A third of tax returns fines remain uncollected

Office of the Revenue Commissioners:One-third of the fines imposed by the courts on people who have not filed tax returns may go uncollected, according to the Comptroller & Auditor General's (C&AG) report.

The report also found that taxes due remained unpaid in 25 per cent of a sample number of cases where tax returns had been obtained as a result of prosecutions.

The C&AG found that a comparison of the fines paid to the Revenue with the fines imposed by the courts indicated that one-third were not collected.

"There is little point in having fines imposed by the courts if there is no follow-up to ensure the fines are paid," the C&AG, Mr John Purcell, noted in his report. "Revenue has pointed out that the collection of fines is a matter for the Court Service."

Mr Purcell's report also noted that cases selected for criminal prosecution for failure to file returns involved a refusal of the taxpayer to respond to Revenue contacts.

"It would be expected that such cases would receive strong consideration for selection for audit. The extent to which such cases are audited is unclear."

The Revenue told Mr Purcell that it did not follow that a case considered suitable for prosecution was necessarily suitable for audit.

An examination of a sample of 99 individuals with 275 outstanding tax returns who were selected for prosecution found that five individuals had not made returns despite court orders to do so. Furthermore, it was found that, of the 79 cases where returns were filed as a result of the prosecution process, 33 had not filed returns for a subsequent year.

An analysis of the 194 returns made by the 79 individuals found that 50 per cent had declared a liability of less than €500 for the year under review.

"That the individuals appeared to require the Revenue to utilise the full extent of its compliance procedures to establish that fact must raise questions as to the completeness of such returns," the C&AG stated.

The returns were from self-employed people, including company directors, accountants, small manufacturers, publicans, builders, farmers, tradesmen, taxi-drivers and hairdressers, according to the report.

The C&AG's report noted that only seven of the 194 returns declared a tax liability of more than €10,000.