AIB believes the Revenue Commissioners offered the bank a deal in 1991 which involved the non-payment of DIRT due on bogus non-resident accounts from before April 1990.
But the Revenue chairman, Mr Dermot Quigley, told the Dail Committee on Public Accounts yesterday he did not accept any such deal was agreed.
The bank's view on what was agreed as part of a 1991 Revenue initiative to clean up non-resident accounts will be outlined to the committee tomorrow when AIB chief executive Mr Tom Mulcahy will be a witness.
The Central Bank governor, Mr Maurice O'Connell, will also appear before the committee tomorrow.
Internal bank documents, details of which are published in the Vincent Browne column in today's Irish Times, indicate AIB believed that in return for improving its procedures on the opening of non-resident accounts, it was offered a deal whereby DIRT due on bogus non-resident accounts from before April 1990 would not have to be paid.
DIRT was introduced in 1986, but did not apply to non-resident accounts.
Addressing the Dail committee yesterday the Revenue chairman said: "AIB apparently takes the view that there was to be no retrospection for DIRT, but this view is not supported by the documents that have been received and Revenue is not accepting it."
He denied any sort of "sweet deal" was entered into with AIB in 1991, "let alone a sum of £14 million from AIB in settlement of an alleged tax liability of £100 million."
"There was no settlement in respect of a specific amount of DIRT payable. The onus was on the bank to pay the appropriate amount."
He said the bank has handed over copies of internal audit documentation which has been referred to in the media, and the accuracy of the detail contained in these documents was now being assessed. "We are pursuing with them the question of the tax liability to the Exchequer."
The chairman said that contrary to the impression given over the past few days, the Revenue Commissioners "really have very limited powers in the financial area".
Asked if he had ever received political representations in relation to bogus non-resident accounts at AIB, he said: "Absolutely not. No approach of any kind."
The details of the bank's understanding of the 1991 DIRT negotiations are given in Vincent Browne's column.
A memo drafted by Mr Jimmy O'Mahony, AIB Group Taxation Manager, following a meeting on February 13th, 1991 with Senior Revenue Inspector, Mr D.A. MacCarthaigh and other officials, states that the Revenue "now wish to provide AIB Bank, together with all other financial institutions, an opportunity to `put their house in order' with no retrospection prior to 5th April 1990."
The memo also notes the Revenue's concern that, because AIB has offshore facilities, funds might be transferred there in breach of exchange control provisions.
The difference in understanding between the Revenue and AIB on the retrospection issue indicates that a major focus of the Revenue inquiry is possible DIRT payments due from bogus non-resident accounts opened between the introduction of DIRT in 1986, and April of 1990.
According to an AIB statement last week, a Revenue initiative on non-resident accounts in February 1991 led to AIB making additional DIRT payments, in September 1991, of £9 million for 1990/1991 and £5 million for 1991/1992.
The statement did not mention any payments in relation to earlier years.
The Revenue was criticised strongly by committee members yesterday about its attempts to discover the number of bogus non-resident accounts at AIB.
The committee chairman, Mr Jim Mitchell (FG), said he was "very disappointed with the attempts of the Revenue" to pursue the issue with AIB.
During yesterday's hearing Mr Quigley told Ms Beverly Cooper-Flynn (FF) that the Revenue "learnt nothing new about bogus non-resident accounts from the returns made during the tax amnesty".
He said a provision allowing the Revenue to order documents from banks was taken out of previous legislation by politicians. The current system means that financial institutions "police themselves", he said.