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Irish Courts Accused Of Favouring Wealthy In Tax Evasion Cases

by Jason Gorringe, Tax-News.com, London

20 December 2005


An Irish parliamentary committee has criticised the courts for giving lenient sentences in cases of tax evasion by wealthy individuals and businesses.

The Dail Public Accounts Committee expressed concern last week over the "very small" number of prosecutions for serious tax evasion during 2003, when only six sentences were handed down. The members accused the courts of practicing "establishment prejudice" by treating wealthy business people favourably while relatively small fraud cases appeared to be punished with disproportionately stiff sentences.

To illustrate its concerns, the Committee drew attention to a case where a defendant and his company were fined the relatively small sum of EUR1,750 for evading some EUR1.6 million in tax. By contrast, a person who wrote fraudulent cheques totalling EUR5,300 was given a custodial sentence of 18 months.

"There have only been about half a dozen prison sentences handed out for serious tax evasion in the past 10 years and that is very low," observed Committee member and Green TD Dan Boyle.

"We have to move away from fines and towards prison sentences if we are to bring home to people the seriousness of this crime. People who tend to be involved in major tax frauds, by their very nature, are often well off and can easily afford fines," he added.

The Committee's call for tougher penalties for tax crimes comes as the latest 'Defaulters List', published by the Revenue Commission, showed that there were 138 settlements with the tax-man in the three month period to 30 September 2005. Of these settlements, 73 related to holders of bogus non-resident accounts and involved EUR8.99 million. A further 14 settlements related to the Revenue's investigation into offshore funds and involved EUR2.24 million.

In total, the Revenue's probe of bogus non-resident and offshore accounts has netted EUR2.13 billion in unpaid tax.


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