Fianna Fáil's internal investigation into Mr Michael J. Collins will begin shortly, the chairman of the parliamentary party, Mr Seamus Kirk, has said.
The party's own examination of Mr Collins's settlement - chaired by Mr Kirk, a TD for Louth - could force the Limerick West TD to resign his seat.
Mr Collins will have to explain whether he truthfully replied to questions posed to all TDs by the State-appointed Standards in Public Office Commission after last year's election. Under ethics legislation, all TDs must provide a tax clearance certificate to the commission within nine months of election and swear within one month of polling that they are fully up to date on all tax matters.
If it is shown that Mr Collins was not truthful, he could face prosecution under the 1938 Statutory Declarations Act, which, following amendment in 2001, provides for a €2,500 fine and up to two years in jail.
However, Mr Collins's agreement with the Revenue came during the second quarter of this year, which seems to be outside the timescale allowed by the Standards in Public Office Commission.
Last night a spokesman for the commission said it would consult quickly with the Revenue Commissioners on the matter "over the next numbers of days" about the implications of yesterday's publication.
Like all other Fianna Fáil general election candidates, Mr Collins signed a party pledge before last year's election that: "I have complied or am in the process of complying in good faith with all my tax obligations".
Furthermore, Mr Collins promised "to abide by the highest standards of ethical behaviour as a candidate" and comply with Fianna Fáil's Guidelines on Standards in Public Life.
The pledge also states: "I promise that if called upon by the National Executive by a two-thirds majority of the members present and voting at a meeting specially convened for the purpose, to resign my seat or withdraw my candidacy, I will do so."
In a statement Mr Kirk said: "I have only become aware of the details of Deputy Michael Collins's settlement . . . following the publication of the report by that body this afternoon."
However, Mr Kirk told The Irish Times last night that Mr Collins had given him "general details some weeks ago, though I did not know the sum involved until the publication today".
Asked if the Taoiseach, Mr Ahern, had been told at the same time, Mr Kirk said: "I assume that he told the Taoiseach in the normal course of things."
