# Bogus non resident account investigations



## <A HREF=http://pub145.ezboard.com/baskaboutmoney.s (26 Feb 2004)

I'm confused! I thought that, apart from having to settle any outstanding taxes, interest and penalties, there were minimum/mandatory financial and/or custodial penalties for people who had outstanding tax liabilities which were dated back before but were not settled under either of the tax amnesties in previous years? If this is the case then why are the Revenue showing some leniency in the context of the latest BNR investigation and deadline and not simple throwing the book at BNR cheats?

[broken link removed]


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## Protocol (26 Feb 2004)

*Offshore accounts*

I didn't look at the link, but there is a difference between the Bogus Non-Resident Accounts and Offshore Accounts.

The BNR accs were Irish people opening accounts in Irish bank branches, pretending they lived in UK, though they actually lived down the road.

Offshore is Irish people opening accounts in offshore locations, e.g. Isle of Man, Jersey, etc.


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## <A HREF=http://pub145.ezboard.com/baskaboutmoney.s (26 Feb 2004)

*Re: Offshore accounts*

OK - maybe I don't have the terminology straight but the general gist of my query still applies...


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## Protocol (26 Feb 2004)

*tax evasion*

Also, I am convinced that anybody opening an offshore account was evading tax.

Sure the country is full of banks, why would you go all the way to the Isle of Man, or the Channel Islands??  Only if you wanted to evade tax.

Now I know that people will respond with so-called legitimate reasons for having offshore accounts, but don't be so naive.

We all know, deep down, that may Irish people are "cute hoors", they want to "avoid the taxman", and so on. You have to admit it, many of us are petty peasants at heart.

Result: huge tax evasion, offshore accounts, BNR accounts, thousands upon thousands of them.

Also, a pont not mentioned is that this is very likely still ongoing. Yet the media/opinion talk as if it is in the past.


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## daltonr (26 Feb 2004)

*Re: tax evasion*

Out of curiosity I sent an email to a fairly well known Bank with a presence in Ireland, enquiring about their offshore services.  I got a very nice booklet with loads of information back.  I guess there's good money in it for the banks if they are promoting it as a service.

No I didn't open an account    
And No, I don't still have the booklet if any of you are interested in opening an account.

-Rd


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## Tommy (26 Feb 2004)

*Re: tax evasion*



> Also, I am convinced that anybody opening an offshore account was evading tax



Tens of thousands of Irish people have worked and lived abroad at some stage of their careers, including (presumably) many AAM readers. Some of these people still have money on bank deposit in the country where they lived. In most cases the money in these accounts will be fully tax-paid and legit. As with everything else, there will obviously be others who used offshore accounts to evade tax. 

All of these accounts (legit or otherwise) are now under scrutiny.

However "convinced" you may be at this stage of the guilt of everyone involved, if you even start to think at all about the issues involved, you will realise that everything is not as black and white as they seem.

ps it is not illegal for banks to offer offshore account services to those who wish to use them. Unless the taxpayer is using them to evade tax, there is no illegality in opening one either. In many cases (expats etc) there are sound financial and business reasons for having an offshore account.


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## rainyday (26 Feb 2004)

*Re: tax evasion*

Many employees of multi-national companies also have off-shore accounts as a result of getting or buying shares in their employer or share options. There is nothing inherently wrong with having an off-shore account.


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## <A HREF=http://pub145.ezboard.com/baskaboutmoney.s (26 Feb 2004)

*Re: tax evasion*

... can anybody address my original fundamental point? If, as I believed, the last amnesty was a "last chance" for tax evaders to come clean then why does the Revenue seem to be exhibiting a certain amount of leniency towards tax evaders in this case? Is it simply for expediency - e.g. if they don't then people won't come clean and it will remain difficult to find them out? Maybe I have the wrong end of the stick here but all these "last chance" amnesties and/or leniencies seem to make a mockery of our tax laws...

Please note that I may have been mistakenly confusing BNR accounts and overseas accounts in my original post but I'm sure that people can get my gist. I also realise that not all non resident or overseas account holders are necessarily tax evaders.


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## Tommy (26 Feb 2004)

*Re: tax evasion*

The reason the Revenue are showing some leniency to offshore account tax evaders is to give them an incentive to turn themselves in. The Revenue do not have the resources to do a major trawl of each and every offshore account held by an Irish person in every country of the world. Even if they had, that trawl would take decades to complete and much time and effort would be wasted on investigating innocent cases.

It is much more effective for the Revenue to incentivise guilty (and innocent) parties to come forward at this stage and then for them to audit those who don't comply with the incentive offer


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## Tommy (26 Feb 2004)

*Re: tax evasion*



> all these "last chance" amnesties and/or leniencies seem to make a mockery of our tax laws...



First of all, there is no amnesty involved in either the BNR or offshore projects. All taxes and statutory interest must be paid in full. The element of leniency relates to the level of penalties which are to be charged on top of taxes and interest. Penalties in every case are levied at the discretion of the Revenue. In the current initiatives, Revenue offer those involved the option of settling their affairs by a set deadline under a specific penalty regime or alternatively waiting until later when more harsh penalty regime will be imposed.


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## <A HREF=http://pub145.ezboard.com/baskaboutmoney.s (26 Feb 2004)

*Re: tax evasion*



> First of all, there is no amnesty involved in either the BNR or offshore projects.



I know - I was referring to the two previous "last chance" amnesties no the current scheme.

I take your point about "settle now before harsher rules come in" and understand that it's expedient for the Revenue to give some sort of carrot/stick for people to come clean but I still think that these amnesties/leniencies make a mockery of our tax laws and further undermine people's confidence in the system... :\


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## Tommy (26 Feb 2004)

*Re: tax evasion*

Do you mean the 1994 and 1988 amnesties? In fairness its a bit late to be complaining about those schemes at this stage.


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## <A HREF=http://pub145.ezboard.com/baskaboutmoney.s (26 Feb 2004)

*Re: tax evasion*

... I can't really make my point any clearer I'm afraid. I'm not complaining about the earlier amnesties. I AM complaining that in spite of these being "last chances" for tax evaders the Revenue are showing a certain amount of leniency (e.g. non publication of the names of evaders who come forward before the overseas account settlement deadline) and not simply throwing the book at evaders in this case.


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## Tommy (26 Feb 2004)

*Re: tax evasion*

It's easy to complain about Revenue "leniencies" but somebody sometime has to take a pragmatic approach. Is it better for society that the offshore and BNR scandals are allowed to continue uninvestigated at infinitum for lack of Revenue resources or for the Revenue to take the bull by the horns and devise a system to sort the problem out for once and for all? 

After all, the old Irish solution of sweeping a problem under the carpet never meant that the problem went away...


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## <A HREF=http://pub145.ezboard.com/baskaboutmoney.s (26 Feb 2004)

*Re: tax evasion*

So the other Irish solution of bending the rules for the purposes of short term expediency kicks in. I see... :\


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## Tommy (26 Feb 2004)

*Re: tax evasion*

Can you propose an (implementable) alternative?

ps what rules are being bent?


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## <A HREF=http://pub145.ezboard.com/baskaboutmoney.s (26 Feb 2004)

*Re: tax evasion*



> Can you propose an (implementable) alternative?



I am not a tax expert so, no, I can't. But I would have expected that the tax laws as they stand to be implemented to the letter particularly since this was the explicit or implicit import of previous amnesties...



> ps what rules are being bent?



[broken link removed]

"The Revenue Commissioners are commencing a comprehensive investigation of offshore accounts and investments outside the State and have set a deadline of 29 March 2004 for people to make a Voluntary Disclosure and obtain the benefits of mitigated penalties, non publication on the tax defaulters list and non prosecution."


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## Tommy (26 Feb 2004)

*Re: tax evasion*

This is not a bending of the rules. The Revenue Code of Practice for Revenue Audits sets out a precise scale of penalties to be implemented in arrears and settlement cases. In each case the level of penalty and the questions of disclosure and referral for prosecution depends on a number of factors (read up on them on the web if you wish) Chief among these factors is the level of co-operation on the part of the taxpayer and specifically whether the taxpayer voluntarily discloses their case to the Revenue in the advance of any specific investigation.

Incidentally a parallel system works in the criminal law area where issues such as co-operation with due process by a convicted party (eg by volunteering themselves to Gardai or by entering a guilty plea in court) can be considered as a potential mitigating factor when the issue of sentencing is addressed. 

In the current Revenue initiatives, Revenue are warning people that if they have a tax problem relating to BNR or offshore accounts, they will lose these "voluntary disclosure" privileges if they don't come forward by the publicised deadline.

In relation to your earlier point, it seems to me that you are putting the Revenue in a "damned if they do damned if they don't" position. 

It is all very easy (and sadly common in Ireland nowadays) for people who haven't bothered to familiarise themselves with the minutiae of particular legal and regulatory issues to complain about the perceived inadequacies of others (state agencies, professionals, regulators) who are forced to work within the confines of these constraints and who would be legally or professionally accountable for breaches of same. It is particularly easy to do so when one fails to come up with practical suggestions of their own as to how a particular problem or scenario should be solved, on the basis of "I'm not a tax/legal/medical expert". What a great world it would be if we could all afford to be "hurlers on the ditch"


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## <A HREF=http://pub145.ezboard.com/baskaboutmoney.s (26 Feb 2004)

*Re: tax evasion*



> In relation to your earlier point, it seems to me that you are putting the Revenue in a "damned if they do damned if they don't" position



How so?



> It is all very easy (and sadly common in Ireland nowadays) for people who haven't bothered to familiarise themselves with the minutiae...



So only tax experts should be allowed comment on Revenue practices... :\


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## Tommy (26 Feb 2004)

*Re: tax evasion*

Not necessarily. I would turn it the other way and say that if someone is going to criticise the Revenue/ Gardai/ doctors/ accountants/ solicitors/ judges/ insurance industry/ retailers/ government/ whoever on a particular issue, they should inform themselves properly on the issue before commenting. By doing so they may well come to understand the issues involved and realise that their original opinion was unjustified.


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## Tommy (26 Feb 2004)

*Re: tax evasion*



> "damned if they do damned if they don't"



We are going over old ground here but you criticise the current Revenue initiatives and instead demand a full Revenue investigation of all BNR and offshore cases.

As I pointed out earlier, the Revenue do not have the resources to do such an investigation. You have not contested this. 

If the Revenue did undertake such a mammoth investigation, it would take donkeys years to extract a cent from some major tax evaders. In that scenario, I am sure we all would criticise them for failure to properly plan their investigation.


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## Protocol (26 Feb 2004)

*offshore accounts*



> Tens of thousands of Irish people have worked and lived abroad at some stage of their careers, including (presumably) many AAM readers. Some of these people still have money on bank deposit in the country where they lived. In most cases the money in these accounts will be fully tax-paid and legit. As with everything else, there will obviously be others who used offshore accounts to evade tax.




I fully understand why Irish people who worked in UK or elsewhere would have an account in UK or elsewhere.  Fair enough.

But why would an *Irish person based in Ireland* have an account in the *Isle of Man* or on the *Channel Islands*?  That is what I am getting at. For example, the former Dublin city senior official caught with several hundred grand in a suitcase coming back from the Isle of Man.

Answer = tax evasion.


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## <A HREF=http://pub145.ezboard.com/baskaboutmoney.s (26 Feb 2004)

*Re: tax evasion*



> But why would an Irish person based in Ireland have an account in the Isle of Man or on the Channel Islands?



To avail of higher rates of interest (albeit at the risk of currency fluctuations) or services that are not available here in Ireland perhaps? As long as the funds and accounts are not being hidden from the taxman then I don't think that there's necessarily anything dodgy about this. According to the Revenue:

[broken link removed]



> Q: Is it illegal to have an offshore account?
> 
> A: No, it is not illegal to have an offshore account but you must pay tax on any interest, income or gains earned on the account. Also, money placed in offshore accounts must be declared for tax.



Of course, I don't understand the minutiae so don't take my word for it.... :|


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