CRIMINAL CASE:THE INDEPENDENT Dáil deputy Mick Wallace faces up to five years' imprisonment if prosecuted and convicted of under-declaring VAT payments, which have reached more than €2 million with interest and penalties.
Under-declaration of VAT is an offence under section 1078 of the Taxes Consolidation Act, 1997.
People are guilty of a criminal offence under the Act if they “knowingly or wilfully deliver any incorrect return, statement or accounts or knowingly or wilfully furnish any incorrect information in connection with any tax”.
In yesterday’s Irish Times, Mr Wallace accepted he had filed a “false declaration” with Revenue in relation to his firm, MJ Wallace. He did this, he said, because he was trying to save the company and because he believed he would be able to eventually raise the money to settle the matter. However, he now believes Revenue will never get the money because his company is insolvent and he is not personally liable for its debts.
He under-declared a VAT liability of €1,418,894 on the sale of apartments. Interest amounted to €289,146 with penalties reaching €425,668, giving a total of €2,133,708. The fact Mr Wallace is now unable to pay the sum the company owes will influence Revenue on whether to pursue him through the courts.
Revenue has a “prosecutions admissions committee” that reviews serious tax or customs cases with a view to prosecutions.
Its main consideration is the strength of the available admissible evidence. Other considerations include:
Whether the offender has paid the money owed, including interest and penalties.
The level of disclosure made by the offender and the level of co-operation offered.
The period elapsed since the offence was committed, with historical cases much more difficult to prove.
The length and cost of a trial, and how that cost compares to the sum at the centre of the case.
The level of culpability and experience of the person at the centre of the case.
The need to set out deterrence for a person to offend in the future and for others to comply with the tax laws.
Traditionally, Revenue has opted to pursue those guilty of tax offences by pursuing them for the money they owe rather than through the courts to secure criminal prosecutions. The latter approach is often seen as time-consuming and resource-intensive, with the courts rarely imposing custodial sentences. Financially pursuing those who have not paid their taxes has always been seen as more beneficial to the State.
