The new powers given to the Revenue Commissioners will be used with discretion, the Revenue chairman, Mr Dermot Quigley, said last week.

He said the powers included in this year's Finance Act would not be focused on "smaller cases" where the potential tax loss from evasion is unlikely to be significant.

This suggests that the Revenue is unlikely to order financial institutions to produce the deposit books of their smallest customers, but is more interested in catching major tax evaders. The Revenue also pointed out that not every official would be armed with the new powers.

Nevertheless, the powers do allow greater scrutiny of customers' bank accounts and more importantly, the transactions associated with them.

However, under the new process there is an enhanced internal review procedure where a taxpayer is aggrieved with the manner in which powers are being exercised.

The current review mechanism involves a senior Revenue officer (normally the Revenue's Director of Customer Services) unconnected with the investigation, evaluating whether it has been fair and followed proper procedure.

Under the new rules, taxpayers can opt for this arrangement or a new procedure where the review is carried out by the Director of Customer Services and an external reviewer. Neither person will be from the Revenue or the Civil Service. Recruitment of a panel of external reviewers, who will have expertise in the taxation area, is currently being undertaken. Taxpayers will be able to appeal to the Ombudsman.

Many of the new powers hinge on the "reasonable opinion"' of the authorised officer investigating the matter. For example, the Revenue can only order a financial institution to make available a customer's books and records if the "reasonable opinion" of the authorised officer is that these are needed to further an investigation into tax evasion. However, it is important to note that the "books and records" can include material in relation to a taxpayer's spouse and children - a provision which may prove controversial. It is also important to recognise that an official can only order the "books and records" after receiving the written permission of one of the three Revenue Commissioners. The person at the centre of the investigation will also be informed that an order concerning his or her bank details is about to be issued. Before the Revenue implements the order, the taxpayer or the financial institution is entitled to make representations to the authorised officer involved and ask him not to serve the order.

The Revenue has to apply to the Appeal Commissioners for permission to execute the order. The hearing before this individual, in terms of procedure, will be similar to a hearing of an appeal against an income-tax assessment. This means the taxpayer and the financial institution are entitled to representation.

If the Appeals Commissioner decides to give consent, the authorised officer must serve notice on the financial institution and the individual within 14 days.

The Revenue Commissioners are also entitled to apply to the High Court seeking a similar order and the judge can give the authorised officer permission to freeze the assets of the individual involved. These High Court hearings are held in private.

As with an appeal to the Appeal Commissioners, an authorised officer cannot make an application to a judge of the High Court without the written consent of a Revenue Commissioner.

Under another section the Revenue can require a third party (other than a financial institution) to make available for inspection books and records relevant to the alleged tax liability of another person. Once again, an authorised officer can also apply to the High Court for an order requiring a third party to supply such material.

The authorised officer will "as far as possible" advise the taxpayer as to why an order is being issued to a third party in respect of his or her tax affairs. There are no provisions included to allow the Revenue to freeze the assets of a third party.

Crucially for solicitors, accountants and other professional advisers, this section cannot be used to force them to disclose information about their clients.

The new powers allow the Revenue to enter a financial institution to check on the veracity of Deposit Interest Retention Tax (DIRT) returns. An authorised officer can check the procedures in place to ensure compliance and may check a sample of accounts which are claiming to be exempt from DIRT.