The Revenue Commissioners are to formally launch their investigation into the use of single premium insurance policies for tax evasion purposes by the beginning of the summer.
The investigation will be one of the largest carried out by the Revenue Commissioners since the Dirt inquiry, and could involve up to €1 billion in undeclared income.
It will be modelled in part on the Dirt inquiry, where individuals who used the products for tax evasion will be able to make voluntary disclosures during an initial period. A spokesman for the Revenue Commissioners said preliminary work was ongoing and that it would be formally launched within two months.
Provisions were included in the Finance Bill last month to facilitate the investigation, including the voluntary disclosure scheme, where people will be subject to lower fines and penalties if they come forward voluntarily. They will also be able to avoid publication of their names
Under the new powers, revenue officials will also be able to access information on insurance policies taken out by Irish residents on a sample basis, once they have reasonable grounds for suspecting that policies may have been used to evade tax.
Up to €33 billion of the single premium investment policies were sold over the past 20 years by the major life assurance companies including Irish Life, and the insurance subsidiaries operated by Bank of Ireland and AIB.
During the 1980s the investment policies were particularly attractive for people with large amounts of cash that had not been declared to the Revenue Commissioners. Insurance companies paid the tax on profits from the policy, and when it matured, there were no liabilities associated with the funds the investor received.
The Dáil Public Accounts Committee has heard the money involved could exceed €1 billion.