Tens of thousands of Irish residents with bank accounts abroad are receiving letters this week advising them that they face a Revenue inquiry. They have just five weeks to regularise their affairs or face heavy financial penalties if found to have evaded tax, writes Colm Keena
The letters are being sent by the 10 top Irish financial institutions. Although they are being sent to customers in the State, the banks are posting the letters from offshore and UK branches. This means Revenue cannot seize the lists of customer addresses.
Advertisements the Revenue have taken out in today's newspapers warn those with accounts or investments outside the State that they have until March 29th to come forward if they want to make a voluntary disclosure.
People who do not come forward and have a tax liability will have their names published if caught and also risk incurring maximum penalties and prosecution.
The Revenue has been using new powers introduced in 1999 to search accounts here for traces of money going to accounts in the UK and offshore destinations such as the Isle of Man and Jersey.
It believes that sending similar letters to customers of the Bank of Ireland Trust Company, Jersey, led to approximately 80 per cent of the settlers of trusts there coming forward.
The Revenue netted €105 million from the 254 people who made disclosures, an average of €400,000 per person. An even larger number came forward when a similar exercise was conducted involving the Irish Permanent in the Isle of Man.
The value of that operation to the Revenue has not been disclosed.
The 10 institutions currently sending out letters are: Bank of Ireland; AIB; Ulster Bank; NIB; Irish Permanent; ACC; EBS; Irish Nationwide; Anglo-Irish; and First Active.
The placement of advertisements in the newspapers by the Revenue is in part aimed at persons who may have funds abroad with other banks, such as the UK banks. Some Irish financial institutions are including with their letters a new 42-page document produced by the Revenue.
The document, Making a Qualifying Disclosure of an Offshore Related Tax Default to Revenue, includes a form to be sent to the Revenue by persons who wish to come forward. It is understood the Revenue has printed tens of thousands of the booklets and is anticipating a very significant response to the letters.
The booklet outlines how much tax and interest is owed on sample deposits over sample periods. It also illustrates the significant difference between the penalties which will be incurred by persons who come forward and persons who are caught later.
The Revenue's assault on lodgements outside the State on which tax are due is being spearheaded by the Offshore Assets Group, which comprises just seven Revenue officers and another official on a job share. Nevertheless, the Revenue says it is determined to pursue all those who do not come forward.
It also says that changes to national and international law mean it is becoming easier to track down assets hidden abroad.
To date the unit has found that the bulk of the people coming forward are in their 50s and 60s. They have received many complaints of the stress these people have suffered as a result of the Revenue initiative.
The unit has also found that many people who have funds abroad have left traces of those funds in this jurisdiction, either when sending the money out through the Irish banks or repatriating some of it to make investments here.
Although banks and bank officials have legal obligations in relation to moving funds abroad which they believe may be undeclared, the Revenue does not yet believe it has the evidence needed to successfully prosecute any bank or individual banker.
The sending out of the letters follows on from a meeting the chairman of the Revenue, Mr Frank Daly, held with the banks' chief executives in December.
A number of Irish financial institutions are now winding down their offshore operations or no longer taking deposits from Irish resident customers.