Advisers who aid tax evaders to be prosecuted

Prosecutions will in future be taken against bank managers and other financial advisers if they help clients to evade taxes, the Revenue Commissioners have warned.

However, the chairman of the Revenue, Mr Frank Daly, made clear they would not prosecute bank officials and others for helping clients set up bogus non-resident accounts during the 1980s and 1990s.

During an appearance before the Dáil's Public Accounts Committee, Mr Daly said it would be "very difficult" to successfully prosecute cases that could be up to 20 years old.

Explaining the Commissioners' attitude, he said: "The first stage would be to establish tax evasion. Then you have to get the evader to be willing to come onto the Revenue's side and give evidence."

It had repeatedly encouraged bogus non-resident accounts holders to give such evidence but, so far, no one has been prepared to do so, he told Fine Gael TD, Mr Michael Noonan.

In future, prosecutions against those who aid and abet tax evasion would feature "quite prominently" in the Revenue's work, following a decision made at a recent management meeting.

"It is better for us to go about more current evasion rather than trying to look back at some of those cases from the 1980s and 1990s. Quite frankly, it would be extraordinarily difficult to prove in a court of law." Mr Noonan asked whether the Revenue has equally decided not to prosecute those involved in running the National Irish Bank/Clerical Medical Insurance offshore accounts.

"I would not necessarily say that we have taken that decision, but the same thing applies. There are a lot of people who said that they were advised by so-and-so and so-and-so.

"We specifically asked them to come on side with the Revenue but we have not got a response so far," said Mr Daly, who was accompanied by officials from Revenue and the Department of Finance.

He doubted whether Revenue could co-operate with a Cork-based group, who have spoken about launching a class action against the banks for giving faulty advice, because the group wants compensation.

Asked about offshore accounts held in a Bank of Ireland subsidiary in Jersey, he said there was no evidence that Irish-based bank officials had encouraged clients to join up. The trust company is "managed and controlled" in Jersey and bank officials working there have "no obligation" to Irish tax authorities, he told the former Fine Gael leader.

"Jersey officials might have secured funds on visits to the State, rather than officials of the Bank of Ireland here advising clients to put money in Jersey," he declared.

The Revenue is also to set up a special unit to track the country's wealthiest people to ensure residency tax rules are being obeyed.