1993 tax amnesty liars to get second chance from Revenue to come clean

At what point does enough finally become enough? When does the charade of last chances followed by one more last chance become so ridiculous that either we give up the pretence or actually get serious? How far can the law be bent and twisted before it becomes utterly unrecognisable? These questions are prompted by the confirmation this week that people who lied to the Revenue Commissioners at the time of the tax amnesty in 1993 will not be punished if they now come forward and declare their bogus non-resident accounts.

A month ago, the Revenue Commissioners issued what is known in the trade as a "statement of practice" on how they intended to deal with the large sums of tax unpaid on the money held in bogus non-resident accounts. It was pretty clear from the statement that this new dispensation (in all but name an amnesty) would apply to people who, in 1993, had sworn blind they were disclosing all of their assets to the Revenue and who were therefore allowed to pay a measly 15 per cent of what they owed.

Few people picked up on this at the time, though it was pointed out here. Nor did many notice when, in the Dail last week, Charlie McCreevy explicitly confirmed that this was indeed the case. It may be that what is happening is so incredible that it didn't quite register. Only this week, with Magill magazine highlighting the story and the Revenue Commissioners confirming that it was true, did it really surface into public consciousness. Things are so bad, it seems, that the State letting off the hook people whom it threatened with mandatory imprisonment is not really news.

To add a comic twist, the Taoiseach told the Dail on Wednesday that the cheats who even cheated on the amnesty will suffer after all. Instead of getting off with 85 per cent of the tax they owed, they will now have to pay it all, though without penalties of course. "Those who did not properly avail of the 1993 Act," he said, "will pay higher amounts now if they come within the statement of practice. The 1993 Act, for which I was responsible, stated that someone could comply then but would have no other opportunity." This is the tax dodger's version of zero tolerance: if we reward your crime the first time, we'll reward it a bit less generously the second time.

What this means is that barely a semblance of legality now clings to the 1993 amnesty. Speaking of the 1993 amnesty legislation in the Dail this week, the Taoiseach claimed that "I stand over the terms of an Act which I brought through the Houses."

That Act, however, says from the moment it comes into effect anyone who "knowingly makes any false statement or false representation" on a tax return will be liable to a jail sentence of between one and eight years. If the amount of tax evaded is more than £100,000, the jail term is mandatory. Yet this Act is now being set aside by the Revenue.

Democracy, clearly, doesn't come into the equation. Nor does constitutionality. For there is good reason to believe the 1993 act is unconstitutional, and was known to be so by the government at the time. One of the most interesting documents to have emerged from the Public Accounts Committee's DIRT inquiry is the Department of Finance's memorandum for Government on the amnesty. In the copy published, a section headed "legal advice" was left blank.

But we do know its broad thrust. Early in the document there is a mention of "the advice from the Attorney General's Office that any incentive involving a remission of tax properly due would be open to successful challenge on grounds of unconstitutionality." This indicates the Attorney General told the Cabinet the amnesty was probably unlawful.

The Department of Finance even got outside opinion from some unnamed "prominent tax practitioners". One of them "volunteered a non-legal opinion that a remission of tax would be unconstitutional". This, again, offered independent confirmation of the Attorney General's view that a challenge to the amnesty on constitutional grounds would have a good chance of success. So before it agreed to bring in the amnesty, the Fianna Fail/Labour coalition knew that it was probably in breach of the State's basic laws.

Under pressure from Ruairi Quinn in the Dail this week, the Taoiseach agreed to ask the Attorney General for his opinion on the legality of the current measures. If he does so, it may be worth Michael McDowell's while to consider his predecessor's advice on the constitutionality of the amnesty itself. The Supreme Court has consistently stated a right and duty to act when a potential breach of the Constitution comes to his notice.

In the meantime, the Taoiseach assured the Dail the new special amnesty for amnesty evaders "does not apply to those coming under inquiry by the Revenue Commissioners, the Ansbacher investigations, the Flood tribunal, or the Moriarty tribunal". It is not at all clear, however, how he knows this or how the provisions of the amnesty legislation can be set aside for some tax evaders and not others. What is clear is that anyone inclined to take such assurances at face value is prey to the condition which Dr Johnson attributed to people who marry a second time: the triumph of hope over experience.