Revenue chairman Josephine Feehily says the tax authority intends to target cash businesses for investigation in relation to tax evasion this year. Speaking at the launch of Revenue's annual report for 2007, she said that the focus would be different in certain parts of the country.
Ms Feehily said Revenue in the South-East had recently bought a batch of cash registers and had them dismantled to see how they might be manipulated for tax evasion purposes. Revenue officials had now started to visit businesses to examine how their cash registers are being operated.
She said that in other parts of the country the focus will be on the motor industry, while elsewhere it will be on pubs.
Ms Feehily also said Revenue would be using a new sophisticated computer-based system to identify and pursue high-risk taxpayers. The new system, REAP, already includes information on property transactions, as well as details of substantial purchases including cars and other items. It will also include financial data accessed through the EU savings directive from next month.
Ms Feehily said the system would enable Revenue to cross-reference 700,000 taxpayers over the next year to see if their tax profile matched their lifestyles.
The new REAP system will rank taxpayers in relation to their individual risk of tax default. Revenue will then investigate the riskiest taxpayers.
Ms Feehily also said Revenue would ask the Minister for Finance to legislate for new powers to gain access to client information held by estate agents and auctioneers who have been involved in the sale of foreign property to Irish residents.
Revenue is currently investigating 2,000 overseas property deals by Irish residents and has already seen certain rental and other financial information.
Ms Feehily also confirmed that Revenue is awaiting a response for information from the German tax authorities, who have offered to share information they have purchased from a whistle-blower about Irish people who may have offshore investments in Liechtenstein. which is a tax haven.
The Revenue Chairman also addressed the issue of the tax liabilities of deceased taxpayers. Until recently, Revenue had been applying penalties to unpaid tax due from tax defaulters who died before their liability was settled.
After a legal case in the UK which found that such penalties contravened the European Convention on Human Rights, the Revenue announced it would no longer apply such penalties. But that raised the issue of whether or not the Irish tax authorities should now refund any of the tax penalties previously levied on the estates of deceased tax defaulters.
Today Ms Feehily said that, as far as Revenue was concerned, all tax settlements were completed on an 'offer and acceptance basis'. This means that they involved a deal being agreed between the Revenue and the estates of deceased taxpayers. As a result she said that the change in practice in relation to penalties would not be applied retrospectively and Revenue would not be refunding any of the penalties already paid.
But she also said that she would not be surprised if the estates of some deceased tax defaulters chose to take legal action against the Revenue on this issue.
Last year, 250,000 tax cases were checked for compliance and Revenue collected €734m from these cases. This represented an increases of 33% in compliance checks compared with 2006.
Revenue also seized 75 million illegal cigarettes as well as €500,000 in suspected criminal cash. In addition there were 14 successful convictions for serious tax evasion as well as another 10 prosecutions so far this year. Revenue said it currently had 103 prosecution cases in the pipeline.
