`Plain people of Ireland salting away money' inspector

The Revenue Commissioners are investigating DIRT-related irregularities in a number of banks on amounts varying from £30,000 to £1.4 million.

Mr Paddy O Donghaile, director of prosecution policy and principal inspector of taxes, told the inquiry the commissioners now have the power to go back as far as they want in their audits.

He said that, while the banks may not have operated the DIRT regulations correctly, the depositors were not "naive innocents". In effect, "the plain people of Ireland were assiduously salting away their money in various ways".

The chief inspector of taxes, Mr Christopher Clayton, pointed out that DIRT was a self-assessment tax and the Revenue had a right to expect the banks would obey the law, even if there was no policing.

Mr Clayton said that when dealing with certain institutions they tended to assume their compliance would be high. "Clearly, these assumptions were not always justified." They now had "real powers of inquiry and we're using those powers".

Giving details of recent irregularities, Mr O Donghaile said that following inquiries the Revenue had a series of meetings with the Agricultural Credit Corporation, the upshot of which was ACC had offered a payment for DIRT and tax in the region of £1.4 million. The Revenue could not make a final decision until it conducts its own audit.

At the AIB branch in Stillorgan, Co Dublin, after an investigation of a taxpayer, the bank remitted £26,524.71 in DIRT and interest last October and a further £8,907.56 in April.

The Revenue refused an offer of £52,000 from Guinness & Mahon to cover DIRT and arrears from Irish currency "Ansbacher deposits". The bank has sought legal advice and contended that the larger volume of money in those deposits did not come within the scope of DIRT legislation. Mr O Donghaile agreed the bank's legal challenge was a "serious one".

The commissioners were also in discussions with National Irish Bank about tax evasion, DIRT and other issues after an allegation that Irish resident taxpayers had a facility to send their money "out of the country while at the same time having access to it within the country". NIB had offered £337,915 but the case was "absolutely not" closed.

Mr Pat Rabbitte asked why the Revenue did not go to other towns besides Miltown Malbay, Co Clare, where it recovered almost £2 million in undisclosed income and £200,000 from DIRT.

Mr O Donghaile said it had dawned on him that if it was happening in Miltown Malbay it could happen in other places. But with inquiry work "sometimes you're lucky and sometimes you're not and in this particular situation we were lucky".

Mr Rabbitte suggested that saying Miltown Malbay was an exception was "a bit like being assured that we've abolished bovine tuberculosis over the last 50 years, isn't it?"

The inquiry continues on Tuesday.