Some 115,000 old age pensioners are due to receive letters in the coming weeks telling them they are liable for extra tax payments in 2012 because of an underdeclaration in their pension incomes.
The tax bills are in relation to people who were in receipt of both an old age pension and a secondary private pension.
The issue came to light after the Department of Social Protection sent records pertaining to 560,000 pensioners to the Revenue Commissioners.
It found that 115,000 taxpayers were liable to pay more tax in 2012 as their pension had never previously reported by them to Revenue; had been under-reported, or because the taxpayer's circumstances had changed.
In a statement last night the Revenue Commissioners said that in many of these cases the additional liability will be modest.
Approximately 325,000 pension recipients remain unaffected because they either have no other income apart from their old age pension or are exempt from paying tax,.
Another 20,000 taxpayers will pay less tax as their old age pension had previously been overstated.
A further 100,000 records were in respect of people who pay tax on their DSP pension through the self-assessment system.
Advocacy group Age Action said that the announcement meant that law-abiding citizens would now be left with tax bills at the start of a year when there have never been as many demands on their pensions.