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01 Jul 2022

Who didn't pay their taxes? Jewellery designer, Midlands parachute club, US photographer on Revenue's hit list

Revenue Commissioners €1.015 billion in tax, interest, and penalties collected in just three months

Who didn't pay their taxes? Midlands motor vehicle dealer's huge €11  million  Revenue bill revealed

Revenue is responsible for collection taxes that help pay for public services

A Dublin jewellery designer ended 2021 with a tax bill of more than €500,000 while a Offaly Parachute Club owned more than €100,000 according to the Revenue Commissioners who have also tracked down unpaid Irish taxes to a photographer in the United States.

They are just some of the latest individuals and companies on the new Tax Defaulter list published by the Revenue Commissioners which also reveal that two people were jailed for not complying with the tax laws.

The new Revenue's published List of Tax Defaulters covers the period fomr October 1 to December 31, 2021. During the same three months, investigations resulted in more than €1.015 billion in tax, interest, and penalties who chose not to their way.

While most people pay up when Revenue calls others don't and have to be subjected to extensive audits to find out how much they owe.

Top of that list was Christopher Osborne, of 1 Glen Ellen Park, Swords, Co Dubin. The jewellery designer had unpaid tax of €288,042 following a Revenue Enquiry Case for Under-declaration of Income Tax. Interest was calculated at €128,370 while penalties ran to €86,412.60. The total bill ran to €502,824.60. A total of €72,010.50 was outstanding by the end of December last year.

Another entity with a big bill was the Irish Parachute Club Ltd which had an address at The Airfield, Clonbollouge, Co Offlay.. Listed as a parachute club, it had unpaid taxes of €65,134.15 after a Revenue Investigation Case for under-declaration of
PAYE/PRSI/USC. Interest on this ran to €€28,772.07 while the penalty was calculated at €19,540.25. The total owed by the company €113,446.47. None was left to be paid by the end of 2021.

There are some other notables on Part 2. Kevin Abosch, of 9 East, 93rd St, NY 10128, New York, is a photographer who was deemed to owe money for the Ireland. He had a bill of €183,241.10 after Revenue Audit Case for under-declaration of Income Tax.

James Dempsey, a publican in Cadamstown, Co Offaly ended up owing €59,704.36 following a Revenue Audit Case for under-declaration of VAT. A total of €54,098.41 had yet to be paid by the end of Decebmer.

Two medical staff agencies are on the list. Isamsawi Unlimited Company of 74 Castlegate Grove, Adamstown Castle, ,
Lucan, owed €44,622 after a Revenue Audit Case for under-declaration of PAYE/PRSI/USC.

Micdavids - Obioha Medical Services Ltd of 5 Bellgree Rise, Tyrrelstown owed €70,368 after a Revenue Audit Case for under-declaration of PAYE/PRSI/USC.

Another big debtor on the list is Industrial & Protective Coatings Ltd based at Unit 9, Ashbourne Business Centre, Co Meath. Specialising in marine coatings, the company had unpaid taxes of €271,337 and interest of €75,752. Penalties amounted to €79,235 leaving a total bill of €426,324 following a Revenue Audit Case Under-declaration of Corporation Tax and PAYE/PRSI/USC.

There are three farmers on the audit list. James Fennell of Burtontown House, Athy, CO. Kildare owed €83,965 for under-declaring Capital Acquisitions Tax. 

John Cunningham, of Kilmacoliver, Tullahought, Piltown, Co Kilkenny, had a bill for €49,676 for under-declaration of Income
Tax.

Patrick Timmins, Killanure House, Tullow, Co Carlow operates as a farmer / machinery supplier. He owed €40,008.82 for the under-declaration of Income Tax and VAT.

They are listed is on Part 2 of the list compiled pursuant to Section 1086 of the Taxes Consolidation Act, 1997. The total number of settlements published is 23. The total value of these settlements is €2.8 million. Where a taxpayer has failed to pay or failed to enter into an arrangement to pay the full amount of the settlement, the amount unpaid as at 30 September 2021 is indicated in the list.

The Revenue say Part 2 settlements are not published where the taxpayer has made a qualifying disclosure relating to undisclosed tax, as defined in Section 1077E (1) of the Taxes Consolidation Act 1997, where the settlement amount does not exceed the relevant threshold, currently €35,000, or where the amount of fine or other penalty does not exceed 15% of the amount of tax.

See FULL PART 2 LIST HERE. 

Revenue also publishes a Part 1 list which includes persons in whose case the Court has determined a penalty relating to a settlement, or has imposed a fine, imprisonment or other penalty in respect of a tax or duty offence.

The biggest penalty on this list was accrued by haulier Christopher Hughes, of Nart, Swan's Cross, Co. Monaghan. 

The Penalty Determination by the Courts relating to an under-declaration of VAT was €29,172.38. The penalty amount was €21,879.29

Also listed on Part 1 is Mark Aspland of 71 Westbourne Lodge, Templeogue, Dublin 16. The electrical surveyor received  a two years prison sentence suspended for three years arising from six charges relating to VAT returns.

Also on the list is John O'Sullivan of 38 The Grove, Hunter's Run, Clonee, Co Dublin. The company director was give an 18 months prison sentence that was suspended for 12 months for the fraudulent evasion of capital gains tax and delivering incorrect tax returns.

Revenue says the Part 1 list contains cases where penalties relating to under-declaration of tax or non-declaration of tax are determined by the Court, and where the tax, interest and penalty are more than €35,000, the penalty exceeds 15% of the total tax.

Fines totalling €153,229.29 were imposed in 69 cases. Other breaches related to the sale and smuggling of of tobacco, misuse of marked mineral oil.

There was one fine imposed for obstruction a tax officer. Nayla R Malachias Diana, a PAYE employee, of 67 Glebe Hollow, Stranorlar, Co Donegal was fined €1,250 for this offence.

See FULL PART 1 LIST HERE

Revenue say these published settlements reflect only a portion of all Revenue audits and investigations. 

In the 3-month period to December 31, 2021384 Revenue audit and investigations, together with 14,214 Risk Management Interventions (Aspect Queries and Profile Interviews), were settled, resulting in a yield of yield of just over €1.015 billion in tax, interest, and penalties. 

#EXPLAINER AND FURTHER INFO ON LATEST LIST

Part 1: Court Determinations

Court Determination of Penalty: Subject to certain criteria, in settlement cases where there is no agreement to a penalty, or a person fails to pay an agreed penalty, the Court determines the penalty. Details are published when the Court determined penalty exceeds 15% of the total tax and the total of the tax, interest and penalty is more than €35,000 and a qualifying disclosure has not been made: 

There was 1 such case in the 3-month period to 31 December 2021 with €21,879.29 being the Court determined penalty.

Court imposed fine, imprisonment or other penalty: Details are published when a fine or other Court penalty is imposed in respect of tax or duty offences. Court penalties may include imprisonment, partly suspended or suspended sentences, community service in lieu of imprisonment, and closure orders.

68 such cases are published and €131,350 is the total of court fines imposed.

These include:

  • 26 cases relating to failing to lodge tax returns, failing to remit VAT, failing to keep proper books and records, delivery of incorrect returns and fraudulent evasion of CGT. Court fines totalling €37,050, two 2-year sentences (both fully suspended on condition) and two 18-month sentences (both suspended for 12 months) were imposed; 
  • 19 cases of misuse of marked mineral oil in respect of which Court fines totalling €50,300 were imposed;
  • 22 cases of excise offences for tobacco smuggling, illegal selling of tobacco and possession of untaxed tobacco for sale.
  • Court fines totalling €42,750, one 5-month sentence, one 16-month sentence, one 18-month sentence (all fully suspended on condition) and 240.5 hours of community service, in lieu of imprisonment, were imposed; 
  • 1 case of obstruction of a Revenue officer, in respect of which Court fines totalling €1,250 were imposed.


Part 2: Settlements

Settlements are published when the extensive voluntary disclosure options are not availed of and the default arises because of careless or deliberate behaviour:

  • 23 cases are published today and €2.8 million is the total settlement amount in these cases; 
  • 8 cases were for amounts exceeding €100,000of which 1 exceeded €500,000 3 are cases in which the settlement was not fully paid as at 31 December 2021; 
  • €159,723.37 was the amount unpaid as at 31 December 2021. In some cases, collection/recovery of the full unpaid amount will not be possible (for example, company liquidation).

Background

Revenue says its compliance programme is carried out under the "Code of Practice for Revenue Audit and other Compliance Interventions" (the Code). The significant benefits of making a ‘qualifying disclosure’ are set out in the Code and include availing of reduced penalties, avoiding publication in the List of Tax Defaulters, and avoiding possible prosecution.

Publication

Revenue says it publishes the List of Tax Defaulters under the provisions of Section 1086 of the Taxes Consolidation Act, 1997, as amended. The list is published in two parts:

Part 1: Court Penalty Determinations and Court imposed fine, imprisonment or other penalty

Court penalty determinations are published where a taxpayer has not made a qualifying disclosure, the Court determined penalty exceeds 15% of the total tax, and the total of the tax, interest and penalty is more than €35,000.

All cases where a fine, imprisonment or other Court penalty is imposed by a Court, in respect of a tax or duty offence, are published.

Part 2: Accepted Settlements (and Settlements deemed to be agreed due to full payment)

Where a taxpayer has voluntarily furnished complete information relating to undisclosed tax liabilities and paid the tax and interest due (made a qualifying disclosure of tax defaults), settlements are not published.

Since 1 May 2017, significant changes and restrictions have come into effect where the case involves matters outside the Republic of Ireland, or 'offshore matters'. These changes limit the opportunity to make a 'qualifying disclosure' and coincide with increased international co-operation whereby Revenue gets more and more information automatically from other jurisdictions.

Legislation introduced in the Finance Act 2016 obliges Revenue to identify settlements where the person has failed to pay within the relevant period. 

Settlements are not published where the taxpayer has made a qualifying disclosure relating to undisclosed tax, as defined in Section 1077E (1) of the Taxes Consolidation Act 1997, where the settlement amount does not exceed the relevant threshold, currently €35,000, or where the amount of fine or other penalty does not exceed 15% of the amount of tax.

Calculation of Penalties

Where a qualifying disclosure has not been made, Revenu say penalties between 15% and 100% are applied, depending on the category of default and whether or not the taxpayer has cooperated fully with Revenue in the course of enquiries. The categories of default are Deliberate Behaviour or Careless Behaviour.

Deliberate Behaviour involves either a breach of a tax obligation with indicators consistent with intent on the part of the taxpayer or a breach that cannot be explained solely by carelessness
Careless Behaviour involves lack of due care, which results in the incorrect declaration of tax liabilities by a taxpayer, or which results in the making of incorrect repayment claims. The level of penalty may be further reduced having regard to the level of cooperation provided by the taxpayer once the default is uncovered. Full details of the level of penalties applicable to audit settlements are set out in Penalty Table 1 (Paragraph 5.6.2) of the Code.

Innocent errors and adjustments due to different interpretations of legislation

Penalties are not applicable where a tax default is not deliberate or is not attributable in any way to the failure by a taxpayer to take reasonable care to comply with his or her tax obligations. Neither is a penalty applicable where an adjustment to liability arises from differences in the interpretation or the application of legislation, and the taxpayer could reasonably have considered her/his interpretation to be correct.

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