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25 Sept 2022

Who didn't pay their taxes? Laois car dealers top Revenue's hit list with multi-million euro bills

Revenue Commissioners €3.5 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

Defunct car dealers in Graiguecullen have left behind two tax bills that exceed €10 million, according to the latest Revenue Commissioner's latest tax default list which also includes a builder and farmer from Offaly.

They are just some of the latest individuals and companies on the new Tax Defaulter list published by the Revenue Commissioners.

The new Revenue's published List of Tax Defaulters covers the period from 1 April 2022 to 30 June 2022. During the same three months nearly 14,000 investigations resulted in more than €3.540 billion in tax, interest, and penalties who chose not to their way due to.

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 "careless or deliberate behaviour".

Top of that list are two related car dealerships that traded in Laois near the Carlow town. Both are now in liquidation. Both had addresses on the Sleaty Road which has Carlow address but were located in the Laois border town Graiguecullen.

Meridian Motors Limited, is described by Revenue as a motor vehicle dealer that traded as the Carlow Motor Company but is now in liquidation. A Revenue audit case for under-declaration of PAYE/PRSI/USC and VAT revealed an unpaid sum of €2,276,667. Interest amounted to €1,330,544. Penalties were calculated at €2,241,723. The total owed is €5,848,934 of which €122,411 had been paid by June 30,2022.

Meridian Motors 2014 Limited is also on the list. Described as a motor vehicle dealer it's also in liquidation. A Revenue audit case for under-declaration of PAYE/PRSI/USC and VAT revealed a sum owed of €1,926,340. Interest ran to €1,036,525 while the penalties amounted to €1,922,096. This revealed a total of €4,884,961 owed to the State of which €56,913 had been paid by June 30, 2022.

The fuel trader is on Part 2 of the list compiled pursuant to Section 1086 of the Taxes Consolidation Act, 1997. A total of 12 cases were published with with the total value of these settlements €12.5m for April, May and June.

Also on the list were builder and farmer in Offaly. Retired builder Sean Doughan with an address at Monegall, Birr, Co Offaly reached a total settlement of €210,362 with Revenue. The settlement is made up of €62,770 in tax, €104,795 in interest and €42,797 in penalties. The settlement was made as a result of a Revenue Investigation Case into non-declaration of Income Tax. 

John Mooney, a farmer with an address at Kilmaine, Fortal, Birr reached a settlement of €169,955 with Revenue. It came as a result of a Revenue Audit Case into under-declaration of VAT. The settlement is made up of €84,269 in tax, €60,405 in interest and €25,281 in penalties.

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 June 2022 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.

Details are published when the Court determined penalty exceeds 15% of the total tax (where the total amount of tax only exceeds €50,000) and a qualifying disclosure has not been made:

The biggest penalty was incurred by company director / landlord Clement Kenny, The Residence, NO. 3 Crane Lane, Dublin 2. He incurred a penalty of €25,765 following a determination by the Courts relating to a non-declaration of Capital Gains Tax in the amount of €6,033 (incl. surcharge €287) and an under-declaration of Income Tax in the amount of €84,389 (incl. surcharge of €4,252).

See FULL PART 1 LIST HERE

These published settlements reflect only a portion of all Revenue audits and investigations. In the 3-month period to 30 June 2022 a total of 287 Revenue audit and investigations, together with 13,983 Risk Management Interventions (Aspect Queries and Profile Interviews), were settled, resulting in a yield of €3.540 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 (where the total amount of tax only exceeds €50,000) and a qualifying disclosure has not been made:

There were 2 such cases in the 3-month period to 30 June 2022 with €41,682 being the total amount of the Court determined penalties.

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.

67 such cases are published and €153,300 is the total amount of the court fines imposed these include:

  • 16 cases of failure to file a tax return, delivering an incorrect tax return and failure to produce books and records. Court fines totalling €32,300 and 30 minutes of community service in lieu of imprisonment, 240 hours of community service in lieu of 1 years imprisonment, one 2-year sentence and one 1-year sentence (both fully suspended) were imposed;
  • 22 cases of misuse of marked mineral oil and 2 cases of oil laundering, in respect of which Court fines totalling €58,000, one 3-year sentence and one 2-year sentence (both with 18 months suspended) were imposed;
  • 18 cases of excise offences for tobacco smuggling, illegal selling of tobacco and possession of untaxed tobacco for sale. Court fines totalling €43,000 and one 18-month sentence were imposed;
  • 2 cases of possession of untaxed alcohol for sale, in respect of which Court fines totalling €5,000 were imposed;
  • 1 case of failing to keep a vehicle stationary, in respect of which a Court fine totalling €1,250 was imposed;
  • 5 cases of obstruction of a Revenue Officer, in respect of which Court fines totalling €11,250 were imposed;
  • 1 case of giving false or misleading information, in respect of which a Court fine totalling €2,500 was imposed.

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: 

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:

  • 12 cases are published today and €12.5m is the total settlement amount in these cases. 
  • 10 cases were for amounts exceeding €100,000 of which 2 exceeded €1 million
  • 3 are cases in which the settlement was not fully paid as at 30 June 2022.  
  • €10,721,226 was the amount unpaid as at 30 June 2022.

Revenue says vigorously pursues collection/enforcement of unpaid settlements. In some cases, collection/recovery of the full unpaid amount will not be possible (e.g. 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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