The Revenue Commissioners have lodged an appeal with the Circuit Court against the decision to reduce their £2 million tax assessment on Mr Charles Haughey to zero.
The Revenue formally applied to the Circuit Court shortly before Christmas for a rehearing of the Haughey tax judgment. The application was made just before the deadline expired for lodging an appeal against the decision made in Mr Haughey's case by an appeal commissioner, Mr Ronan Kelly.
It is thought likely the former supermarket owner Mr Ben Dunne, who gave Mr Haughey £1.3 million, will be called to give evidence when the case is heard in private in the Circuit Court. Mr Justice McCracken, the chairman of the tribunal which uncovered the payment, may also be called to give evidence, as could Mr Haughey.
The Revenue is pressing for an early hearing of the case, based on the significant sum of money involved and the amount of evidence available.
In preparation for the case, tax inspectors will be able to cross-examine Mr Haughey about his financial affairs. They may also inspect his books to gather evidence to support their new case. The investigation may be spread wider, to include accountancy and financial services companies linked to Mr Haughey.
Earlier this month, Mr Kelly reduced Mr Haughey's tax bill, arising from the McCracken tribunal, from almost £2 million to zero after Mr Haughey's lawyers argued successfully that the McCracken report did not provide adequate or proper proof for the tax assessment. The Revenue was given 10 days in which to appeal the decision.
The ruling, which proved hugely controversial, led to Opposition attacks on the Taoiseach in the Dail. Mr Kelly is a brother-in-law of Mr Ahern.
A spokesman for the Revenue declined to comment yesterday on a report in the Sunday Tribune which said that Mr Haughey offered to make a tax settlement payment before Mr Kelly's ruling, but this was rejected by the Revenue.
Mr Haughey told the McCracken tribunal in July 1997: "I now accept that I received the £1.3 million from Mr Ben Dunne, and that I became aware that he was the donor to the late Mr Des Traynor in late 1993, and furthermore I now accept Mr Ben Dunne's evidence that he must have handed me £210,000 in Abbeville in November 1991."
Mr Traynor was Mr Haughey's financial adviser and acted as a conduit for payments from Mr Dunne to Mr Haughey. The November 1991 payment of £210,000 sterling was handed personally to Mr Haughey in the form of three sterling drafts.
The incident was immortalised by the recollection of Mr Dunne at the tribunal. Mr Haughey seemed "a broken man" and he was sorry for him, Mr Dunne said. "Look, that's something for yourself," he said, handing over the drafts. "Thank you, big fella," Mr Haughey is said to have replied.
