Today’s edition of Iris Oifigiúil contains details of published settlements completed by Revenue. It also contains details of penalty determinations made by the courts in respect of taxpayers who have deliberately or carelessly made incorrect returns in the period 1 January 2012 to 31 March 2012.

The list is published in two parts:

Part 1 lists every person upon whom a fine or other penalty was imposed by a court. This includes the following categories:

• Failure to file a return
• Filing an incorrect return
• Illegal selling of tobacco
• Cigarette smuggling
• Various excise and licensing offences.

Part 11 lists:

• every person in whose case the Revenue Commissioners accepted a specified sum in excess of €12,700/€30,000/€33,000 (depending on the periods in which the liabilities arise) in respect of any additional liability due for tax, interest and penalties arising from a settlement, instead of instituting proceedings for the recovery of the penalties, and the amount of penalty included in the settlement exceeded 15% of the tax and
• every person in the case of whom a penalty was determined by a court during the period 1 January 2012 to 31 March 2012. Penalty determinations are published in this list only where the penalty determined by a court exceeds 15% of the tax by reference to which the penalty determination has been made and where the aggregate of the tax, the interest due on that tax and the penalty determined exceeds €30,000.

Unpaid amounts are subject to normal collection and debt recovery procedures.

Making a Qualifying Disclosure of Tax Defaults and avoiding Publication in the List of Tax Defaulters

Where a taxpayer has, in advance of any Revenue Enquiry, voluntarily furnished complete information relating to undisclosed tax liabilities, and paid the tax and interest due, (made a qualifying disclosure of tax defaults), settlements or penalty determinations are not published. A qualifying disclosure may be made at the start of a Revenue Audit and publication will be avoided.

Calculation of Penalties

Penalties, where applied in settlements, are calculated by reference to the appropriate category of default. The categories of default are Deliberate Behaviour or Careless Behaviour. The level of penalty may be further reduced having regard to the level of cooperation provided by the taxpayer once the default is uncovered.

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.

Full details of the level of penalties chargeable in audit settlements are set out in Penalty Table 1 of the Code of Practice for Revenue Audit.

In situations where a qualifying disclosure of tax defaults, as provided for in legislation, has not been made by a taxpayer, penalties levied range between 15% and 100% depending on the category of default and whether or not the taxpayer has cooperated with Revenue in the course of enquiries.

Innocent errors and adjustments due to different interpretations of legislation

Penalties are not charged where a tax default was not deliberate, or was 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 charged 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.

Settlements Published

In the 3-month period to 31 March 2012, 129 taxpayers fall to be published. The settlements, or determinations, in these cases total €29.60 million.

Of the 129 published cases, 62 were for amounts exceeding €100,000; of which 13 exceeded €500,000 and 5 of that 6 exceeded €1,000,000.

Of the 129 cases:

• 4 settlement totalling €0.51 million relates to a Bogus Non-Resident Account holder
• 14 settlements totalling €6.73 million relate to Revenue investigations into Offshore Funds, and
• 7 settlements totalling €0.83 million relate to Revenue’s Single Premium Insurance Products Investigation Cases.

The published settlements reflect a portion only of all Revenue audits and investigations concluded in the 3-month period to 31 March 2012. Settlements are only published when the extensive voluntary disclosure options are not availed of and the default is as a result of careless or deliberate behaviour. A total of 2,369 Revenue audit and investigations together with 5,142 other compliance interventions (aspect queries & profile interviews) were settled in the period 1 January 2012 to 31 March 2012 resulting in yield of €130.27 million.

* The total figure includes tax, interest and penalties

Defaulters Lists

[Ends 12/06/12]