Revenue - 16 years and counting

W

WizardDr

Guest
The Chairman of the Revenue got all excited last week as they apparently now realise that tax evasion might have been widespread in the 1980s. Apparently this was the view of the IMF when they told McSharry that Ireland did not have an economic problem then, but a tax collection problem.

Is it the case that they will seek to investigate lots of matters many years after the event and is this damaging to 'certainty' required by business going forward?
 
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Could this be a ploy by revenue ?? They know about the issue but let it slide for some years.... Helps with the Interest and fines etc.
Will we be hearing in years to come, that revenue have "discovered " that a lot of landlords were not declaring their income during the late 90s etc. !! "
or that people were buying properties abroad with "hot cash ".
Surely revenue know about these things before they become billon euro bonazas ??
And if they don't why don't they just stop the first dog in the street..... and ask them .........
 
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is this damaging to 'certainty' required by business going forward?
I guess it would only be damaging to those businesses who have been evading their taxes, and I'm not going to lose any sleep over them.
 
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On the contrary it could be damaging to:

(1) innocent individuals or companies who buy or invest in companies with concealed "tax issues". Even the best due diligence and indemities in the world might not have much practical effect in 15 or 20 years time

(2) banks, mortgage companies or others who lend to individals with such "tax issues" who might find themselves insolvent or bankrupt because of this a decade or two hence.

(3) innocent shareholders in (1) or (2)
 
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(1) innocent individuals or companies who buy or invest in companies with concealed "tax issues". Even the best due diligence and indemities in the world might not have much practical effect in 15 or 20 years time
Caveat Emptor - If you don't want to take this risk, don't buy a company or structure the legalities of the purchase so that someone else bears the risk.
(2) banks, mortgage companies or others who lend to individals with such "tax issues" who might find themselves insolvent or bankrupt because of this a decade or two hence.
What goes around, comes around. Given the role of the banks & mortgage companies in encourage a culture of tax evasion in Ireland, I'd find it hard to lose any sleep over this.
(3) innocent shareholders in (1) or (2)
Given that the Irish banks have survived the taxation and other scandals of recent years without any material effect on their share prices, I don't think this is much of a real issue.
 
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Hi Rainyday

The problem is that justice delayed is justice denied. Many of the fiddlers of today (some of whom would be fiddling with other people's money, directly or otherwise) will either be dead, retired or otherwise beyond sanction if it takes 10 or 15 years for their sins to be exposed. It might make sense in a crude financial sense for the Revenue to wait for donkeys years to impose compliance on certain suspect elements of our economy (and then move in for a big financial kill) but I don't think it makes good civic or social sense for our society in the meantime particularly when in the short-term...

(1) our children's health and education needs are underfunded and compliant taxpayers already face a heavy tax burden.

(2) many people question their wisdom in being tax compliant when they see others appearing to get away with blatant evasion - thus adding to the evasion problem.
 
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Hi Tommy - I couldn't disagree with anything you say. I'm not saying that it is desireable to see such delays, or that it should be Revenue policy to explicitly engineer such delays.
I understand that Revenue need to prioritise their investigations and allocate scarce resources carefully.

But I do think it is important that the root cause is laid firmly at the feet of the tax evaders, not Revenue. It is like blaming the Gardai or the NRA for our road death carnage, when the real cause is the individual speeding drivers.
 
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Rainyday, would you not feel like a victim if the company you are working for right now went belly up because of old 'tax issues', and you lost your job?
 
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Doesn't sound like a very likely scenario - Has there ever been a single case of someone losing their job through 'old tax issues'?
 
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If the revenue decides to punish a company because of 'old tax issues' then there is a reasonable chance that the revenue will bankrupt that company. Especially when you consider how ruthless and uncompromising the revenue is.

Of course this will result in a loss of jobs.
 
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With the size of the Taxes Consolidation Act being bigger than the Bible, and the additional Finance Acts being written in language not clearly understood, my view is that I would be suprised if anybody could be fully tax compliant.

The sad fact about the DIRT investigations is that the Revenue told the Dail that they had no power to inspect accounts. This was true.

They had power to inspect and take away copies of non resident declarations since 1986 and they never told this to the Dail Committee. That is also true.

The fact that most Euopean countries have worse EVASION issues as regards tax on deposit interest is also true.

The Central Bank figures always included the extracts of Non Resident Balances on the Balance Sheet summaries of licensed banks. That is also true.

Credit Union dividends were included as taxable from the very start. The fact that most did not bother to pay tax them nor declare them is also true.

The point is I do not see how 16 years elapses for Revenue to take action. I have a problem when a problem that was originally created by Revenue and recognised as an issue by them in 1986 - why then did they change the legislation - is left there until it is revived like a rotting corpse. They then selectively extract only arm of the 'tax evading' practice namely the non resident bit.

For example if you totted up the annual interest paid by all the Banks every year before 1986 for residents in this country you would NEVER EVER get near the actual figure declared as interest by those that always declared it. This 'bit' has been missed by Revenue, Bird et al and is much larger than that above.

But thes the matter about Credit Union dividends - always taxable at the top rate before Charlies deal - was just ignored. Guess what thats also tax evasion.

Similarly 'civil service' allowances where not a single shred of evidence needs to be produced that you spent anything is surely the best example of 'tax evasion is what ever we (the civil service) say it is'. And leaving out car park spaces as part of the benefit in kind regime must surely rank as the best 'cannot be judge in your own case' example!
 
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Hi AP - I guess I'll take that as a 'No' answer to my question "Has there ever been a single case of someone losing their job through 'old tax issues'? ".
 
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This is nonsense. Practically every company or business that goes bellyup does so with significant sums owing to the Revenue. Sometimes these liabilities arise as a result of tax defaults detected in the course of Revenue audits. Every town in Ireland has numerous stories of local businesses closing after trouble arising from tax defaults or settlements. Innocent people invariably lose their jobs as a result.
 
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Hi Tommy - AP's question was in the context specifically of old tax issues after a sale or takeover. I'd be interested to hear any specific examples of where any employee has lost their job in such circumstances.
 
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I'm sure AP can speak for himself but I don't see any reference to a post-sale or takeover situation in either of his posts on this topic.
 
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Hi Tommy - That was clearly the context of the thread, as set by your original outline of the three scenarios. But for the sake of debate, let's ignore the sale/takeover issue. Are you (or other posters) aware of any example where an employee has lost their job through old tax issues where discovery of the tax issue was delayed by Revenue inaction? Note that the general situation of Revenue debts after company collapse does not imply that the Revenue debt was the cause of the collapse, or that the there were old tax issues involved.
 
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No matter what example is cited, how can it be proved conclusively that it was exclusively the old tax issue that caused the company's collapse? - I'm sure you'll find some way of arguing the point. It's a case of 'does smoking cause cancer? - well we're 95% sure.'

Does it make you feel happy to think that somehow companies never go bust through tax issues brought about by revenue's prior inaction? Do you think that is scenario is unlikely to ever happen?

The quagmire that is the Irish tax system will have its victims, and the gestapo will be ruthless.
 
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I think your ire at Revenue is misdirected. They don't cause the problem. The tax evaders cause the problem. Blaming Revenue in such circumstances is like the scene from Life of Brian where the guy from the Judean Popular Front complains about the Romans not giving them time to hide before they entered the room, as if there is some 'rules of the game' about how the authorities have to handle such scenarios.

If you evade tax, it is your problem. If you work for a company that has a culture of tax evasion, you may get hurt.
 
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XXXAnother PersonXXX says

"If the revenue decides to punish a company because of 'old tax issues' then there is a reasonable chance that the revenue will bankrupt that company. Especially when you consider how ruthless and uncompromising the revenue is."


Wherever did you get that impression of our lovely Revenue Service.

Just ask Charlie Haughey, Liam Lawlor, Ray Burke, et all, and they will tell you that they are grand friendly chaps. Im sure the conversation goes something like this, "OK We know you owe a few millions in back taxes and penalties, but just lash out a few hundred there and lets just call it quits, after all arent you after giving us a few little perks like free parking along the way". Poor old George Redmond just didnt play ball which is why he ended up in prison.
:)
 
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If you evade tax, it is your problem. If you work for a company that has a culture of tax evasion, you may get hurt.
And how is a person ment to know this???
rainyday to be honest at times your naivety at times supprises me. There is a big bad world out there with small businesses trying hard to keep going.That suffer badly from late payment by debtors which sents them into arrears with the revenue, the revenue then charge them exorbitant rates of interest on these late payments even though the owners are bairlygeting there. Some of the biggest culprits for late payments are the county councils where people do work for them. You ask has people gone out of business/lost their jobs because of the Revenue - most definatly, and ofton not because of the liabilities themselves rather the interest charged causing the problem.
 
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