Ulster Bank believes that arrears of DIRT should be paid from the time incomplete non-resident accounts were opened, according to its chairman, Sir George Quigley.
He also told the inquiry that he hoped the sudden compliance "slippage" in Ulster Bank branches since 1998 was only a "blip".
The inquiry heard that the bank found "five or six" bogus accounts since he became chairman in 1989. However, a review of documentation in 1991 showed a 75 per cent failure rate in declaration forms.
Sir George, previously secretary of Northern Ireland's department of finance, said it was his guess that there were some cases in which forms were not available from the beginning.
"Therefore our own view is, without any reservation, that arrears of DIRT should be paid from the start of the accounts where there were not appropriate forms available."
He agreed with Mr Sean Doherty, TD for Longford-Roscommon, that "the law is the law".
He believed, however, that the outstanding liability for Ulster Bank would be "very, very considerably less than the figure of £900,000 which has been given quite a lot of currency".
He said there would be discussions with Revenue at which the precise figure would be computed, and it would be a lot less than £900,000, leaving out interest or penalties.
Sir George accepted that the Ulster Bank Group's internal audit found a 75 per cent failure rate for declaration forms in 1991 and in "every single case where we identified the need for reclassification, that reclassification was done and in fact DIRT was paid from that point onwards".
DIRT was paid from the point of reclassification onwards on the basis that branches were under "pellucidly clear" instructions and would have got declarations in all cases. The bank carried out two "clean-ups" for Ulster Bank Ltd in 1993 and 1994. In 1993, 0.5 per cent or 49 accounts were reclassified and the following year, 143 accounts were reclassified as resident accounts, a total of 1 per cent of all deposit accounts.
He said those audits were "responded to vigorously" by management and that "shines through what has been happening over the last 10 years".
It was "extremely disappointing" that there had been a slippage in 1998 where 20 per cent of accounts tested were found to be deficient. However, they were "disbursing" through all the branches a degree of "very strong accountability and I would expect that to produce very, very swift action indeed".
He added that the Public Accounts Committee's scrutiny has put it up in "neon lights".
Mr Oliver Lynas, the bank's head of group compliance, said that although the statistics "worsened slightly" last year, action had been taken to rectify this.
He said the branches they inspected last year were ones they considered "high risk" and which had poor audits in the previous two to three years, so the figures for 1998 were skewed.
There was undoubtedly a deteriorating trend but it was down to "the pressure our branches are currently under". Business in the Republic particularly was expanding because of the buoyant economy. They were capturing an increased market share and were doing that against a background of an "unprecedentedly high staff turnover". The problem was "very much at the top of our agenda".
Sir George said that the bank's auditors had uncovered five or six bogus accounts. Mr Lynas told the committee that they identified six bogus accounts in the South and to the best of his knowledge they were closed, and the money was returned to the depositors. They did not want the business.
