Tax consultant who avoided liability jailed for 15 months
A DUBLIN tax consultant who falsely represented himself as an employee at various firms so he could gain tax credits to offset liability on his personal income has been jailed for 15 months.
Colm Watters (48) submitted revenue forms on behalf of three companies, included himself as an employee less almost 100 per cent tax on the gross income figure, and used tax credits from these false submissions to cut €65,000 from his income tax liability.
John Flynn, assistant principal inspector of taxes at Revenue’s investigations and prosecutions division, revealed the interest, surcharges and penalties accumulated puts Watters’s current liability at around €208,000.
Watters, of Greygates, Mount Merrion, pleaded guilty at Dublin Circuit Criminal Court to four counts of submitting incorrect P35 forms on behalf of three companies and two counts of submitting incorrect income tax returns for 2002 and 2003. He has no previous convictions.
Mr Flynn told Kerida Naidoo, prosecuting, that Revenue did an audit on Isotope Recruitment Ltd, Yellow River Art Gallery and Apollo Art Gallery and discovered an employee listed on each company’s P35 form for 2002 and 2003 had his income completely deducted in tax in nearly all cases.
Mr Flynn explained that Watters had been a tax consultant for the companies and had the responsibility of submitting their P35s for the two years.
Watters falsely stated he got €21,000 gross pay from Yellow River Art Gallery in 2002, less €20,004 PAYE and €996 PRSI.
Watters submitted a P35 for Isotope Recruitment Ltd for the same year stating he received €15,000 gross income, less €14,664 PAYE and €335 PRSI. Watters used the tax credits gained from these false submissions to offset liability on the €60,000 he earned at his own accountancy firm, Becker Cresswell Watters Limited.
Mr Flynn told Mr Naidoo that Watters stated he got €36,000 from Apollo Art Gallery, less €30,234 PAYE and €1,896 PRSI, and €45,000 from Isotope Recruitment Ltd, less €42,750 PAYE and €2,250 PRSI in P35s for 2003, and used tax credits from these submissions to offset tax liability on his €150,000 income for that year.
Mr Flynn agreed with Paul McDermott, defending, that Watters cannot pay the amount he owes but said this was because he did not dispose of assets at the time. Mr Flynn added Watters’s home was worth around €3 million in 2007. In 2006 he bought property in southern France.
Watters’s doctor told Mr McDermott his client suffers severe daily panic attacks as a result of the court case.
Dr Aine Tubridy said Watters had suffered such attacks for years, but they got worse since 2009 as the criminal proceedings collapsed his marriage.
Frank Murphy, a solicitor and friend of Watters, told Mr McDermott the father of three had always been “very straight” in business dealings with other clients.
Ciaran Ryan, a chartered accountant and former inspector of taxes, told Mr McDermott Watters has an estimated €650,000 personal debt from negative equity on property, loans, fees, further taxes and general bills.
Judge McCartan noted Watters had gained €65,000 due to not paying tax in 2002 and 2003 but that the Revenue had added to this through penalties and interest.
He said it was “remarkable” Watters had not dealt with the issue when he had the capacity to do so and when the case was at District Court level last year.