Michael Lowry's refrigeration business made a loss in 2002, the year it lost Dunnes Stores as a major customer, the tribunal heard.
Figures displayed at the tribunal showed that in 2002 Mr Lowry's company, Garuda Ltd, made a loss of €143,000, having made a profit of €80,000 the previous year.
The company's sales dropped to €2.6 million in 2002, having been €4.4 million a year earlier.
In 2003, Mr Lowry's tax agents, Denis O'Connor and Neale O'Hanlon, of Brophy Butler Thornton accountants, were in negotiation with the Revenue about the tax liabilities of Mr Lowry and Garuda. The bulk of the liabilities was owed by Garuda and was in respect of payments from Dunnes Stores.
Mr Lowry's agents told the Revenue he and Garuda were not in a position to pay the entire liability being sought.An offer of slightly more than €1 million was not accepted by the Revenue. Nor was an offer of €1.334 million.
Eventually an offer of €1.434 million was accepted, but subject to a number of conditions. The sum involved a 45 per cent concession on interest and penalties owed by Garuda.
Principal officer with the Revenue, Aidan Nolan, told Jacqueline O'Brien SC, for the tribunal, that the Revenue might still seek some of the interest and penalties due from Garuda, that had not been paid due to the company, and Mr Lowry, being unable to pay. The amount involved was €445,000.
No settlement had yet been agreed with Mr Lowry and it was not until that time arrived that a final decision would be made on the issue, he said.
When Ms O'Brien asked if there was any reality in this position, he said there was. At the time the matter is eventually finalised, "if it transpires there is more funds available, I will have to go after it", Mr Nolan said.
He said he believed a settlement with Mr Lowry was unlikely to be approved by the board of the Revenue until the tribunal had inquired into the issue of whether Mr Lowry had any involvement in a property deal in the late 1990s involving the Doncaster Rovers stadium.
Mr Lowry's advisers have told the Revenue he had no involvement in the deal. Another issue relevant to any settlement was the fact that papers on the case had been referred to the Director of Public Prosecutions.
Mr Nolan said that in 2003 "Garuda lost its main customer, had reduced the amount of trading it had done with Dunnes Stores, and it was seeking to get new customers". He said that Garuda was seeking a C2 certificate, a "constructor's cert".
It had not needed one when it used to work for Dunnes Stores but working with the developer of a shopping centre, installing refrigeration, the main contractor might seek a C2.
He said he believed no such certificate had yet been issued to Garuda, although it was seeking one. Similarly, Mr Lowry had not been granted a tax clearance statement in relation to his position as a TD.