Controversies such as the Greencore and Telecom affairs and the beef tribunal, coupled with his apparent wealth, led the Revenue Commissioners to seek tax returns from Mr Charles Haughey in 1992, the Moriarty tribunal was told yesterday.
Mr Christopher Clayton, Chief Inspector of Taxes, said it seemed "quite inappropriate and perhaps even scandalous" that a taoiseach should be so much in tax arrears.
The tribunal also heard that from 1979 onwards the Revenue Commissioners kept a file of newspaper articles, about Mr Haughey's wealth and lifestyle, written by journalists such as Frank McDonald and Dick Walsh of The Irish Times.
Mr Clayton said he instituted a review of tax compliance in the semi-State sector in late 1991. "That inquiry may have been prompted by certain matters that came into the public domain, problems with Telecom Eireann, Greencore, the beef tribunal. All those were happening in late 1991 so I would have been conscious of the fact that there was non-compliance by persons from whom I would have expected compliance.
"Now I was, of course, conscious of the fact from my earlier handling of Mr Haughey's capital gains tax position that tax problems had arisen in his own personal case. It also seemed to me that he was a relatively wealthy individual with property. Furthermore, it seemed quite inappropriate and perhaps even scandalous that a taoiseach should be so much in arrears as regards tax compliance, as regards return filing."
Mr Clayton said he was also aware of Mr Haughey's previous tax "problems". He was referring to the Revenue's efforts to collect capital gains tax from a £300,000 payment Mr Haughey received from the Gallagher Group. It was recorded as a non-refundable deposit on lands at Kinsealy.
Asked by Mr Jerry Healy SC, for the tribunal, if Mr Haughey was singled out by the Revenue at this time, Mr Clayton replied: "It's not an unfair comment."
Referring to the Revenue "newspaper cuttings file", he agreed that they were considering the questions being raised in the media. Mr Clayton denied that the Revenue Commissioners were interested in Mr Haughey's lifestyle and said it would be "virtually impossible" to monitor an individual's day-to-day spending.
"It's not possible to know whether a person spends £10 on a shirt or £500 on a shirt. You can't go monitoring these things."
