Personal bank accounts and records are to be subject to full scrutiny by the Revenue Commissioners in cases where they suspect tax evasion, under the terms of unprecedented new powers announced yesterday.
Tax officials will not have to seek court orders for such investigations, although a warrant will be required to enable them to implement another new provision - the power to enter private property while conducting inquiries.
The measures - detailed in the Finance Bill - are a direct response to the growing list of financial scandals, ranging from the operation of the Ansbacher deposits, secret offshore accounts believed to be held by wealthy Irish business people, to the AIB DIRT tax affair.
Presenting the Bill, the Minister for Finance, Mr McCreevy, said the new powers were a direct response to recent tax investigations and were among the toughest in the world.
He added that he was not prepared to wait for the results of the Moriarty tribunal, whose remit includes advising the Government on what additional powers the Revenue actually needs. But he insisted that if "people have their tax affairs in order they have nothing to fear".
A major debate is now likely on the Finance Bill proposals. Yesterday the president of the Institute of Taxation, Mr Pat Cullen, warned that the new powers were so extensive there might no longer be sufficient checks and balances to protect the rights of innocent taxpayers. A spokeswoman for the Irish Council for Civil Liberties, speaking on RTE yesterday, also expressed concern at the extent of the powers.
Opposition parties, however, gave guarded support. The Fine Gael finance spokesman, Mr Michael Noonan, said "no self-respecting minister of finance could have done less" in the light of the tribunal revelations and banking scandals of recent times.
However, Fine Gael was conscious of the constitutional rights to privacy and natural justice, and would be applying "forensic scrutiny" when the new powers were debated at committee stage.
Labour's finance spokesman, Mr Derek McDowell, also welcomed the new Revenue powers, which he said would "help to clean up the banking sector" and encourage tax compliance.
An ICTU statement welcomed the extra powers but called for tough action against accountants lawyers and financial advisers who had facilitated tax evasion.
Up to now, the Revenue had to have clear evidence of income or corporation tax evasion and seek an order from the High Court or an Appeals Commissioner to examine bank records. Under the terms of the Bill it can now get access to bank or building society accounts where it has "reasonable grounds" to believe there is information in the institution relating to the taxpayer's liability to any type of tax.
Mr McCreevy said the Revenue Commissioners must have reasonable grounds for suspicion but these grounds are an "operational matter" for the commissioners themselves.
It can also examine accounts held by "unidentified persons or classes of persons" - to allow it to deal with cases such as unidentified offshore accounts - and all background information held by any financial institutions.
It will also now be able to demand details of all insurance cover, to ensure that taxpayers do not have any more assets than they have declared.
The Bill will begin its passage in the Dail next week and will be signed into law by April 2nd.