An external audit of the State-owned ACC Bank in 1992 concluded it had a potential Revenue liability of £17 million in relation to unpaid DIRT on bogus non-resident accounts.
The bank has recently paid the Revenue £1.349 million in a voluntary interim payment pending a full Revenue audit going back to the introduction of DIRT in 1986.
A "dressing down" was given to managers of the State-owned bank in 1992, when only 50 per cent responded to a head office request for confirmation that non-resident accounts without valid declarations were being changed to DIRT-liable status.
The investigation by external auditors in November 1992 looked at accounts with deposits totalling £84 million, and found that £26.3 million was in deposits with no non-residency declarations or questionable non-residency declarations.
Assuming that the situation discovered in the branches reviewed was representative of the network as a whole, the audit concluded that the potential liability could be in the order of £17 million.
In 1993, 852 accounts with deposits of £7,689,512, were reclassified as resident by the bank. However, some were switched back to non-resident status within months.
Also in 1993, at a meeting with the Revenue the bank's tax advisers, according to their notes, "were left with the clear impression that Revenue would not be pursuing the issue of defective declarations in prior years".
The bank informed the comptroller that during the 1993 meeting there was extensive discussion of the non-resident account situation and that "the question of payment of arrears was not mentioned at any stage during that meeting".
In 1998 the bank complained to the Revenue that it was "attempting to start fresh inquiries on this issue nearly six years after the two senior Revenue officials had been informed of the situation and had chosen not to pursue the matter".
The Revenue told the bank the two officials did not have the power to write off any DIRT liability.
A non-resident account with ACC Bank Tallaght in 1993 was found to belong to a member of the bank's head office staff. A sterling non-resident deposit account in ACC Bank Tuam in 1995 belonged to a branch staff member.
Investigations in the Tullamore branch in 1995 found that a member of staff was operating non-resident accounts with fictitious names and addresses. The accounts were found to have been operated with the knowledge of the branch manager and assistant manager, and had aggregate balances in excess of £50,000.
During the 1993 meeting with Revenue, the bank said it would take disciplinary action against members of staff found to be acting in contravention of the tax law. The comptroller was told the staff member in the Tullamore branch was dismissed.
In relation to the Tallaght and Tuam accounts, there was no record of action being taken against the managers. The staff were told to regularise their affairs, the comptroller was told.
