The Office of the Revenue Commissioners "would have acted very differently" in relation to AIB's DIRT tax liability in 1991, but was denied knowledge of essential information, according to its statements in the second interim report of the Dail Committee of Public Accounts.

In a strong defence of its action, the Revenue says that it was denied knowledge of essential information "which AIB was obliged to disclose to us".

However, AIB insists that the Revenue was aware of a substantial industry-wide problem in relation to bogus non-resident accounts and offered the bank an agreement which included non-payment on DIRT liabilities prior to 1991.

The second report into the AIB DIRT affair was laid before the Dail last night and confirms wide differences between the Revenue and AIB. Both parties include their own commentary on the recent proceedings before the committee.

The report also includes a claim by AIB that the Revenue Commissioners have only started inspecting declarations of non-residence in AIB since April of this year. In the Revenue's commentary on AIB's evidence, it confirms - as reported in last week's Irish Times - that it first started negotiations with AIB in 1990 in relation to an investigation into two branches where non-resident accounts held by residents had been identified.

Because of "suspicions" that some bank officials may have helped taxpayers hide funds, the Revenue said it initiated discussions with the bank on a wider examination of its procedures. This was discussed at a meeting on February 13th, 1991, it says, as confirmed by contemporaneous notes made by three of its officers at the meeting.

AIB, however, contends that, in a phone-call setting up this meeting, Revenue inspector Mr D.A. MacCartaigh said that if AIB was prepared to be pragmatic, "Revenue are prepared to look forward rather than back". From meetings and phone calls on which it has "detailed file notes", it was led to understand that DIRT tax payments on bogus accounts prior to 1991 would not be sought.

In the February 13th meeting, Mr MacCarthaigh referred to tax being paid on any accounts incorrectly paid gross interest "after today", AIB says.

In a discussion on March 5th, Mr MacCarthaigh gave AIB to understand that he viewed the arrangement as an amnesty up to June 30th, 1991 - subsequently extended to September 30th. But Revenue says it has "no evidence or recollection of any such communication from the bank", no amnesty was given and it had no reason to believe AIB had a major problem.

AIB's commentary says that if the Revenue knew there were only a small number of cases, why did it give AIB several months to examine and regularise the accounts.

The Revenue also says AIB did not communicate with them about the £9 million and £5 million "uplift" in DIRT payments in 1991/92, part of which resulted from reclassifying bogus accounts, despite informing the Central Bank. However, AIB says that the Revenue had access to full information on the amounts of DIRT paid.

AIB says in the report that Revenue had powers to inspect declarations of non-residence and did not exercise them.