# Revenue 'audit' letter for bank savings



## MarySmyth

Friend's son at work today got a letter from Revenue investigating his savings- they want details of all interest paid from 2005 and details of how he accumulated money. He's early 30s I'd say and apparently has c.55k in a bank deposit account (money accumulated over a number of years- from main job (paye), odd jobs, etc- just a hard worker by the sounds of it). A lot of panic in mum's mind- i think nothing to worry about!

Any advice?


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## BazFitz

"odd jobs, etc"?

Sounds like there may be something to worry about...


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## MarySmyth

*Revenue audit*

His basic salary is c. 35k gross per annum- and he saves it all! and 'odd jobs' are not major- maybe 30 euro/ p.w. doing gardens etc- not regular and nothing guaranteed! Just that this guy saves everything- still lives at home!


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## jpd

As long as he can justify the amount of his savings, he doesn't have a problem.


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## BazFitz

MarySmyth said:


> His basic salary is c. 35k gross per annum- and he saves it all! and 'odd jobs' are not major- maybe 30 euro/ p.w. doing gardens etc- not regular and nothing guaranteed! Just that this guy saves everything- still lives at home!


 
Unfortunately there's no Section in the Taxes Acts which permits an individual with an annual salary of €35,000 to earn an extra €1,560 per annum for doing "odd jobs".

Your friend's son could be on the hook for tax, PRSI, levies, penalties and interest in relation to his undeclared income and any penalties should more than likely be at the upper end of the scale (as this sounds like 'deliberate default' and any 'qualifying disclosure' made at this stage would be a 'prompted qualifying disclosure').

Your friend's son should consider quantifying his undeclared income and explore the option of making a 'prompted qualifying disclosure'.


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## huskerdu

BazFitz said:


> Unfortunately there's no Section in the Taxes Acts which permits an individual with an annual salary of €35,000 to earn an extra €1,560 per annum for doing "odd jobs".
> 
> Your friend's son could be on the hook for tax, PRSI, levies, penalties and interest in relation to his undeclared income and any penalties should more than likely be at the upper end of the scale (as this sounds like 'deliberate default' and any 'qualifying disclosure' made at this stage would be a 'prompted qualifying disclosure').
> 
> Your friend's son should consider quantifying his undeclared income and explore the option of making a 'prompted qualifying disclosure'.



Also, the net effect of this will be that he has less than 55K in the bank. He hasn't lost his job or have huge debt that he can't pay back. 

I understand that his mother is worried,  but he is a big boy now and she needs to step back and let him sort out his own mess.


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## MarySmyth

*Not as messy as National Debt!*

Thank you for feedback- I hardly expect that 55k accumulated over 5 years equates- from predominantly his paye job amounts to some big 'fraud' with Revenue! Would appear that Revenue have little or nothing to keep themselves occupied these days... so hence chasing cents! 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!


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## mandelbrot

MarySmyth said:


> 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.



MarySmyth said:


> 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!)


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## T McGibney

mandelbrot said:


> 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.



I would suggest that this is unlikely, given the OP's opening comment



MarySmyth said:


> Friend's son at work today got a letter from  Revenue investigating his savings- they want details of all interest  paid from 2005 and details of how he accumulated money.



Many taxpayers have got such Revenue letters in recent days, all issued on 1 November. I have been told by a Revenue source that 'large numbers' of such letters have been issued to taxpayers, selected on the basis of interest earnings as per financial institutions' DIRT records.


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## mandelbrot

Oh, I see, thanks Mr McGibney! I was working on the assumption it was actually an audit notification he had received, as I hadn't heard about the issue of these enquiry letters. The case could still end up going down the road I described though, depending on what explanations he gives, given the mismatch between his visible earnings and the amount he has saved...


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## dereko1969

There is no way that this guy is going to be done for the odd jobs - I would presume that he could use the Bertie defence and say he won it on the horses. I would presume virtually all of the lodgements were from his work employment and that the odd job money he used for walking around money and wasn't lodged.


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## markpb

mandelbrot said:


> 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!)



I think you're over-reacting just a little. He's in his 30s, he's probably been working for 6 years, he's earning 35k a year and living at home so he probably has no living expenses other than socialising and holidays. At that rate, it wouldn't be hard to save several thousand a year.


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## csirl

My guess is that Revenue already know about the 'odd jobs' and, based on analysing earnings, bank account records etc. already have a fair idea of how much tax he owes on the undeclared income. The letter is Revenue giving him a chance to come clean. It can also be used to trap him. If he responds declaring he has no undeclared income, then Revenue will use this against him and rack up the fines/penalties.


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## mandelbrot

markpb said:


> I think you're over-reacting just a little. He's in his 30s, he's probably been working for 6 years, he's earning 35k a year and living at home so he probably has no living expenses other than socialising and holidays. At that rate, it wouldn't be hard to save several thousand a year.



I didn't say it would all be taxed, but my point was that it does look like an inordinate amount for someone that age to have saved. Even if as you say he has saved 7 or 8 grand a year out of legitimate taxed monies, that could still leave 15-20k to be accounted for. I doubt the situation will be that bleak for him, but I was only trying to illustrate to the OP that it might not be all as rosy as she seemed to think..!


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## DB74

€35K Gross equates to roughly €29K net of all taxes for a single guy who is not self-employed.

Over 8 years this equates to €232K net of tax

Having saved €55K this equals 23.71% of net salary

Is it possible/realistic for anyone to save almost 25% of their salary every month for 8 years.

Over 5 years it equates to 37.9% of net salary


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## MarySmyth

*Update*

Thank you all for feedback- a lot of info there. Not sure I will tell my friend- but it is certainly a useful insight. I expect at suggested that based on savings/ dirt tax that he received letter. He is not a tradesperson or anything exotic like that! But if he stated he got the monies from his family members- gifts- what would the implication be?


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## mandelbrot

MarySmyth said:


> Thank you all for feedback- a lot of info there. Not sure I will tell my friend- but it is certainly a useful insight. I expect at suggested that based on savings/ dirt tax that he received letter. He is not a tradesperson or anything exotic like that! But if he stated he got the monies from his family members- gifts- what would the implication be?



Well, for starters he'd be lying. So if he gets caught in the lie, they'll really go hard on him.

It all depends on the pattern of lodgements really; like if he's lodged relatively small amounts of cash often into his savings account, a pattern consistent with someone doing nixers, I wouldn't accept that these were gifts from family (he's not a teenager getting pocket money!). If it were to be accepted that these were gifts, they'd have to be larger sums, lodged less frequently, and ultimately the auditor could ask to see the funding source, i.e. the withdrawal of a corresponding sum from the family member's account.

Again, I'm outlining the worst case scenario. It depends on the auditor really, and how they view the 55k of savings, and whether or not there are any other markers about this guy on Revenue's records to suggest he's been messing.

The bottom line is that he shouldn't try to lie his way out of it. He could make a prompted qualifying disclosure (or depending on the wording of the letter, it may even be possible to make an unprompted qualifying disclosure i.e. the minimum level of penalties).


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## Black Sheep

I don't see anything extraordinary in the OP amount of savings. A friend of mine is in a similar income range (with no nixers) and is desperately saving to buy a property. He lives at home with mum who provides all the home comforts *free* (Her way of helping him to get on the housing ladder) and as he is studying there very little time at the moment for socializing. Living costs for him are minimal, hence the large savings


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## fmul9798

Isn't it possible that this relates to undeclared income from the interest on savings?
I realise DIRT is deducted by the savings institution, but any interest received after DIRT is deducted is also liable for income tax isn't it?


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## DB74

fmul9798 said:


> Isn't it possible that this relates to undeclared income from the interest on savings?
> I realise DIRT is deducted by the savings institution, but any interest received after DIRT is deducted is also liable for income tax isn't it?


 
The bank should be deducting DIRT from every single interest payment. This satisfies the PAYE requirements in full on the interest received irrespective of the level of other income (ie - the interest is only taxable at the low rate of tax)* but there may be some PRSI liability depending on the level of interest received.

_* - just dawned on me that this may be a way of discouraging people to save if the Government made Deposit Interest taxable at a person's marginal rate of income tax instead of the standard rate._


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## mandelbrot

Black Sheep said:


> I don't see anything extraordinary in the OP amount of savings. A friend of mine is in a similar income range (with no nixers) and is desperately saving to buy a property. He lives at home with mum who provides all the home comforts *free* (Her way of helping him to get on the housing ladder) and as he is studying there very little time at the moment for socializing. Living costs for him are minimal, hence the large savings



You mustn't understand the meaning of the word extraordinary so! 

Here's a dictionary definition:
1.	beyond what is usual, ordinary, regular, or established.

I would say it is unusual, the proof of this being that you know ONE person who is in a similar situation to this guy. I'm in the same age bracket and I don't know anyone in that situation! (And besides, 55k is nearly enough to buy a house these days, never mind say a deposit!)


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## T McGibney

mandelbrot said:


> You mustn't understand the meaning of the word extraordinary so!
> 
> Here's a dictionary definition:
> 1.    beyond what is usual, ordinary, regular, or established.
> 
> I would say it is unusual, the proof of this being that you know ONE person who is in a similar situation to this guy. I'm in the same age bracket and I don't know anyone in that situation! (And besides, 55k is nearly enough to buy a house these days, never mind say a deposit!)



I'm not so sure. I certainly wouldn't count this as extraordinary. I know plenty of people in their early-30s who managed to put down a decent deposit on the purchase of their first home during the boom period. Some of these people also had money saved for stamp duty. Even back then, 70% or 80% mortgages were quite common, even for first time buyers. 

It shouldn't be beyond anyone, who has been working for 10+ years in a reasonably-well paid job, living at home, and living fairly frugually, to save in the region of €5,000 a year.  If they saved the equivalent of the max. SSIA sum of €254 per month (as many thousands of people comfortably did) they would be more than halfway there.


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## DB74

A lot will depend on how much salary the guy is/was earning and how long he has been saving for


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## RMCF

Did someone grass on him to Revenue?


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## dereko1969

RMCF said:


> Did someone grass on him to Revenue?


 I think what you meant to say was "Did someone inform the Revenue in an act of patriotism that he was stealing from the rest of us?"


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## mandelbrot

T McGibney said:


> I'm not so sure. I certainly wouldn't count this as extraordinary. I know plenty of people in their early-30s who managed to put down a decent deposit on the purchase of their first home during the boom period. Some of these people also had money saved for stamp duty. Even back then, 70% or 80% mortgages were quite common, even for first time buyers.
> 
> It shouldn't be beyond anyone, who has been working for 10+ years in a reasonably-well paid job, living at home, and living fairly frugually, to save in the region of €5,000 a year.  If they saved the equivalent of the max. SSIA sum of €254 per month (as many thousands of people comfortably did) they would be more than halfway there.



I suppose we could argue in hypotheticals all day, since we don't really know the specifics, but I take your point about the preference of some people for a lower LTV mortgage. without wanting to split hairs, I was working on the assumption of the money being saved over 5/6 years (although from rereading the OP that's not necessarily the case!).

Now, as I said I'm hitting 30 as are most of my friends, and I don't know many people (with a proper job) whose parents would be happy to have their offspring living rent free with them at this stage of their life!

Certainly if he accumulated the money over a longer period he'll probably get off the hook, but if he's gone from pretty much 0-55k in 5 years, and assuming 5years ago he was earning less than the 35k he's on now, then he'd have to be leading a monastic lifestyle!


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## Greta

I don't see anything strange in saving 55K in 5 years, if living expenses are minimal. If this guy had the sense to use odd job money as pocket money and not to lodge it regularly into his accounts, he doesn't have anything to worry about. He should just show the Revenue the proof of his PAYE earnings for the relevant years. If these tally with the lodgements into his accounts, this is all there is to it.


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## xanadu1

mandelbrot said:


> I suppose we could argue in hypotheticals all day, since we don't really know the specifics, but I take your point about the preference of some people for a lower LTV mortgage. without wanting to split hairs, I was working on the assumption of the money being saved over 5/6 years (although from rereading the OP that's not necessarily the case!).
> 
> Now, as I said I'm hitting 30 as are most of my friends, and I don't know many people (with a proper job) whose parents would be happy to have their offspring living rent free with them at this stage of their life!
> 
> Certainly if he accumulated the money over a longer period he'll probably get off the hook, but if he's gone from pretty much 0-55k in 5 years, and assuming 5years ago he was earning less than the 35k he's on now, then he'd have to be leading a monastic lifestyle!



If he's living with parents and paying no rent (bizarre in your 30s if you have a job, but anyway), then, assuming that if he'd had a mortgage he might be paying 1k a month on it (hardly unusual for people in this earning bracket in the last few years!) that's 60k saved.

So it's certainly possible (though not, perhaps, likely) that the savings are made up largely of legitimate declared income.


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## Marietta

xanadu1 said:


> If he's living with parents and paying no rent (bizarre in your 30s if you have a job, but anyway)


 

Actually it is not that bizarre according to the [broken link removed]
AS MANY as one in three Irishmen and nearly one in six Irish women aged between 25 and 34 live at home with at least one of their parents.


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## Leaky1

But to pay no rent?? Surely that's a bit strange if you are an adult with a fulltime job.

I was asked to contribute towards the household bills when I got my first job at age 18. Not a huge amount but it was the principle of learning to pay your own way.

edited to add: btw, I'm only 30 so this isn't some "in MY day" type rant.


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## Marietta

Yes, the same here, I think little Johnny and Mary are wrapped too much in cottonwool these days.


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## Greta

My parents in law allowed all their children to live at home as long as they wanted - so long as they were unmarried And didn't look for any financial contribution. The children were generally roped in some work around the house, cutting the grass etc, but the revenue can hardly prove that, put a value on this work and charge tax 

Actually, only one of the boys lived at home all the time until he got married (others had to move for work), but he certainly saved a handsome deposit

I also know several others who live at home without contributing anything financially. Some even moved in with their parents after getting married, so as to save money for a deposit. 

I think it depends on family attitudes and financial means. Though it is not for the Revenue to pass moral judgement on people - whether they should be living at home rent-free or not, there is no law to forbid it And - as yet - no law to tax it All the Revenue can do is demand proof of source of funds and bank statements. If they can't find any evidence of undeclared income, than that's the end of it

Also, even if someone on 35K p.a. pays a little something to his parents towards his living expenses, he can still save plenty.

A lot of Irish parents actually helped their children to get on the property ladder by giving them gifts of money for a deposit and/or acting as a guarantor. Compared to that letting your child live with you for a few years rent-free to save for a deposit is relatively pain-free and is quite widespread. At least I know more people living with their parents rent-free than those who pay anything.


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## mandelbrot

Greta said:


> My parents in law allowed all their children to live at home as long as they wanted - so long as they were unmarried And didn't look for any financial contribution. The children were generally roped in some work around the house, cutting the grass etc, but the revenue can hardly prove that, put a value on this work and charge tax
> 
> Actually, only one of the boys lived at home all the time until he got married (others had to move for work), but he certainly saved a handsome deposit
> 
> I also know several others who live at home without contributing anything financially. Some even moved in with their parents after getting married, so as to save money for a deposit.
> 
> I think it depends on family attitudes and financial means. Though it is not for the Revenue to pass moral judgement on people - whether they should be living at home rent-free or not, there is no law to forbid it And - as yet - no law to tax it All the Revenue can do is demand proof of source of funds and bank statements. If they can't find any evidence of undeclared income, than that's the end of it
> 
> Also, even if someone on 35K p.a. pays a little something to his parents towards his living expenses, he can still save plenty.
> 
> A lot of Irish parents actually helped their children to get on the property ladder by giving them gifts of money for a deposit and/or acting as a guarantor. Compared to that letting your child live with you for a few years rent-free to save for a deposit is relatively pain-free and is quite widespread. At least I know more people living with their parents rent-free than those who pay anything.



Holy cow, you must've been on the wine with your dinner, you're feeling very smiley about things in that post...!

I think the discussion has been somewhat sidetracked down this discussion of whether or not this guy could have saved all of the money legitimately. Everyone has their own anecdotal stories of people who have / do enjoy the generosity and goodwill of their parents while saving  to get their own place. 

However, given the fact that the OP has told us that the guy in question has earned untaxed money, then it becomes a bit redundant to argue about whether or not he could have saved all of the money legitimately, when clearly he hasn't!

The most worrying part of your post Greta is ...


Greta said:


> All the Revenue can do is demand proof of source of funds and bank  statements. If they can't find any evidence of undeclared income, than  that's the end of it


It appears that you are quite happy that he may get off the hook. Personally I'm not happy. I pay tax on all of my income. So I'd like for everyone else to do the same, and if they did then we might all individually pay slightly less! We're all in it together, so why should any of us who pay our fair share have the attitude that its acceptable for anyone else not to?

So what I'll smile about is the thought that maybe this guy hasn't been clever, that he's kept his cash in a jar and lodged it to his savings account in blocks of a thousand here and there, and has no explanation for it, and gets to pay all of the tax he originally should have, with a suitable penalty and some interest.


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## Greta

mandelbrot said:


> It appears that you are quite happy that he may get off the hook. Personally I'm not happy. I pay tax on all of my income. So I'd like for everyone else to do the same, and if they did then we might all individually pay slightly less! We're all in it together, so why should any of us who pay our fair share have the attitude that its acceptable for anyone else not to?
> 
> So what I'll smile about is the thought that maybe this guy hasn't been clever, that he's kept his cash in a jar and lodged it to his savings account in blocks of a thousand here and there, and has no explanation for it, and gets to pay all of the tax he originally should have, with a suitable penalty and some interest.



I am not losing my sleep over whether somebody on some forum will get caught over a few untaxed quids or not. Neither would it bring huge joy in my life if they did if you feel differently, that's your business, of course

My comments here were about two things: that it is quite possible to save that much money legitimately; and that the Revenue is very unlikely to prove that the OP's friend's son didn't pay all the tax he should.

I personally pay all my taxes as I want to sleep well at night not worrying whether I get caught or not But there are much bigger offenders out there than this guy, even if he didn't pay a small amount of tax that he should have. I don't see any point getting myself excited over prospect of him getting caught, and I doubt very much that he will be, whatever your wishes or mine I seem to remember vaguely reading somewhere that the Revenue was going to investigate bank accounts with either a considerable sum of money or those that paid considerable interest, I can't remember which. I think this guy probably fell into this category. So unless he had been really stupid or panics into rushing to confess, he really has nothing to worry about. IMHO.


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## MarySmyth

*Thanks*

Thank you all for feedback- my friend and her son are law abiding citizens I think and hope, you will be all glad to hear. The son is particularly hardworking. Only reason I posted message here was that 'panic' was that they never received any letters from Revenue like this 'audit' before- som people are pros at correspondence with the Revenue. So all the input and advice appreciated.


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## Derry

Mind you don't Social welfare put a value on board & lodgings for people who live at home with their parents when they apply for benefits? So whats to stop revenue from doing the same? maybe taxing board and lodgings as a benefit in Kind?


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## BazFitz

MarySmyth said:


> Thank you all for feedback- my friend and her son are law abiding citizens I think and hope, you will be all glad to hear. The son is particularly hardworking. Only reason I posted message here was that 'panic' was that they never received any letters from Revenue like this 'audit' before- som people are pros at correspondence with the Revenue. So all the input and advice appreciated.


 
Your friend's son is not a law abiding citizen.  He is a tax evader and he is stealing from all of us.  I hope that Revenue throw the book at him.


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## T McGibney

BazFitz said:


> Your friend's son is not a law abiding citizen.  He is a tax evader and he is stealing from all of us.  I hope that Revenue throw the book at him.



This is a very sweeping statement. How can you be certain that PAYE was not applied to the 'odd jobs' highlighted earlier? 

Employers are obliged to operate PAYE on all employments, including part-time or casual employments.


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## T McGibney

Derry said:


> Mind you don't Social welfare put a value on board & lodgings for people who live at home with their parents when they apply for benefits? So whats to stop revenue from doing the same? maybe taxing board and lodgings as a benefit in Kind?



Because there is no basis for this in the tax code.


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## Marietta

BazFitz said:


> Your friend's son is not a law abiding citizen. He is a tax evader and he is stealing from all of us. I hope that Revenue throw the book at him.


 

Does it make you feel better for making such a sweeping statement when you know nothing much about the person concerned.


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## mandelbrot

BazFitz said:


> Your friend's son is not a law abiding citizen.  He is a tax evader and he is stealing from all of us.  I hope that Revenue throw the book at him.



+1

It never ceases to amaze me, the Irish attitude towards the tax system. Whether or not you personally agree with the way the taxes are levied (the same as you may not agree with the drink driving limit, or any other piece of legislation you could care to mention), you should still abide by the law. The simple fact is that every person who evades tax is affecting the overall amount of tax receipts. The consequence of which is that the tax rate paid by everyone ends up being slightly higher than it would need to be. 

Greta is the typical example of the shoulder shrugging attitude, "Ah sure, so what if he does a few nixers and pockets the cash. more power to him..." etc etc. 
The so what is that the size of the black economy in Ireland is alarming, have a look at this; http://www.independent.ie/business/irish/the-black-economy--is-back-in-business-1917172.html 
So, the €6bn that the Government is trying to find in the budget is in the Black Economy...

So Greta, if/when you're gnashing your teeth at the prospect of whatever hardship the forthcoming budget imposes on you, please remember that all of that money would already be in the coffers if no-one was willing to engage in the black market. Maybe then you won't be smiling about a "cute whore" who manages to feather his nest and dodge a few bob in tax.


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## Greta

Marietta said:


> Does it make you feel better for making such a sweeping statement when you know nothing much about the person concerned.




Some people seem to get pleasure from of insulting others, and it's ever so easy to do that over the internet...


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## Greta

mandelbrot said:


> Greta is the typical example of the shoulder shrugging attitude, "Ah sure, so what if he does a few nixers and pockets the cash. more power to him..." etc etc.
> The so what is that the size of the black economy in Ireland is alarming, have a look at this; http://www.independent.ie/business/irish/the-black-economy--is-back-in-business-1917172.html
> So, the €6bn that the Government is trying to find in the budget is in the Black Economy...
> 
> So Greta, if/when you're gnashing your teeth at the prospect of whatever hardship the forthcoming budget imposes on you, please remember that all of that money would already be in the coffers if no-one was willing to engage in the black market. Maybe then you won't be smiling about a "cute whore" who manages to feather his nest and dodge a few bob in tax.



I would appreciate it if you refrain from personal attacks on me. As far as I understand, this is a forum for financial advice, not a place to take out at other people your personal frustrations with whatever may be wrong with Ireland or the world.

The OP asked a question - did their friend's son have anything to worry about re Revenue audit letter. I merely answered their question, saying that probably he doesn't. At no time did I express an admiration for him or any tax evader. Also OP did not state that he ever evaded any tax. I think it is natural for anybody, however tax-abiding, to be worried at getting an audit letter from the Revenue.

However, if this guy did evade some tax, in the circumstances it is extremely unlikely that the Revenue will be able to prove it, and no amount of "teeth-gnashing" will change that.


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## Complainer

Greta said:


> However, if this guy did evade some tax, in the circumstances it is extremely unlikely that the Revenue will be able to prove it, and no amount of "teeth-gnashing" will change that.



As far as I know, it works the other way round. He has to be able to prove that his income is legitimate.


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## Greta

Complainer said:


> As far as I know, it works the other way round. He has to be able to prove that his income is legitimate.



I do understand that. I said in the circumstances - when almost all income is legitimate PAYE income and is easy to prove and is well above the amount of savings. And the taxpayer lives virtually for free in his parent's house, so could really save all his PAYE income, while his savings are actually less than that. Any odd-job income (even if undeclared) is, according to OP, fairly small. So, unless this guy was really stupid lodging it in his bank account, there is really no trace of it left now. If it was indeed that low, it was probably used as beer/pocket money, more money being withdrawn from PAYE income as and when needed.

Of course, if circumstances were different and undeclared income was much larger and/or was used to pay essential living expenses or for traceable things like cars etc, then the situation would be different and the Revenue could indeed pursue the taxpayer effectively, as he would be unable to prove where his savings came from.


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## T McGibney

Just to reiterate a point that I made earlier, most casual work or 'odd job' situations involve an obligation on the part of the employer to operate PAYE. The responsibility for this obligation lies with the employer, not the employee. 

If no tax has been paid on a part of this person's earnings, it is likely that others, and not the worker in question, are liable for any tax shortfall.


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## Marietta

I live in a fairly rural area and it is common knowledge that they are  loads of people working in the black market doing a day here and there while on the dole, the attitude being sure how on earth can a family manage on the dole these days, they need a day or two along with it.  It is something that is ingrained into the Irish psyche and you daren't complain or you would be breaking the social codes.


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## T McGibney

Marietta said:


> I live in a fairly rural area and it is common knowledge that they are  loads of people working in the black market doing a day here and there while on the dole, the attitude being sure how on earth can a family manage on the dole these days, they need a day or two along with it.  It is something that is ingrained into the Irish psyche and you daren't complain or you would be breaking the social codes.



Dunno about the black market bit, but it is quite legitimate and lawful for Jobseekers recipients to work on occasional days, provided that they notify Social Welfare accordingly and sign off for the days concerned. This also applies in urban areas.

ps Come to think of it, if you're notifying Social Welfare that you're working on next Tuesday and the following Thursday, its going to be pretty hard to deny this to Revenue, so any Jobseekers recipient who is tax dodging is guilty of 'Darwin Awards'-type stupidity.


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## mandelbrot

T McGibney said:


> Just to reiterate a point that I made earlier, most casual work or 'odd job' situations involve an obligation on the part of the employer to operate PAYE. The responsibility for this obligation lies with the employer, not the employee.
> 
> If no tax has been paid on a part of this person's earnings, it is likely that others, and not the worker in question, are liable for any tax shortfall.



In the case where someone has an accumulation of cash, and cannot adequately explain the source of it, I'd say Revenue would be inclined to tax them under Case I on it. He would have to prove that it was properly chargeable under Schedule E in order to avoid the tax being levied against him.
If it was my case I wouldn't be very inclined to go looking for €50/€100 of unpaid PAYE/PRSI from each of a few dozen people. (Of course if the guy was able to point the finger at a particular employer or two from whom he derived a meaningful amount of income then I definitely agree with you).


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## mandelbrot

Greta said:


> I would appreciate it if you refrain from personal attacks on me. As far as I understand, this is a forum for financial advice, not a place to take out at other people your personal frustrations with whatever may be wrong with Ireland or the world.
> 
> The OP asked a question - did their friend's son have anything to worry about re Revenue audit letter. I merely answered their question, saying that probably he doesn't. At no time did I express an admiration for him or any tax evader. Also OP did not state that he ever evaded any tax. I think it is natural for anybody, however tax-abiding, to be worried at getting an audit letter from the Revenue.
> 
> However, if this guy did evade some tax, in the circumstances it is extremely unlikely that the Revenue will be able to prove it, and no amount of "teeth-gnashing" will change that.



Sorry Greta, my moral high horse and I went a bit off-topic there, didn't mean to come across as launching a personal attack.  

But OP did state that he evaded tax, or suggested it at least. The only way you can interpret the aggregate of her posts is that the odd job money was never declared, therefore by definition he has evaded tax - if it had been declared she wouldn't be asking questions like, "what if he says the money was gifts from family" (can't find that post quickly but I'm sure she asked it!)

But as for it being "extremely unlikely" that he'll get caught out, you cannot say that without knowing more of the circumstances - it will all depend on the pattern of the buildup of money. If he's been silly then it could be extremely likely he'll have a problem. Given that he has probably always operated without regard to the taxman (given that he's a PAYE worker), then he may not have covered his tracks.


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## Greta

Mandelbrot, OP did ask "what if he says the money was gifts from family" but from their other posts it appears to me that they were just asking a "what if?" question but don't really know anything much about this guy's situation, who is not themselves and not even their friend but their friend's son So it is impossible for us here to be sure he ever evaded any tax. The only thing that we *know* from OP is that he panicked when he got an audit letter from the Revenue - but then I would too, well, if not panic but I would feel quite stressed about it as it would mean a lot of my time wasted on dealing with the Revenue, and then you never know what if the Revenue get you on something you were not even aware of... And I do actually know a good deal about taxes, so I can quite imagine the panic of those who don't on receiving an audit letter from the Revenue

I actually know people who didn't do anything wrong, paying their taxes to the penny and only claiming for what they were entitled to, but the Revenue wasted a lot of their time, demanding and querying... In the end, the Revenue didn't prove anything (as there was nothing to prove), but the time was wasted considerably. So a Revenue audit is something I personally dread, even though I do all I can to keep all my taxes up to date

I agree that if this guy was not paying taxes that he should have *and* being stupid about it (e.g. lodging it in his bank account), he may have problems. Though not very serious ones as the amounts concerned are relatively small and he has ample means to pay the tax, even with interest and penalties.

 My point was that, because the amount of his odd-job income was so small, he probably just used it as beer money, in which case his bank statements will tally with his PAYE income and the Revenue won't be able to prove anything.


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## Marietta

Dont worry Greta, the IMF will be here in a few days they will sort it all out


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## Greta

Marietta said:


> Dont worry Greta, the IMF will be here in a few days they will sort it all out




That's true


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## BazFitz

MarySmyth said:


> Thank you for feedback- I hardly expect that 55k accumulated over 5 years equates- from predominantly his paye job amounts to some big 'fraud' with Revenue! Would appear that Revenue have little or nothing to keep themselves occupied these days... so hence chasing cents! 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!


 


T McGibney said:


> This is a very sweeping statement. How can you be certain that PAYE was not applied to the 'odd jobs' highlighted earlier?
> 
> Employers are obliged to operate PAYE on all employments, including part-time or casual employments.


 


Marietta said:


> Does it make you feel better for making such a sweeping statement when you know nothing much about the person concerned.


 
If you'd both bothered to read the OP's posts in detail, you'd realise that this is a clear cut case of systematic tax evasion.  But no, it's easier to post smiley faces and miss the entire point of a thread...


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## T McGibney

Okay then, I apologise for having a different opinion to you.


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## BazFitz

T McGibney said:


> Okay then, I apologise for having a different opinion to you.


 
No need to apologise - I'm not attacking you but I am attacking your opinion. Based on the information provided to us by the OP, this guy does have a problem and to suggest otherwise is "innocent abroad" stuff.


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## Sue Ellen

This thread has run its course and time to close off now.


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