LEGAL CHALLENGES by musical duo Foster and Allen to demands by the Revenue Commissioners for about €3 million each for unpaid taxes have been dismissed by the High Court.
They had unpaid taxes of about €1 million each but the total amounted to more than €3 million because of penalties and interest charges.
The Revenue sought summary judgment for €3.389 million against Anthony Allen, Kileenatoor, Mount Temple, Co Westmeath, for unpaid income taxes and penalties between 1986 and 1997. Mr Allen argued yesterday he had a bona fide defence to the demand and the matter should go to full hearing.
In separate proceedings, Michael Foster, Walshtown, Mullingar, Co Westmeath, asked the court to set aside a summary judgment order for €2.947 million obtained by the Revenue in December 2008 over unpaid taxes from 1986 to 2002.
Gary McCarthy SC, for the Revenue, opposed both applications.
Giving his decision, Mr Justice John Hedigan said the musicians had brought “great joy” to many over the years.
Saying he was sorry but he had to rule against them, he granted summary judgment for €3.389 million against Mr Allen after finding he had made out no arguable defence to the Revenue claim which would entitle him to a full hearing.
Mr Foster’s bid to set aside the 2008 judgment was “a hopeless application”, having let the judgment against him “sit unchallenged” for two years.
In affidavits, both men argued the Revenue was not entitled to judgment against them on grounds including that the basis for income tax liability for each of the years was not set out and they were entitled to claim Artists Exemption Relief.
They claimed their then advisers and the Revenue agreed in 1998 their liability up to 1997 was £175,000. It was further claimed that the Revenue was not entitled to impose a 10 per cent surcharge for late submission of returns.
Both men also claimed they were victims of a fraud perpetrated on them by Patrick Russell, Steelstown, Rathcoole, Co Dublin, an accountant and barrister engaged by them to resolve their tax affairs.
They said they each paid Mr Russell €50,000 to settle in full their tax liabilities and he had supplied them with a letter from Revenue saying their tax affairs were in order.
Revenue had not received that money and the letters were forgeries, they claimed.
The court was told Mr Foster had told a Revenue official that people thought the duo were “multimillionaires” and compared them favourably to U2, but the reality was that neither man had made a lot of money.
David Goldberg SC, for the two, said they had been trying to deal with matters and were entitled to a full hearing. They did not have all the documentation required to meet Revenue’s demands which were of some “antiquity” and they had been tax-compliant with regard to other matters, Mr Goldberg added.
Mr McCarthy, for the Revenue, argued Mr Allen had no bona fide defence to the Revenue claim while Mr Foster had delayed “inordinately” in seeking to set aside the judgment against him.
An application for Artists Exemption Tax in 1981 was deemed incomplete and was never followed up, he argued.