By all accounts there was great craic agus ceol at the Willie Clancy Scoil Samhraidh in Miltown Malbay earlier this month. There was a choice of 10 Irish dance workshops, ceili every night and lots and lots of the black stuff.
There is no surprise in the news that Miltown Malbay were the all-Ireland set-dancing champions this year, and the word is that they are pretty good at the tug-of-war as well. They make some of the best bodhrans anywhere in that part of the world. They are fine fiddle-makers and fiddle-players, and some of the country's best hurlers come from around there.
And it is not just the craic agus ceol, the set dancing, the tug-of-war, fiddle-making and fiddle-playing and hurling that Miltown Malbay is justly proud of. For there was hardly a parish to beat them throughout the whole of Ireland about 10 years ago in the champions league of non-resident account-holders. That was the time when that sport was popular and profitable.
An investigation by the Revenue Commissioners in 1991 resulted in the observation, recorded in January 1992, that "Revenue were alarmed at the findings as it was now clear that the [Bank of Ireland branch in Miltown Malbay] had colluded with the taxpayers in tax evasion on a large scale."
The arrears of DIRT tax were modestly estimated at about £200,000, but this masked a far larger problem, which was that most of the money in these bogus non-resident deposit accounts had itself been the product of tax fraud, i.e. evasion of income tax. As the report of the Comptroller and Auditor General on the DIRT issue revealed last week: "In the majority of cases the non-resident bank accounts were utilised to shield undisclosed income from Revenue."
Altogether over £1 million was found to have been underpaid in taxes in Miltown Malbay in 1991 - this related to a period of about five years - and a further £700,000 was collected in interest and penalties. The total yield from this Revenue swoop was an impressive £2 million.
I don't understand why the Revenue Commissioners did not engage in similar swoops throughout the State, when they knew full well that the scale of tax evasion, involving the DIRT tax evasion and the income-tax evasion behind the DIRT tax evasion, was around £1 billion.
The Comptroller and Auditor General notes that when the Revenue had this spectacular success in the set-dancing capital of Ireland "they did not use their bargaining power with the [Bank of Ireland] to seek details of the nature, extent and results of the internal [bank] audit checks being carried out on non-resident accounts across the [bank's] branch network".
He goes on: "Neither did they seek certification from the bank that all non-resident accounts were genuine and properly documented. That type of certification was at least sought from AIB [when it was caught in even worse shenanigans] in 1991 even though the matter wasn't pursued."
The excuse that the Department of Finance, the Central Bank and the Revenue Commissioners have given for their failure to do anything about the bogus-non-resident accounts is that if they ruffled the feathers of these tax-dodgers, they would all flee the nest and cause havoc to the exchange rate. On balance, it was felt it was better to leave them alone - in the national interest, that is.
The problem was identified as far back as 1979, the year of the huge PAYE tax marches. They paraded the streets demanding equity in taxation, while the Government claimed that there already was equity, although it knew full well that this was simply not true. In March 1979 a bank manager informed the minister for finance, Mr George Colley, that the banks were hotbeds of "hot" money.
In March 1984 the Revenue told the Department of Finance that the improper use of non-resident accounts had "long since reached epidemic proportions". Although the Department of Finance knew full well the extent of the fraud and the Oireachtas had given the Revenue new powers to deal with it, the Department of Finance got the Revenue to agree in 1987 not to exercise a crucial element of these new powers without prior consultation with the department. Inspections of non-resident accounts by the Revenue Commissioners began only in 1998 when the media had forced public attention on the issue.
AN internal Department of Finance file shows that in 1993, just before the tax amnesty, it was reckoned that the amount of money in non-resident accounts was about £4 billion and that it was likely that "a very high proportion of these accounts have been fraudulently designated and that the depositors are resident".
In a departmental file also in 1993 it was stated that the volume of funds in the financial system that represented tax evasion could be about £3 billion. So everyone knew the scale of the fraud for the last 20 years and everyone in the Department of Finance, the Central Bank and the Revenue Commissioners were determined to do nothing about it.
Throughout most of these years the minister for finance on budget day would threaten that anyone caught evading tax would be visited with the direst consequences, knowing of and having colluded in a decision to exclude the most grievous tax-evaders from any consequence at all. The reason advanced for this collusion is not even vaguely convincing.
If it was the case that any inquiry into the non-resident account fraud would bring calamity down upon the country, what about the fiddlers of Miltown Malbay? How was it that they could be investigated, intimidated into full disclosure and required to pay the full tax evaded and accompanying interest and penalties, without the economy of west Clare falling over the Cliffs of Moher?
But more particularly, how was it that the Revenue authorities felt it was OK to sort out the home of craic agus ceol, while leaving largely untouched the rest of the country? If it was indeed a genuine concern that any inquiry into the non-resident accounts would result in a flight of funds out of the State, how could the investigations into what went on in Miltown Malbay have taken place and the other sparse investigations in Templemore, Skerries, Kilrush, Stillorgan, Castlebar, Roscrea, Artane and O'Connell Street, Dublin?
The excuse is as bogus as the accounts, and it is time we had some answers from those ultimately responsible: John Bruton, Ray MacSharry, Alan Dukes, Albert Reynolds, Bertie Ahern and Ruairi Quinn. The reality is that for the richest section of society from the late 1970s on there was an effective tax amnesty, while the rest of society was required to pay through the nose.