The Public Accounts Committee has been unable to find out who took the initiative on issuing an internal Revenue circular instructing personnel not to inspect non-resident accounts, the committee chairman said yesterday.
Mr Jim Mitchell, speaking during a break in proceedings, said the committee had been unable to trace any written evidence behind the issuing of SIM (superintending inspector's memo) 263, which circulated within Revenue in June 1986, following DIRT's introduction.
This occurred despite the granting of the power to Revenue, in the 1986 Finance Act, to inspect bank declarations of non-residency. The memo, which followed the Act's implementation, stated there should be no inspection of non-resident account declarations until further instructions were issued.
Mr Seamus O'Connell, a former chief inspector of taxes, said all SIMs then were issued "over his name" and he had no doubt he had seen SIM 263 but he did not remember it. He believed it had been written by the late Mr Tony Brown, a principal inspector of technical services, who would have been in contact with the office of the secretary of taxes. He did not know who the authority with the office of the secretary would have been. "It may have been a commissioner, I don't know."
He believed it would have been a reasonable circular at the time because the scale of bogus non-resident accounts was unknown. "Also, I think it would have been reasonable to wait at least until the first returns were made."
It was normal for SIMs to be issued after finance Acts were introduced and they would not get the approval of the Revenue board. He did not know for how long the deferment of the Revenue's power, as outlined in the circular, was expected to last and he did not recall reviewing it in the three years before he retired in 1989.
Mr Philip Curran, a former commissioner and chairman of the Revenue Commissioners, said he had not reviewed SIM 263 during his term because he was not a commissioner for that area, but it may have been reviewed by another commissioner. Mr Seamus Pairceir or Mr Liam Reason would have dealt with the circular to the extent it came before the commissioners.
He said the three commissioners met infrequently, "every month or two, perhaps", and minutes were not kept. It was the system he inherited. There would not necessarily have been a meeting of all three individuals. "It was quite informal. There was no question of a fixed agenda or a written agenda."
With hindsight, he still would not have seen anything sinister in the circular's paragraph saying that declarations should not be inspected for the moment. "It was a brand new tax; systems had to be thought out. Even if I had seen that early in 1987, it would not have struck me as something requiring very close attention."