Revenue has told the construction industry it is are targeting the sector in a war against the black economy.
The Construction Industry Federation has been voicing concern for some time about the impact of black economy activity on tax-compliant building firms.
Director of policy Martin Whelan said the total value of construction in Ireland this year is around €14 billion, but the CIF believes €2 billion of that is outside the tax net.
In a memo to the CIF, a Revenue official acknowledged that during a recession, the potential for black economy activity outside the tax net increases.
For 2011, Revenue is focusing its enforcement activities on sectors which have the potential to operate using cash - and which pose the greatest risk to the Exchequer.
The tax body has included the construction sector in that category - with a compliance programmes targeting one-off housing and repair and renovation projects for private consumers.
In 2010 Revenue completed over 2,200 audits in the construction sector with a yield of €61m.
In addition, the Revenue's Joint Investigations Units with the Department of Social Protection carried out almost 6,000 'interventions' last year - recouping tax, interest and penalties of €5.5m for Revenue.
Revenue says that, in its experience, black economy activities are carried out by people and businesses that are already in the tax system - including in the professions.
It says the forms of black economy activity include understating sales or income, getting paid in cash, paying employees in cash off the books, and doing so-called 'nixers' outside their normal taxed employment or while signing on for social welfare.
The memo states that due to the collapse in the construction sector, there is a huge surplus of construction capacity competing for one-off construction jobs, resulting in intense competition for jobs.
Revenue says co-operation from businesses who are being undercut by the black economy is essential, because detailed information on what it calls 'unscrupulous traders' is required.
Revenue has invited various trade groups to discuss practical exchanges of information on the black economy at national level. It is also calling on consumers to make sure they get invoices and receipts.
The Irish Small and Medium Enterprises body recently estimated that the black economy could be worth up to €25 billion annually, and could cost the Exchequer up to €5 billion in uncollected tax each year.
