Revenue adopts protocols for enhanced power

The Revenue Commissioners have adopted guidelines covering their new powers, announced an additional complaints procedure and begun recruiting 37 extra staff to specialise in investigating tax evasion at large companies. The tax collection agency said the initiatives would reassure the general public that the necessary checks and balances were in place, and strengthen its capacity to audit financial institutions.

The chairman of the Revenue Commissioners, Mr Dermot Quigley, said the agency was recruiting five more professional accountants and two additional solicitors.

"The focus of these extra resources will generally be on increasing the level of audit activity for the financial institutions and the larger corporate taxpayers as well as specific investigations," he said. "I hasten to add that this isn't an announcement of some sort of major blitz on financial institutions; it is just a matter of putting in place the structures we need."

The volume of Revenue's work had increased dramatically in recent years, Mr Quigley added, as the number of taxpayers rose from 1.3 million in 1986 to almost two million today. Each year, Revenue officers now deal with four million telephone enquiries and more than four million pieces of correspondence.

Audits of large companies were becoming increasingly complex, he said, and the new powers given to the Revenue Commissioners under the Finance Act had opened up a whole new area for audit activity which had previously been closed off.

"Until this year, an inspector couldn't enter a bank premises to examine records, except in very limited circumstances for PAYE or VAT," Mr Quigley said. "Now we have the power to carry out full onsite audits of financial institutions' tax liabilities and we also have additional powers to do an effective audit of DIRT returns. Before the changes to the Finance Act, he added, Revenue could not do any spot-checks of non-resident accounts to determine if the owners really lived outside the State. The new staff were needed to use the new powers effectively.

"We were anxious, having been given these powers which we are intent on using to deal with evasion, that Revenue is seen to be using them in a responsible way," Mr Quigley said.

Revenue published a statement of practice, setting out the approach it intends to take in using the new powers. This includes giving advance notice to taxpayers before certain powers are invoked and a system allowing anyone to review decisions by any Revenue inspector.

Mr Quigley said Revenue was introducing a new review procedure. Previously, reviews were carried out by a Revenue inspector unconnected with the case, he said. Now these could be performed, if the taxpayer requested it, by both an internal and an external reviewer.

A panel of such external reviewers - who would be suitably qualified professionals from outside the Civil Service - would be formed by July, he added.

He said Revenue currently dealt with relatively few such cases and that of the 60,000 audits carried out since 1996, there had been only 160 reviews.