A Dublin landlord who failed to declare his rental income has been hit with a 100 per cent penalty charge of more than €1 million.
The Revenue told the High Court that Paul Howard, of Larkfield Avenue, Harold’s Cross, Dublin 6W, was deliberately in default on his taxes and was due “no reduction for co-operation” once the Revenue began to investigate his affairs.
The unusually severe penalty was approved on Monday by Ms Justice Miriam O’Regan on the application of Shelley Horan, for the Revenue, with no objection from Mr Howard.
Tax defaulters are often hit with bills comprising tax unpaid, interest on the unpaid tax, and an additional penalty that reflects the nature of the noncompliance and the level of co-operation the Revenue received.
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Mr Howard, and his partner, Una McClean, of Larkfield Avenue, Harold’s Cross, Dublin, built up a property portfolio in mostly north inner city Dublin during the boom years, were involved in property development in Turkey and ran a launderette, Clean City, on Talbot Street.
The investigation into Mr Howard’s affairs began in 2009 when an email was sent to the Revenue’s “Good Citizen” evasion reporting system, leading to the discovery that the couple kept huge amounts of cash at home rather than lodging it to bank accounts.
The Revenue investigation involved notices to financial institutions seeking information about bank accounts associated with the couple. They appealed the tax assessments to the Tax Appeals Commission but were not successful.
The decision against Mr Howard by the Tax Appeals Commission in August 2021 noted he had an estimated gross income of €2.38 million during the 12 years to 2014, but had declared an income of €409,725.
“There was no evidence that any of the derived income from the rental property was lodged into any bank account,” the commission said.
The claims in the email to the Good Citizen system were accepted by Mr Howard at the hearing.
“The rent payments are made by two methods,” the email said. “The tenants leave the collective rent in an envelope in their respective apartments in the kitchen and Mr Howard lets himself in at the start of each month and personally picks it up, usually when the tenants are not present.
“The second method, which some tenants use, is to go directly to Mr Howard’s business, Clean City on Talbot Street, on the first of every month and hand the rent in directly to the employee at the counter.”
Mr Howard had a tax judgment of €1.2 million confirmed against him and interest of €1.1 million, while Ms McClean had a tax judgment of more than €300,000 made against her, and interest of almost €300,000.
The collection of the tax and interest has been delayed because of a claim by the couple that an arrangement by which taxes are collected for the Collector General using the services of law firm Ivor Fitzpatrick & Co is a “champertous agreement”, or an agreement whereby a third party gives assistance in litigation to which it is not a party, in return for a share of any proceeds, and as such illegal. Having failed in their case in the High Court, the couple appealed to the Court of Appeal, where a judgment is being awaited.
The couple’s property portfolio included apartments in Mountjoy Square, buildings on Talbot Street and a house at Larkfield Park, Harold’s Cross, Dublin 6. Property worth more than €1.5 million was sold between 2018 and 2021 by the couple, the commission was told, with Ms Horan telling the commission the challenge to the tax assessments was part of a “ploy”, while the couple sold off property.
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