Internal inquiries at Irish Permanent, First National

A bank and a building society are conducting internal inquiries into their responses to Revenue requests for information about a Galway businessman. The Galway Circuit Court heard last week that, when asked, the Irish Permanent told the Revenue it had one account belonging to Patrick Walsh (40), of Lisnacree, Frenchfort, Oranmore, Co Galway. In fact, Walsh had six accounts with the building society turned bank.

First National Building Society told the Revenue Walsh had two accounts with them. In fact, he had four.

Walsh, who runs a successful heating and plumbers' supplies business, Walsh's Wholesale Ltd, at Ower, Headford, Co Galway, was given a two year suspended sentence when he pleaded guilty to nine charges of knowingly making incorrect personal income returns and six incorrect returns for corporation tax. He was not available for comment this week.

He is the first person to receive a custodial sentence for evading income tax. Previous custodial sentences have been in relation to non-payment of VAT. A number of other income tax cases are expected to come before the court before the end of the year. The two institutions refused to comment on whether they were being pursued by the Revenue Commissioners in relation to their responses in the Walsh case. A Revenue spokeswoman also refused to comment.

First National was served with a High Court order under Section 18 of the 1983 Finance Act, one of the strongest powers in the Revenue arsenal. They were asked for details of all Walsh's accounts. Mr Brendan Crawford, from the Revenue investigations branch, told the Galway court that an official of the Irish Permanent had stated in a letter that Walsh had only one account at its Galway Shopping Centre branch. In fact he had five.

When Walsh eventually gave Mr Crawford a list of undisclosed accounts, Mr Crawford said, he was "shocked and flabbergasted". The accounts contained £547,000 over and above what the Revenue already knew about. In all, Walsh ended up with a tax liability of £1,087,000.

As well as two accounts in Galway, Walsh had First National accounts in Athlone, Co Westmeath, and Stillorgan, Co Dublin. The Athlone account was a non-resident account. Walsh also had AIB and Irish Permanent accounts in the Isle of Man, and a non-resident account with AIB in Stillorgan.

A spokesman for the Irish Permanent said: "We are now carrying out an internal investigation in relation to the matters raised in court." He said it was the group's policy to comply fully with appropriate disclosure to the Revenue. He pointed out that it had not been served with a High Court order.

A spokeswoman for First National said it was not its policy to comment on individual cases but it was inquiring into the response to the court order. She said, "while at all times respecting customer confidentiality, First National Building Society complies with the law and, as in the case of information sought through court or statutory orders, supplies information that is specifically and legally required by the relevant authorities."