A former chairman of the Revenue Commissioners has admitted he was wrong when he told the Public Accounts Committee last year that all the financial institutions had been approached in 1991 about the administration of their deposit accounts.
Mr Cathal Mac Domhnaill, who was on the Revenue Commissioners board from 1987 to 1998, told the DIRT inquiry yesterday there had not been an approach to all financial institutions, but to specific institutions.
The approach he had been thinking of related to an earlier period. "I think I was trying to telescope what happened over a period of time rather than in 1991," he said.
The question, posed by Mr Bernard Durkan, related to a specific tax case, and his reply had been aimed at not referring to that case.
He said he was trying to give as much information to the committee at the time as he could but he had been relying on memory quite a bit. He had been trying to emphasise the breakthrough in investigations of individual taxpayers and the scope of the tax-evasion problem.
The committee's chairman, Mr Jim Mitchell, said the point was important. AIB had contended its understanding was that approaches were being made to all the institutions in 1991 on the subject of bogus non-resident accounts.
In his opening statement, Mr Mac Domhnaill, who had responsibility for policy and legislation while commissioner and chairman, said that while minutes of meetings were not taken during his 11 years on the board, decisions and orders made by the commissioners were minuted.
Later, he admitted that a tax proposal worked on by Mr Sean Moriarty, an assistant secretary, over a period of 1 1/2 years had been dealt with orally at a meeting in the chief inspector's office.
He dealt with Mr Moriarty's document "fairly quickly" and came to its reference to introducing a second amnesty soon after the introduction of the self-assessment system, which had included a "major amnesty".
It would have undermined Revenue's efforts to gain compliance, he said.
"I was taking a stand in relation to any new amnesty," he said.
Mr Mac Domhnaill viewed the scale of the tax-evasion problem as much larger and he had been trying to win back the powers Revenue had lost at the introduction of DIRT when returns on interest were no longer made.
Revenue had been making more substantial proposals at the time to get information about bank accounts, which was "fundamental to a self-assessment position".
"Getting full implementation of the retention tax itself, that was a minor issue by comparison with the monies that had gone out of reach as a result of losing the reporting powers on interest," he said.
Prior to 1987, he was assistant secretary of the legislation and statistics branch. In that capacity, he had not dealt with the introduction of DIRT, nor had he been involved in the drawing up of a circular in 1986 - SIM 263 - which prohibited inspectors from investigating non-resident bank accounts pending further instructions.
"It did not come to my attention as an issue until near the end of my term," he said.
Asked by the chairman why he had not taken action on eight proposals made to counter tax evasion between 1987 and 1997, Mr Mac Domhnaill said they had not been made to him.
Mr Mitchell added that it was "an established fact" that the powers given in the 1986 Finance Act had not been availed of.