If the Revenue Commissioners had referred Mr Charles Haughey's capital gains tax liability to its investigation branch, Mr Haughey could have delayed the case with court actions, the Moriarty tribunal heard yesterday.
The former chairman of the Revenue Commissioners, Mr Seamus Pairceir, again defended his decision not to send the file to the investigation branch. "It never came into my mind that I should send it to the investigation branch, and even if I had, I don't quite see what the investigation branch could have done," he said.
"It would be subjected to, what I know now, the extraordinary powers of resistance that the particular taxpayer is able to display, and they would have just got themselves into various court actions."
He also pointed out that the investigation branch did not have any special powers like the Criminal Assets Bureau.
Mr Pairceir said he had not changed his view that the Revenue Commissioners should have appointed a liquidator to the Gallagher Group so that the contract between Mr Haughey and the Gallagher Group could have been investigated.
The tribunal had earlier heard that Mr Haughey had received £300,000 from the Gallagher Group, as a deposit on land at Kinsealy. However, the land was not sold, the Gallagher Group went into receivership and the deposit was not refundable.
Mr John Coughlan SC, for the tribunal, asked Mr Pairceir what he would do now, with the benefit of hindsight.
"I agree with myself," Mr Pairceir said. It was "a terrible distortion" to say he thought the tax affairs of Mr and Mrs Haughey should not have been investigated, either now or then.
The former Revenue chairman denied he had taken a major role in this case. He said there were approximately nine decisions made on the case during this period and six of them did not involve any decisions by him.
Asked why a chairman of the Revenue Commissioners would have been involved in this case, Mr Pairceir said he felt that the chief tax inspector, Mr Christopher Clayton, needed reassurance on the issue.
However, Mr Clayton told the tribunal he did not seek such reassurance. "I didn't feel any need for any reassurance, but he [Mr Pairceir] may have felt some need for it," Mr Clayton said.
Mr Jerry Healy SC, for the tribunal, pointed out that Mr Clayton was the expert in this area and asked why Mr Pairceir should feel he needed reassurance. Mr Clayton again agreed that he did not need that reassurance.
Mr Clayton also agreed with the tribunal chairman, Mr Justice Moriarty, that a type of "poker game" was played between the Revenue Commissioners and taxpayers.
He said tax inspectors tended not to let taxpayers know the full extent of their knowledge. This explained why, although the Revenue Commissioners knew about Mr Haughey's £300,000 payment from the Gallagher Group, Revenue did not clearly point this out in numerous letters to Mr Haughey's accountants in 1994 and 1995, seeking information on CGT liabilities.
The total CGT liability was eventually cleared in January 1998.
