Owners of property abroad face Revenue clampdown

25 April 2008
The Irish Times
THE REVENUE Commissioners is to seek new powers to force estate agents to automatically hand over information on Irish residents who buy foreign properties to discover if the money used to buy them has been declared for tax. SIMON CARSWELL , Finance Correspondent, reports.

Speaking at the launch of the Revenue's annual report for 2007, chairwoman Josephine Feehily said that, based on legal advice, Revenue could not pursue its request for client information on foreign property buyers from estate agents. However, she said Revenue would be asking the Minister for Finance for powers to access client data held by estate agents involved in the sale of foreign property to Irish residents.

"We thought we could access that information. We find that we can't, so we would like to do that. We will be approaching our colleagues in finance in due course."

Revenue is investigating 2,000 foreign property deals involving Irish residents to examine whether the money used to buy the properties - in addition to any rent earned on the properties - has been taxed.

It is difficult to quantify the number of Irish-owned overseas properties, as properties may not have been bought through Irish estate agents and auctioneers.

Revenue has already gained access to details of rent paid to Irish residents on overseas properties and data on Irish-owned overseas bank accounts under the EU savings directive which has indicated that the account holders may own foreign properties. Revenue has also paid for access to foreign land registry data which has proven "very useful".

Ms Feehily said Revenue was using a new computer system to identify high-risk taxpayers whose lifestyles will be checked against the taxes they pay. The system will provide details on 700,000 taxpayers, which Revenue will this year for the first time cross-check with other information to target the riskiest cases.

The system gathers a variety of information, including details on property transactions, rent and substantial purchases such as expensive cars, in addition to data on how often they file their taxes and whether they file on time.

Ms Feehily said Revenue was targeting cash businesses, such as the motor industry and pub trade, while tax officials in the southeast had purchased cash registers to learn how they could be manipulated by tax defaulters.

Revenue would not be refunding penalties paid by the estates of deceased tax defaulters, even though it no longer applies penalties to the estates of deceased defaulters who die before their taxes are settled.

She said tax settlements had been completed on an "offer and acceptance" basis, which meant a deal had been agreed between Revenue and the estates of deceased taxpayers. Ms Feehily said she would not be surprised if the representatives of a deceased tax defaulter took a legal action to recover penalties, but Revenue would defend any such case.

Revenue collected €734 million from 250,000 audits and compliance checks, a rise of a third on the checks carried out in 2006. Some €1.27 million was collected from 79 audits of barristers in Dublin last year, while another 57 audits or compliance checks on barristers are ongoing.

Some €151.4 million was collected from 44,000 audits and assurance checks of the construction sector, which accounted for 18-19 per cent of Revenue's audits in 2007. A further €26.9 million was collected from 722 audits and 7,223 checks of builders in the first three months of this year.

Revenue secured 10 convictions for serious tax evasion since the start of this year, in addition to the 14 secured in 2007. A further 103 prosecution cases are ongoing.

Revenue's special investigations have yielded €2.423 billion, as of the end of last month: €860.2 million from bogus non-resident accounts, €910.1 million from offshore assets, €450.6 million from life insurance products, €102.1 million from Ansbacher, €59.65 million from National Irish Bank's CMI scheme and €41 million from the tribunals.

Ms Feehily said all but the life insurance and offshore investigations were drawing to a close.
© 2008 The Irish Times

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