Pressure grows on Irish Life to assist Revenue tax trawl

Revenue is adamant that Irish Life & Permanent's refusal to help its investigation will not impede progress, writes Siobhan Creaton, Finance Correspondent

Irish Life & Permanent is continuing to resist pressure to co-operate fully with the Revenue Commissioners to help it to track down the tax evaders it sold policies to over the past 25 years.

Yesterday, the State's biggest life assurer was standing by its decision not to write to its 250,000 customers to advise those with tax liabilities to voluntarily settle their affairs.

It has turned a deaf ear to the Minister for Finance's call to reconsider its position.

Labour Party finance spokeswoman, Joan Burton has reminded the group that many of the lump sum investments now under the Revenue's spotlight were opened while Irish Life was still owned by the State.

The Revenue has previously uncovered the facilitation of tax evasion at another former State-owned financial institution, ACC Bank.

Ms Burton said the Government should make it clear that it expects Irish Life & Permanent to provide all required co-operation to the Revenue. She further called on the Irish Financial Services Regulatory Authority to examine whether it has a role to play in this scenario.

The Revenue insists that Irish Life & Permanent's stance will not impede its progress, but it is disappointed that the company that sold most of the policies during the timeframe of this inquiry is being unhelpful.

There has been speculation that the Revenue could ultimately net up to €1 billion from tax evaders who put lump sums into single premium accounts and other policies. Given that Irish Life sold one in two of these type of policies during that period it is likely that some of its customers will feature among the tax defaulters.

Irish Life & Permanent insists that it has done nothing wrong in terms of the policies sold at the time and that this investigation is purely about the source of the money its customers invested in them.

It is now well-known that tax evasion was a widescale activity in the 1980s and 1990s. The Revenue's investigations into bogus non-resident accounts, the Ansbacher deposits and other schemes, has already yielded just over €1 billion in unpaid taxes, interest and penalties.

These inquiries have yielded vast amounts of information and presumably provided pointers as to where other funds were concealed.

For this investigation, Revenue officials will have to try to establish the identities of individuals who put undeclared income into the various funds sold by life assurers.

In some cases single premium accounts were linked to separate life assurance policies. The life assurance company would have paid any taxes due on the profits achieved by these funds, but the identity of the policyholders remained confidential.

Some in the industry say that in the late 1980s and early 1990s vast amounts of cash were being lodged into these type of policies with the guarantee of confidentiality from the tax authorities proving appealing to some customers. It is those people who now have most to fear from the Revenue.