I hardly expect that 55k accumulated over 5 years equates- from predominantly his paye job amounts to some big 'fraud' with Revenue!... Regardless of the outcome for this young man, I would envisage that max payable with levies/ penalties if anything will amount to less that 1 or 2k for the 5 years!
What you don't appear to appreciate is that the onus will be on this guy to prove the source of the funds saved. Statements for the savings account will be sought, showing the source of the lodgements. If the monies were transferred in from his current account, then statements for this account will be sought. If he is a PAYE worker then his current account should only have a regular pattern of lodgements (i.e. his wages). Any other lodgements will be queried. If any of the amounts lodged to savings do not come directly from his current account, then he would have a bit of explaining to do as to where the money came from (seeing as his only declared source of money is the wages lodged to his current account...)
So, if as you say he has €1,560 of untaxed income in each of the five years 2005-2009, and even if it is only taxable at the standard rate of tax his liability could look roughly as follows:
Tax Interest Penalty Total
2005: 312 140 234 696
2006: 312 105 234 661
2007: 312 70 234 616
2008: 312 35 234 581
2009: 312 - 234 546
-----
3,100
Now, that is if, as you say, his odd job income is €30 a week, but at the kind of rates people were charging to do pretty much anything up to 2008, that's like saying he did about 1hour of odd-job work a week, I'd be pretty surprised if that is actually the case. So I'd say he'll be doing well to escape out of this with a tax bill that low.
Would appear that Revenue have little or nothing to keep themselves occupied these days... so hence chasing cents!
I would say if Revenue are looking at a PAYE worker like this guy, it is primarily because of some kind of intelligence received in relation to him. The REAP system, Revenue's software program for analysing the perceived risk of taxpayers, is not yet gone live for PAYE-only taxpayers, so it couldn't just be a random thing. Therefore there would be no reason for this guy to receive any attention unless someone has tipped them off that he is doing unregistered cash work. It's Revenue Policy to at least examine any such allegation (same as if you report an offence to Gardai, they're obliged to at least consider whether or not there appears to be any merit to what you've alleged).
I'll ask you this, if you were a tax inspector, and an anonymous letter lands on your desk, suggesting that Joe Bloggs has been carrying out cash jobs for people for several years without registering for tax, what do you do? Well at the touch of a button you can see how much the guy has earned for the last 5+ years. You can also see the records from the financial institutions of how much interest he has earned, from which it can easily be inferred roughly how much cash he has on deposit. So, having quickly ascertained that this guy, who has been reported as being engaged in black market work, appears to have an inordinately high amount of money tucked away, what is the only reasonable step that you can take next?
So far the tax inspector has a couple of hours max worked on the case, work he had to do anyway, since the tip-off letter has to be given due consideration.
For the remainder of the audit, maybe a total of a couple of days to run through and cross-check the lodgements to the couple of bank accounts, issue further correspondence, and maybe interview the taxpayer. So say three days work in total, start to finish, and while approaching the case with an open mind, he's pretty sure at the outset that he's likely to be getting an audit yield. I think that's pretty good value for Government money.
As for Revenue having little to do, if they were doing so little then this guy wouldn't be getting a letter, would he? As for chasing cents, I'd hardly call 55k of possibly untaxed money sitting in a bank account "cents", would you? (If that was all untaxed income then it would mean a tax/interest/penalty bill of maybe 80-100k!)