Tax returns stayed minimal despite revelations

 

Just a month after the media stories broke saying Mr Michael Lowry and "a retired politician" had received large payments from Mr Ben Dunne, Mr Charles Haughey filed a tax return.

The State was in turmoil about payments to politicians, and most people knew Mr Haughey was the retired politician referred to. The Lowry story was published in November 1996 and the "retired politician" story in December.

In January 1997 Mr Haughey filed his tax return for the year 1995-1996. He made no mention of large gifts from rich friends, offshore accounts or any income other than his State pension, some rent and profits from deer farming. For the previous 10 tax years he'd filed similar returns.

Mr Haughey is no patsy. Yesterday Mr Seamus Pairceir, the chairman of the Revenue Commissioners for the period December 1983 to September 1987, seemed to offer this aspect of Mr Haughey's personality as part of the reason the Revenue should not have initiated an examination of his affairs in the 1980s.

The tribunal has been asking why he felt the circumstances surrounding a 1980 payment of £300,000 from the Gallagher Group to Mr Haughey did not warrant such an inquiry.

"It never came into my mind that I should send it to the investigation branch, and even if I had, I don't quite see what the investigation branch could have done," he said.

"It would be subjected to, what I know now, the extraordinary powers of resistance that the particular taxpayer is able to display and they would have just got themselves into various court actions."

He never made any general inquiry into the rest of Mr Haughey's tax affairs. Mr Pairceir has insisted that Mr Haughey was treated by him the same as any other taxpayer.

He has also said the Revenue's dealings with Mr Haughey were a matter of some sensitivity because of his public position.

Since Monday a number of Revenue officials have referred to the paucity of powers available to them in the 1980s. They couldn't demand replies to questions, and their only real power was the issuing of estimated assessments.

Furthermore, the heads of the tax departments of most major accountancy firms were former Revenue officials who knew the limits of what the Revenue could do in relation to discovering the details of their clients' affairs.

Yesterday Mr Robert Harrington, assistant secretary with the Revenue, replying to Mr Jerry Healy SC, said the situation changed drastically in 1988 with the introduction of self-assessment.

However, the change in the system led to no great improvement in the Revenue's raising of taxes due from Mr Haughey.

In December 1991 Mr Harrington was told by the Chief Inspector, Mr Christopher Clayton, that Mr Haughey's tax returns situation was not satisfactory.

He speculated that this might have been because it was considered inappropriate that a man of Mr Haughey's position should be so behind in his returns.

Over the following years to January 1997, the returns for the years 1985 to 1996 were made.

Every year Mr Haughey declared his pension, his rental income, some profits from deer farming and nothing else. No investigations were initiated, and nothing changed.

In one of the letters sent to the Revenue by Haughey Boland, Mr Haughey had pointed out that he was in receipt of an occasional cheque from RTE, and that he gave these to charity.