THE REVENUE has announced a voluntary disclosure deadline of September 15th for tax evaders who hold "hot money" in deposit accounts.
Financial institutions must pass on to Revenue the names and addresses of people who had large amounts of money on deposit in 2005 and 2006 by September 15th. But before it receives this information, the Revenue is giving people with more than €100,000 of untaxed money in one or more deposit accounts a window in which to declare it.
Revenue officials yesterday described the new data from banks, building societies and post offices as "another piece in the jigsaw" in its pursuit of tax defaulters.
The data is likely to trigger a new wave of investigations into evasion, following on from its crackdown on owners of overseas property, offshore assets and its inquiry into single-premium insurance policies.
By making a voluntary disclosure, people who did not pay income, capital gains and capital acquisitions taxes due on lump sums held in deposit accounts can avail of "substantially mitigated" penalties for underpaid tax.
Their names and settlement amounts will not be published in the quarterly list of defaulters in Iris Oifigiúil, and the Revenue will not investigate them with a view to prosecution.
After September 15th, people who owe tax on sums of more than €100,000 will no longer have the option to make a voluntary disclosure, meaning they could face prosecution if they do not make a declaration.
"The shutters are coming down for those people," said Paul Walsh, the Revenue principal officer overseeing the scheme. Mr Walsh said he could not predict how many people would come forward, but it is likely to be fewer than the 15,000 people who made disclosures during its investigation into offshore assets and the 5,000 who made disclosures of untaxed money held in insurance policies.
Brian Keegan, director of taxation at the Institute of Chartered Accountants in Ireland, welcomed the scheme but said compliant taxpayers may unwittingly fall under the Revenue's radar.
"Tax evasion is unacceptable, and anything the Revenue does to counter it is a good thing. But we would caution that sometimes in these investigations, completely innocent people get caught up and have to persuade Revenue that they are legitimate and that can be counter-productive," he said.
Revenue officials met with representatives of the Irish Banking Federation yesterday to discuss the details of the automatic account reporting scheme.
Banks and other financial institutions are required to send on details of all accounts on which deposit interest retention tax (Dirt) of more than €635 was paid in 2005 and 2006 by the September deadline under regulations introduced earlier this month.
Based on average interest rates in 2005 and 2006, the Revenue estimates that it will receive details of accounts where more than €20,000 was held on deposit.
Mr Walsh said the Revenue is encouraging banks to inform customers that their personal data will be passed on to the State.
"They're under no obligation to notify their customers, but we think it would be helpful if they did."
The Revenue will receive account information relating to interest paid in 2007 on October 31st, 2008, and it will collect account details from credit unions for the first time next year.
It plans to extend the automatic reporting scheme to insurance and investment companies so that tax evaders are left with nowhere to hide undisclosed income.
To prevent savers from splitting their money between accounts so that their details will not be reported, financial institutions will have to report the names and addresses of all holders of deposit accounts in the year in which they were opened, regardless of how much interest is earned.
