AIB is determined to prove it had a deal with the Revenue Commissioners in 1991 to write off its DIRT liabilities. But, as the Revenue never put anything in writing, the bank's task now is to convince the Committee of Public Accounts that an agreement on a nod and a wink is still an agreement that must be honoured.
The bank is becoming increasingly upset with the committee for describing the arrangement it says it had with the Revenue as an amnesty. Its former head of taxation, Dr Donal de Buitleir, almost winced when he heard the "A" word.
Since the 1993 tax amnesty, Dr de Buitleir explained, the term was far less palatable to the bank. "I don't like the word `amnesty'. Following the 1993 amnesty it is a much more emotive term than in 1991," he said.
Yesterday AIB told the committee its agreement with the Revenue was a type of amnesty. As former Revenue officials themselves, Mr Jim O'Mahony, one of AIB's tax officials, and Dr de Buitleir agreed with the committee that an amnesty can be sanctioned only through legislation but insisted the bank had nonetheless secured a tax write-off.
"An amnesty, as I put it in my meetings, was in inverted commas. It was an agreement or a settlement," Mr O'Mahony said.
AIB maintains the "amnesty" was proposed to it by the Revenue as part of an industry-wide initiative to regularise the use of non-resident accounts and had been sanctioned by the board of the Revenue Commissioners.
In hindsight, it accepts it would have far less explaining to do if it had something on paper from the Revenue but it accepted this might be difficult for the State's tax collection agency to do. This testimony goes to the heart of the debate between AIB and the Revenue and over the next few days the committee will be hoping to establish whether there was indeed some sort of an understanding between the two sides in relation to DIRT.
Today it will pursue a fresh line of inquiry in this regard.
Documents submitted last week contain details of a telephone conversation between the former Revenue chairman, Mr Cathal Mac Domhnaill and senior AIB officials which may support the bank's claim of an understanding.
They will also show that shortly after the current chairman, Mr Dermot Quigley took over last year, a further telephone conversation took place which, it is said, refutes what was said by his predecessor. Both men will be recalled today to discuss the contents of these documents.
Over the past five weeks the various Revenue officials who have appeared before the inquiry indicated their frustration in dealing with the banking sector, asserting that when it came to paying tax, the financial institutions were in a different league to everyone else.
Yesterday the committee established that if AIB's claims stand up, this is certainly true.
In its preparations for the DIRT inquiry this year, AIB's tax officials asked its auditors, PricewaterhouseCoopers, to compile a detailed report of any similar deals which the Revenue had agreed with other taxpayers. The bank got little joy from its accountants however.
PricewaterhouseCooper replied that while it was not uncommon for the Revenue to enter into such arrangements with particular taxpayers, there was no precedent for facilitating tax write-offs for an industry group.
Today, AIB's group chief executive, Mr Tom Mulcahy, and chairman, Mr Lochlainn Quinn, will be asked to tell the committee what they knew about bogus non-resident accounts and what they did about them. After that the committee will allow legal counsel for AIB and the Revenue to cross-examine their respective witnesses to tease out what really happened at the disputed meeting in 1991.
AIB is represented by Mr Dermot Gleeson while Mr Eoghan Fitzsimons is acting for the Revenue. After all the talking, it will be up to them to prove convincingly whether or not AIB still owes up to £100 million in unpaid DIRT to the Revenue.