Both Mr Charles Haughey and Mr Michael Lowry face potentially hefty tax bills as a result of the Dunnes tribunal findings. And Mr Lowry also faces the threat of criminal action under 1993 legislation, which carries a mandatory jail sentence for anyone convicted of not fully declaring significant amounts of income for the tax amnesty.
Much of the onus now moves to the Revenue Commissioners to pursue the evidence of tax evasion. The report says that if Mr Lowry does not face heavy penalties for his tax evasion, then "it becomes very difficult to condemn others who similarly flout the law".
The report also concludes that Mr Haughey was trying to hide income from the taxman. The Revenue said yesterday that any action necessary to uphold the implementation of the tax code was being taken.
Meanwhile, the report raises a range of other potential legal issues relating to breaches of exchange control regulations and company law.
Mr Lowry could face a huge tax bill. The Revenue is already thought to be in discussion with Mr Lowry and his advisers. In a brief statement yesterday Mr Lowry said his priority was to sort out his tax affairs. This will be no easy task. If he is found not to have declared all his income for the amnesty, he will be liable for the full interest and penalties on all money cleaned through the amnesty.
The Revenue will then examine the tax implications of the payments identified in the tribunal's work, much of which appears to have been income to the former Minister. Without knowing how much he declared through the amnesty, the tax bill facing Mr Lowry is impossible to calculate but it is certain to be substantial.
The Revenue and the Director of Public Prosecutions could also decide to press for a criminal charge. Knowingly providing misleading information in availing of the tax amnesty, relating to an income tax amount of £100,000 or more, carries a penalty under the 1993 amnesty legislation of, at most, twice the unpaid tax and "to a term of imprisonment not exceeding eight years". Mr Lowry received more than £100,000 from Mr Dunne.
For such sums, the court is obliged on conviction to impose a prison term. Its length, however, is at the court's discretion, with a maximum of eight years. Some legal sources believe this provision may be open to constitutional challenge.
The Revenue would have to assemble a high level of proof to gain a criminal conviction. Evidence given to the tribunal could not be presented. Instead, the Revenue would have to prove the evidence before a jury to secure a conviction.
Legal sources say such criminal prosecutions are difficult to achieve, as the Revenue faces a heavy burden of proof. So far two people have been successfully prosecuted under the 1993 legislation, although fines rather than jail sentences (imprisonment is not mandatory where the sum involved is less than £100,000) were imposed. A few other cases are in the pipeline.
Mr Lowry also appears to have acted in breach of exchange control rules, as outlined in the 1954 Exchange Control Act, by routeing money through offshore bank accounts. Mr Ben Dunne also looks to have breached these rules by paying the money into such accounts. Conviction of such a breach carries penalties, at the court's discretion, ranging from a £5,000 fine to a prison term of up to two years.
The court is also allowed to rule that any currency held illegally offshore "be forfeited", although how this would be applied in a case going back some years is not clear.
The Minister for Finance, Mr McCreevy, must now decide how far an investigation of a possible breach of exchange control rules should be pursued. Last night a Department spokesman said that it had referred the report's references to breaches of exchange controls to the Central Bank and requested a report on them. This indicates that the first steps have been taken to look into the offshore accounting.
The relationship between Dunnes Stores and Mr Lowry's company, Streamline Enterprises, raises other questions. Mr Lowry appears not to have paid VAT on his house extension and to have paid some under-the-counter bonuses to employees, presumably without the accompanying PRSI. And the relationship, under which Mr Lowry's company acted as an arm of Dunnes Stores, may have been in breach of part of the Companies' Act legislation.
The Revenue will also want to question Mr Haughey on the £1.3 million he received from Ben Dunne. The report says it "cannot believe" that Mr Haughey was not aware of the tax implications of this gift and concludes he had kept the money offshore to try to hide it from the Revenue.
Assuming he has not already settled any liabilities, the tax, interest and penalties on the £1.3 million could run to over £1 million. The capital acquisition tax (CAT) bill would be more than £500,000 and interest and penalties could be as much or more again. If income tax payments had been involved, Mr Haughey would have faced heavier penalties.
But the terms of the 1993 rules do not apply to CAT payments, which are governed by earlier legislation. The Revenue could also decide to examine other aspects of Mr Haughey's tax affairs.
Like Mr Lowry, Mr Haughey may also face questions relating to exchange control legislation. The so-called Ansbacher Deposits from which some of his living expenses were paid were clearly opened in breach of these rules. There had been speculation that Dunnes Stores would look for the money back from the former Taoiseach, although this is now thought unlikely.
What of the other depositors who held money in the Ansbacher accounts, which the tribunal heard totalled more than £38 million at one stage? The Revenue can only seek information about a specified taxpayer so could not seek general information on the accounts, much of which may now reside in the Cayman Islands, or have been destroyed.