Bogus Account Declarations In Ireland Disappointing

by Jason Gorringe, Tax-News.com, London

10 October 2001

As the November 15th deadline for bogus non-resident account holders in Ireland to come forward draws closer, the Revenue department have revealed that the numbers of tax evaders who have actually availed themselves of the voluntary disclosure scheme so far are disappointing.

It is estimated that there are between 25,000 and 50,000 bogus account holders, and optimistic estimates last year suggested that the scheme could yield around £700 million in unpaid taxes, interest, and penalties. However, at the end of July, just £7 million had been collected from 50 delinquent taxpayers.

Voluntary disclosure of unpaid taxes before the deadline means that the defaulter will escape publicity, have the maximum level of interest and penalties capped at 100% of their tax liabilities, will not usually be investigated for prosecution, and will earn credit for DIRT in calculating tax on undisclosed deposit interest. Those uncovered after the deadline, however, face a 'name and shame' campaign, full interest, penalties, and tax payments, and public prosecution.

The Revenue Commissioners are optimistic that there will be a last minute rush ahead of the deadline: 'The level of phone calls we have received, the nature of those phone calls, and the high attendance and specific questions being asked at our seminars would indicate that there is a healthy and active interest in it,' said a spokesman.

However, tax practitioners and experts are not so sure, and think that tax evaders in Ireland are waiting until after November 15th to see what the tax authorities will do. Many believe that their clients are reluctant to make disclosures to the Revenue department because even with the 100% cap on interest and penalty payments, they would lose most or all of their secret stash due to the amount of tax owing. Others feel that the fact that the hidden funds have already been spent may be holding tax evaders back in some cases.

The Revenue, however, appear to be crystal clear on the procedure following the deadline, and are in the process of laying the foundations for investigations: 'The enforcement stage will begin after November 15 and will involve Revenue using powers given by the Finance Act 1999,' confirmed the spokesman. 'We are already in negotiation with the banks about how this information can be passed on efficiently to us and we will ensure each identified bogus account holder, who has not taken the opportunity to disclose and pay voluntarily...will be individually investigated.'

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