint to have been satisfied by the release of the schedule to which I referred earlier.

Mrs ABJ also complained that the Revenue had not disclosed the existence of certain records and she gave specific examples. My preliminary investigations of this matter would suggest that Mrs ABJ is not correct on this point and that she may have misunderstood the basis on which records were being released by the Revenue. Mrs ABJ has indicated that she is anxious to have a decision on the records before me without any further delay. Accordingly, she has agreed that I can confine my review to the question of the Revenue's decision on those records. This is without prejudice to her right to seek an explanation from the Revenue concerning other records and to make a further specific request under the FOI Act in respect of them, if necessary.

I turn now to the records in respect of which the Revenue claims exemption.

Group 1 (Record numbers 301, 343, 344, 437, 438, 441, 443, 444 and part of record number 316)

The decisions of the Revenue at initial decision and internal review stated that access was refused to seven records and part of another one but, in fact, access was refused to eight records and part of another record as numbered above. As noted above, access was subsequently granted to record numbers 301, 343 and 344. This group of records contains details of the investigative process and contacts with other persons in the course of this investigation.

The Revenue claims that section 23(1)(b) applies. This section provides that

"A head may refuse to grant a request under section 7 if access to the record concerned could, in the opinion of the head, reasonably be expected to ...... (b) reveal or lead to the revelation of the identity of a person who has given information to a public body in confidence in relation to the enforcement or administration of the civil law or any other source of such information given in confidence"

Record numbers 437, 438, 441, 443 and 444 and the part of record number 316 to which access was refused all could reasonably be expected to reveal or lead to the revelation of the identity of a person who has given information to the Revenue in relation to the enforcement of income tax law. Record number 437 is an anonymous letter in which the author makes certain allegations against the requesters. I accept that any of the contents of this letter which might identify the author were given in confidence and therefore that section 23(1)(b) applies. Record numbers 438, 441, 443 and 444 contain details of information given by various occupants of property alleged to be owned by the requesters. From my examination of these records, I am not satisfied that the information contained in them (with the exception of part of record 444) was given in confidence.

There are a number of reasons for this. The first is that I can see nothing either in the circumstances in which the information was provided or in its contents which suggests to me that the providers of the information thought they were giving information in confidence. The second is that I note the existence of an instruction to Revenue staff conducting audits that items of suspected undisclosed income should be identified clearly to the taxpayer. I also note that the Revenue has published in its section 16 manual the fact that it makes use of third party returns and audits of other taxpayers in the conduct of audits. Therefore, I cannot accept that such information is always given to the Revenue by the tenant in confidence and under conditions which preclude it from revealing the existence or content of that information to the landlord, in dealing with the latter's tax affairs.

I should also point out that the Revenue is empowered to seek certain information from tenants about rent paid. In the light of this I doubt very much that tenants who provide such information on foot of a formal requirement from the Revenue generally do so on the understanding that they are giving the information on a confidential basis.

At the same time there will be cases in which information is volunteered to the Revenue which goes beyond what the informant is required to provide either for the purposes of dealing with his/her own tax affairs or on foot of a statutory obligations to do so. Clearly, in many such cases, a more plausible argument can be made that the information was given in confidence.

In my view it is possible to prepare a copy of record number 437 in accordance with section 13 which would not lead to the identification of the parties supplying information and I find that the Revenue is not entitled to refuse access to part of this record under section 23(1)(b).

Record number 438 contains personal information about a third party to which access should not be granted in accordance with section 28(1) and I find that the Revenue is not entitled under section 23(1)(b) to refuse access to the record with appropriate deletions.

As indicated above, I do not accept that the information contained in record numbers 441 and 443 was given in confidence. I find that the Revenue is not entitled to refuse access to these records under section 23(1)(b).

As regards record number 444 it appears to me that some of the information was given in confidence but even releasing the full record will not reveal or lead to the revelation of, the identity of the informant. On this basis, section 23(1)(b) does not apply.

That part of record number 316 to which access has been refused refers to record number 438. I am satisfied that it can be released without any possibility of revealing or leading to the revelation of the identity of any person who provided information to the Revenue in confidence.

The Revenue also claims that, by reference to section 46(1)(f), the FOI Act does not apply to these records and that access cannot be granted to them. As I have already said, much of the information at issue was not given in confidence. I would also have to express considerable doubt that the information in these records was, in fact, given in relation to enforcement of the criminal law. The records are concerned with the administration of tax law, which is a civil matter notwithstanding the fact that it is possible for a taxpayer, through failure to comply with that law, to commit certain criminal offences. In any event, I am satisfied that the deletions to which I have referred above are sufficient to ensure that section 46(1)(f) does not apply.

The requesters' submission stated that access to these records was required to complete the record of an interview which was released to them. This is not a relevant consideration in relation to this section of the FOI Act.

They also referred to the need for access in order to avail of the right under section 17 of the FOI Act to have incomplete, misleading or incorrect personal information corrected. This right would normally be exercised after the granting of access to records reveals a need for such amendment although it is conceivable that a requester may be able to deduce the existence of incomplete, misleading or incorrect information in an exempt record without sight of that record. However, I am satisfied that the right to have records amended does not mean that a requester must be given access to an otherwise exempt record.

They also referred to the public interest in the release of the records and made the point that the public interest includes "that of the requester". If by this they mean that, in considering the public interest, due regard must be had to the rights of any individual under the FOI Act, then I fully agree.

However, in considering the public interest in relation to the possible release of any particular record, I must have regard to the specific provisions of the FOI Act.

In the case of record number 437, I have already found that the Revenue is entitled to refuse access to part of the record by virtue of section 23(1)(b). I note that section 23(1)(b) is subject to the public interest test contained in section 23(3). This section provides that

"(3) Subsection (1) does not apply to a record

(a) if it

(i) discloses that an investigation for the purpose of the enforcement of any law, or anything done in the course of such an investigation or for the purposes of the prevention or detection of offences or the apprehension or prosecution of offenders, is not authorised by law or contravenes any law, or

(ii) contains information concerning

(I) the performance of the functions of a public body whose functions include functions relating to the enforcement of law or the ensuring of the safety of the public (including the effectiveness and efficiency of such performance), or

(II) the merits or otherwise or the success or otherwise of any programme, scheme or policy of a public body for preventing, detecting or investigating contraventions of the law or the effectiveness or efficiency of the implementation of any such programme, scheme or policy by a public body,

and

(b) in the opinion of the head concerned, the public interest would, on balance, be better served by granting than by refusing to grant the request concerned."

Having examined record number 437, I am satisfied that section 23(3) does not apply to it and I find that that full access would not be justified under that subsection.

In the case of record number 438, I have found that access should not be granted to part of the record in accordance with section 28(1). I note that this section is subject to the public interest test contained in section 28(5) which provides that

"Where, as respects a request under section 7 the grant of which would, but for this subsection, fall to be refused under subsection (1), in the opinion of the head concerned, on balance

(a) the public interest that the request should be granted outweighs the public interest that the right to privacy of the individual to whom the information relates should be upheld, or

(b) the grant of the request would benefit the individual aforesaid,

the head may, subject to section 29, grant the request."

Having examined record number 438, I am unable to see any public interest in releasing the full record which would outweigh the public interest in protecting the privacy of the party whose details I have found should be deleted. Accordingly I find that section 28(5) does not require full access to be given to the requesters.

Group 2 (record numbers 320, 321, 326, 328, 647-656 and a file held by the Revenue Solicitor's Office)

The initial decision stated that access was refused to five records and part of another record under section 22(1)(a) of the FOI Act in the initial decision. This section provides that

"(1) A head shall refuse to grant a request under section 7 if the record concerned

(a) would be exempt from production in proceedings in a court on the ground of legal professional privilege,"

The internal review decision disclosed that there was also a refusal of access to the file held by the Revenue Solicitor's Office but this still failed to reveal the extent of the refusal of access as required under section 8 by the omission of record numbers 647-655. Section 22(2) provides that

"Where a request under section 7 relates to a record to which subsection (1)(a)applies, or would, if the record existed, apply, and the head concerned is satisfied that the disclosure of the existence or non-existence of the record would be contrary to the public interest, he or she shall refuse to grant the request and shall not disclose to the requester concerned whether or not the record exists"

The Revenue did not attempt to claim that this section applied at any stage of the review. I can only conclude that, unwittingly or otherwise, the Revenue did not fully explain its decision to the requesters either at initial decision stage or on internal review.

The solicitors for the requesters accepted during the course of the review that legal professional privilege applied to the records as described to them and this part of the review would have been satisfactorily concluded if they had been fully informed of the refusal to grant access. However, to ensure that the requesters' acceptance is fully informed, I have included the records referred to above in my review.

As I have stated in previous decisions, the question of whether section 22(1)(a) applies comes down simply to whether or not the Revenue would succeed in withholding the documents on the ground of legal professional privilege in court proceedings. The records consist of correspondence to and from the Revenue Solicitor, correspondence between Revenue officials and memoranda written in preparation for the prosecution of Mrs ABJ by the Office of the Director of Public Prosecutions. Having examined the records, I am satisfied that these records consist of legal advice sought and obtained from professional legal advisers or records created in contemplation of legal proceedings.

There are some situations in which legal professional privilege may not attach to communications between lawyer and client such as non-confidential communications or legal assistance other than the giving of advice or communications in furtherance of a criminal offence. I am satisfied that these exceptions do not apply here. Accordingly, I must hold that the Revenue is entitled to claim exemption in respect of these records.

Group 3

These records relate to the prosecution of Mrs ABJ by the Office of the Director of Public Prosecutions. They contain correspondence to and from that Office. I have decided that all such correspondence was created in contemplation of legal proceedings and that the Revenue is required to refuse access under section 22(1)(a), as is was in respect of the records in Group 2. It is also clear that some of these records were created by the Office of the Director of Public Prosecutions. They are not concerned with the general administration of that Office but rather with the prosecution of Mrs ABJ. It is clear that by virtue of section 46(1)(b), the FOI Act does not apply to such records.

Group 4 (Record numbers 393, 393A, 395, 396, 400-404, 405 A-D, 406-421)

These records relate to a (then) future hearing before the Appeal Commissioners and access was refused by virtue of section 23(1)(a)(ii) and (iv) of the FOI Act. These sub-paragraphs provide that

"(1) A head may refuse to grant a request under section 7 if access to the record concerned could, in the opinion of the head, reasonably be expected to

(a) prejudice or impair .... (i) the prevention, detection or investigation of offences, the apprehension or prosecution of offenders or the effectiveness of lawful methods, systems, plans or procedures employed for the purposes of the matters aforesaid, (ii) the enforcement of, compliance with or administration of any law, ....

(iv) the fairness of criminal proceedings in a court or of civil proceedings in a court or other tribunal,"

When the request was made, the case was before the Appeal Commissioners but the case is now before the Circuit Court by way of further appeal so the question of whether or not the Appeal Commissioners are, in fact, a tribunal is no longer relevant. Of course, the Circuit Court of Justice is a court and the Revenue continues to claim that the release of these records would prejudice or impair the fairness of these proceedings. As noted above, they have now agreed to release record numbers 395, 396 and 406-410 so this review concerns the outstanding records only.

Before dealing with the Revenue's arguments I should record briefly the nature of the tax administration regime, insofar as it applies to the requester. The tax system in Ireland which applies to the self-employed, to individuals in receipt of investment income and to companies is a 'self-assessment' system.

What this means is that the taxpayer is obliged to make a full and accurate return of income to the Revenue on an annual basis. In many cases this return is accepted by the Revenue without further enquiry and the taxpayer pays tax in accordance with the return. To help ensure proper compliance, the Revenue conducts audits in selected cases. Where taxpayers have been found to have made incomplete returns they face a range of penalties ranging from interest on late payment, to monetary penalties (fines) or even imprisonment.

At the commencement of an audit the taxpayer is given an opportunity to correct any deficiencies in his/her return. In some cases, the outcome of an audit is that the Revenue finds no reason to dispute the return. In others, the taxpayer accepts that there has been a deficiency of some kind and the matter is resolved by the payment of the tax and appropriate interest and penalties. However, in some cases (such as the present) the outcome is that the taxpayer and the Revenue cannot agree as to the tax underpaid, if any.

In these cases the Revenue makes an assessment to tax, which, when it becomes final, allows the Revenue to enforce payment, if necessary, through the Courts. Such an assessment is subject to appeal, first to the Appeal Commissioners, then to the Circuit Court and, if necessary, to the High Court on a point of law.

It will be appreciated from this brief summary that the successful operation of the self-assessment tax system depends on a significant degree of co-operation from the taxpayers concerned. If that co-operation was not forthcoming, for example, because large numbers of taxpayers refused to submit returns or to deal fully with matters raised in the course of an audit or insisted on appealing all assessments, then the system could become unworkable. In saying this I am not questioning the motives of any taxpayer who avails of his/her rights of appeal. I make the point simply to emphasise how the success of the system depends on the co-operation of taxpayers.

I will deal first with the question of whether access to these records could reasonably be expected to prejudice or impair the enforcement of, compliance with or administration of income tax law in accordance with section 23(1)(a)(ii). The Revenue accepted in their submission that these exemptions would not apply when the appeal is finally decided and did not indicate any other exemption which might apply at that stage. In Case Number 98086 which concerned access to certain records which had been refused under section 23(1)(a)(i) as opposed to section 23(1)(a)(ii), I accepted the general proposition that "an investigator must be allowed a fair degree of latitude, subject to the need for fair procedures, to decide when information already in his or her possession should be made available to a party which is the subject of the investigation. If a party subject to investigation by a public body has a right to be fully informed at all times of the state of knowledge of the investigating authority, then it would appear to be inevitable that this would impair the investigation of offences."

In this particular review and at this point in time, the audit or investigation has been concluded and the Revenue are claiming that the release of the records would prejudice or impair the enforcement of, compliance with or administration of income tax law. My remarks in the above mentioned case are equally applicable to the circumstances of this case. The tax official must be allowed a fair degree of latitude to decide when information should be made available to the tax payer. Indeed, in the light of my earlier description of the self-assessment system, it seems to me that, in the normal case, the decision on when to release information must remain with the investigating tax official right up to the time that an assessment is made. However, having made an assessment of the tax due, I consider that the situation changes.

It is not clear to me how, generally speaking, disclosure of the kind of information contained in these records, after an assessment has been made, would prejudice or impair the enforcement of, compliance with, or administration of the tax law either generally or in the specific case of Mrs ABJ. It is possible that, in certain cases, a complete lack of co-operation by the taxpayer before and during a Revenue audit might lead to the making of an assessment which was then appealed for the purposes of delay or with a view to forcing the Revenue to show its hand. In such cases the administration of the tax law could be impaired by release. Were such a case to come before me I might take such a view, depending on the evidence. I note that Mrs ABJ was convicted in respect of certain actions which occurred during the Revenue audit and this could be taken as an indication of a lack of the kind of co-operation to which I am referring. Nevertheless, having examined the contents of the records, I am satisfied that the harm envisaged in section 23(1)(a)(ii) will not occur through their release.

I now turn to the second argument made by the Revenue. The Revenue states that the release of the records, in the absence of a similar requirement in relation to the appellant, would be manifestly unfair. However, a feature of trials in certain criminal courts is the serving of the Book of Evidence in which the prosecution discloses the evidence which it will be presenting during the course of a trial. This manifestly does not affect the fairness of such a trial. Therefore, the making available of evidence in advance by the Revenue does not, in principle, prejudice or impair the fairness of the appeal hearing proceedings. There could, of course, be cases where disclosing the evidence in advance could allow a taxpayer to manufacture or destroy evidence or perhaps to interfere with witnesses. In such cases the fairness of proceedings could be impaired or, in the alternative, the enforcement of, compliance with or administration of the law could be prejudiced or impaired. No specific case has been made to me along these lines in relation to Mrs ABJ's appeal.

The records also appear to contain notes made by one or more Revenue officials for use by them in conducting their case before the Appeal Commissioners. As a general point, I would accept that the release of such material is likely to prejudice the fairness of future appeal proceedings. The Revenue has made the point that the Appeal Commissioner proceedings are conducted orally. Neither side is obliged to disclose its position fully in advance. It seems to me that the imposition of a requirement on the Revenue to disclose its proposed conduct of a case in advance without a corresponding requirement in the case of the appellant would, in many cases, impair the fairness of the proceedings. However, while I accept this as a general proposition, I am not convinced that the same considerations apply in this particular case. The Appeal Commissioner hearing is over at this stage. It is fair to assume that some of the material contained in the disputed records was revealed to the requesters at that hearing. The Revenue has agreed to release some of the records, presumably for that reason. However, the Revenue has been unable to explain to me what exactly transpired at the appeal hearing. Nor has the Revenue explained what specific aspects of the remaining records are of significance or how they would reveal anything to the requesters which they do not already know from the appeal hearing or from the other records.

The Revenue's refusal to release the records at this stage seems to be prompted largely by the fact that an appeal to the Circuit Court is still open. The Revenue has not satisfied me that the release of these records would actually prejudice or impair the fairness of the proceedings in the Circuit Court and it is not entitled to refuse access under section 23(1)(a)(iv).

Many of these records are a summary of the information available to the Revenue and include references to other records for which the Revenue claimed exemptions. I am satisfied that these records should be released subject to deletions in respect of record numbers 405C and 421. These deletions are required to avoid the release of information which might lead to the revelation of the identity of a person who provided information in confidence to the Revenue in relation to the enforcement of tax law

Other records in this group contain information about third parties. In most cases this is not personal information since it is already in the public domain. However, there is a number of items of personal information about a third party. Section 28(1) provides that access to a record shall be refused where it would involve the disclosure of personal information about a third party. The requesters were the source of the information and I am satisfied the release of these records would not involve the disclosure of personal information.

Group 5 (Records number 261-265 and 433-436)

The Revenue submitted that the release of these records would prejudice the effectiveness of audits conducted by the Revenue Commissioners. The requesters' solicitor raised the issue as to whether this section only applied to audits of public bodies but I am satisfied that the ordinary meaning of the word "audit" is "Official examination of accounts with verification by reference to witnesses and vouchers" (OED) and is not restricted to audits of public bodies.

Section 21(1)(a) provides that

"(1) A head may refuse to grant a request under section 7 if access to the record concerned could, in the opinion of the head, reasonably be expected to

(a) prejudice the effectiveness of tests, examinations, investigations, inquiries or audits conducted by or on behalf of the public body concerned or the procedures or methods employed for the conduct thereof"

It is clear from the totality of section 21(1)(a) that the exemption applies to tests, examinations, investigations, inquiries or audits conducted by or on behalf of public bodies and that this not only concerns these tests, examinations, investigations, inquiries or audits being carried out on other public bodies but also such tests, examinations, investigations, inquiries or audits by public bodies in relation to other parties. In Case Number 98086 mentioned above, I held that an investigation being carried out by the Department of Agriculture and Food into interference with cattle tags was within the scope of section 21(1)(a). Similarly, I have decided that an audit being carried out by the Revenue is within the scope of section 21(1)(a).

The Revenue's main concern appears to be that the records would reveal the audit selection criteria used by them. I should make it clear at this stage that these records do not contain a comprehensive list of the Revenue's audit selection criteria. They seem to contain the criteria on which this particular case was selected for audit, although this is not particularly clear in the case of some of the records.

There is a number of problems with the Revenue's argument. The first is that even if the Revenue's selection criteria were published, it does not follow that taxpayers who are determined to evade tax will be able to organise their affairs so as to avoid any possibility of selection in the future. The second is that, in a general way, many taxpayers and their agents know the way the Revenue select cases.

For example, in 1990, a Revenue official (Mr Hanrahan) told an Institute of Taxation seminar that "it is hoped over time to develop a comprehensive method of pre-selection by computer of returns for audit. In the meantime, cases will be selected by Inspectors for audit on the basis of certain features present in the return or accounts or by reference to information arising from external sources or the audit of another taxpayer". More recently the Revenue have targeted certain industries and this has been widely reported in the national media.

It must also be the case that in individual cases, taxpayers or their advisers will be able to determine why a particular case was chosen merely from the way the investigating officer conducts the audit, from the areas concentrated on or the questions asked.

It follows that however important the Revenue might think their audit selection criteria to be, it is not really possible to keep them an absolute secret - even if that were desirable. Having examined the records in this case I am satisfied that, even if the selection criteria used in this case can be clearly identified, the disclosure of these criteria to Mrs ABJ or, indeed, to anyone else, will not prejudice the effectiveness of Revenue audits.

As a slightly separate point the Revenue argued that some of the records showed how the Revenue went about gathering information, what sources of information were available to them and how they conducted their audits and that disclosing this would prejudice the effectiveness of audits. In my view this argument has a similar flaw to that pertaining to the selection criteria. By and large I am not convinced that these are matters which the Revenue are capable of concealing from taxpayers or their advisers. More specifically, I am not satisfied that there is any source or investigative method revealed by the records in this case, the disclosure of which would be exempt under section 21(1)(a) or section 23(1)(a)(i) or section 23(1)(a)(ii). I leave open, for the moment, the possibility that in a specific case in the future a source or investigative method might merit protection under one or more of these provisions.

Turning to the individual records, I note that record number 261 reveals a source of information used by the Revenue. I am not inclined to accept the argument that this knowledge could be used by evaders to avoid alerting the Revenue Commissioners to possible evasion and therefore could prejudice the effectiveness of such audits. Record numbers 262, 263 (and 264 which is a copy), 433 and 434 reveal the work done in the course of the audit but I am not satisfied that their release would prejudice the effectiveness of such an audit or of other audits. Record number 265 may reveal the basis for the selection of this taxpayer for audit but I am not satisfied that its release would prejudice the effectiveness of this or other audits.

Record numbers 435 and 436 contain personal information about other individuals in addition to the requesters. I am not satisfied that their release would prejudice the effectiveness of audits and do not accept that section 21(1)(a), section 23(1)(a)(i) or section 23(1)(a)(ii) applies. However, access to the information about other individuals should be refused under section 28(1) and access should only be granted to the parts of the records relating to the requesters. Indeed, the requesters accepted partial access to the records in Group 6 on this basis.

Groups 6 and 7

The requesters were satisfied with the internal review decision after the intervention of my officials and this aspect of the review was accordingly settled.

Decision

Having considered the decision of the Revenue, both initially and on internal review, I have decided to vary the decision of the Revenue Commissioners in relation to access to the outstanding records as follows:

Grant access to record number 261-265, 316, 393, 393A, 400-404, 405A, 405B, 405D, 411- 420, 433, 434, 441, 443 and 444 in full

Grant partial access to record numbers 405C, 421, 437 and 438, in accordance with schedule A

Grant partial access to record numbers 435 and 436 subject to the deletion of the information about third parties.

I have decided to affirm the decision of the Revenue to refuse access to the records in Groups 2 and 3

Schedule A

Amendments required under section 13 to avoid revealing or leading to the revelation of the identity of a person who has given information to a public body in confidence in relation to the enforcement or administration of the civil law or any other source of such information given in confidence or personal information about third parties.

Record number 437A transcript of the record with the description of the first mentioned person other than the requester removed.

Record number 438Delete second paragraph Delete fourth paragraph

Record number 405CDelete the words after "spoke" in the first paragraph up to the end of the paragraph

Record number 421Delete the words after "spoke" in the first paragraph up to the end of the paragraph

Information Commissioner

23 September 1999