During negotiations with the Revenue authorities concerning tax liability, a Co Tipperary farmer was asked if he would appear as a witness against Allied Irish Banks, the High Court was told yesterday.
Mr Frank Meade, an accountant, was giving evidence during an action against AIB by Mr Michael Gayson (67) of Racecourse Cross, Cashel. Mr Gayson alleges he was given bad advice by an assistant manager in the Cashel branch, Mrs Norrie O'Sullivan, in 1988, when she advised him not to avail of the tax amnesty.
Mr Gayson alleges that, had he availed of the amnesty, he would have paid £84,000 rather than £175,000 (including £60,000 in penalties) which he paid to the Revenue authorities.
Mr Gayson told Mr Justice Geoghegan that a retired manager of the Cashel branch of AIB, Mr Denis Murphy, advised him to put any spare money into a trust fund for his seven children, which would not be subject to tax. He said he was shocked when told in 1991 by the new manager that he would have to pay DIRT, which was introduced in 1986, and that he should have been paying it all along.
During cross-examination by Mr Colm Allen SC for AIB, Mr Meade said that, while negotiating a settlement on behalf of Mr Gayson with the Revenue authorities, Mr Meade drew an inference that the Revenue believed Mr Gayson was not solely at fault and had been misled.
During the negotiations, a Revenue official said this was a very serious matter and asked Mr Gayson if he would be prepared to go as a witness against AIB. There had been a "deadly silence" and Mr Gayson did not answer.
Mr Meade said Mr Gayson's tax returns were compiled from information supplied by his client. Mr Gayson had not been aware that the account was taxable and maintained this throughout the Revenue audit.
The hearing continues today.