Arrears arising out of £5 million being classified incorrectly by Irish Permanent as resident accounts in its Killarney branch have not been paid to the Revenue Commissioners.
In 1991, the Killarney branch came to the notice of the internal audit department as "a particular area of concern" because of the number of account-holders with US addresses. Standard audit procedures had checked US telephone listings and confirmed the address of people of the same surname.
"Internal audit concluded that accounts were being opened on behalf of customers using false names, at an address of a relative with that surname in the US."
US telephone books were also used to supply false addresses. "Holders of false non-resident accounts were making lodgements of specified amounts on certain days so that, if the transaction was queried, documentation relating to lodgements made by valid non-residents could be used to support lodgements made by false non-residents."
Subsequently about £5 million was reclassified as resident funds. "No arrears of DIRT was paid to the Revenue arising out of the misclassification of funds," the report states.
Irish Permanent, with 10.62 per cent of the non-resident deposit market, made a £6.6 million payment to Revenue last year after it incorrectly applied provisions in the 1996 Finance Act to its October 1998 instalment. Earlier in the year, £72,000 in DIRT liability over 995 accounts for the period to April 5th 1998, arose due to an administrative error. In some instances, re-designation of accounts from non-resident to resident had not been made. The amount was paid to the Revenue Commissioners plus £4,500 interest.