The Standards in Public Office Commission has referred documentation on the taxation affairs of Limerick West TD, Mr Michael Collins, to the Director of Public Prosecutions for consideration.
He could face six months in prison and a fine if a court finds he made false tax declarations to the Commission.
Mr Collins resigned the Fianna Fáil whip in September following the revelation that he had paid €130,602 in taxes and penalties to the Revenue Commissioners between April and June this year. This payment relates to his involvement in a bogus non-resident account.
Mr Collins said at the time that he "deeply regretted" the affair, but insisted he had "complied at all times with the legal requirements which are laid down" by the Standards in Public Office Commission.
Under Section 21 of the Standards in Public Office Act, 2001, TDs are obliged to swear an oath within one month of a general election that their "tax affairs are in order and that nothing prevents the issue of a tax-clearance certificate".
They must then secure this tax clearance certificate from the Revenue within nine months of the election.
Mr Collins supplied his tax certificate to the Standards in Public Office Commission on June 14th, 2002, a month after the election.
The Commission said today it had taken legal advice on the TD's submission and decided it did not have the power under current legislation to investigate validity of the evidence of Mr Collins' tax compliance. It has therefore decided to refer the matter to the DPP. It will also notify the Committee on Members' Interests of Dáil Éireann of its concerns.
Under the 1938 Statutory Declarations Act, amended in 2001, Mr Collins could face a €2,500 fine and up to six months in jail if it is found that his declarations were false.
Mr Collins is also facing possible censure from the Fianna Fáil, and is now the subject of a party internal inquiry. Under Fianna Fáil rules, he could be asked to abdicate his Dáil seat by a two-thirds majority of the party's National Executive.
