Cowen urged to target tax dodge advisers

BRIAN COWEN was strongly urged yesterday to tighten up the law to allow prosecutions of bank officials and financial advisers who advise customers to open accounts aimed at evading tax

But any changes to legislation by the Finance Minister will not affect past cases of bogus and non-resident accounts.

Revenue Commissioners chairman Frank Daly told the Dáil Public Accounts Committee that at the moment it is virtually impossible to prosecute someone for aiding and abetting in tax evasion.

Under present law, the tax advisor, bank official or accountant concerned would have to be virtually standing the shoulder of the customer making a faulty tax return. On top of that, Mr Daly said Revenue had not found a single person to date willing to go to court to testify against an individual responsible for setting up a bogus accounts.

Mr Cowen will be asked by Mr Daly in the coming weeks to change the law in the Finance Bill to introduce a simple charge against anyone who takes steps to facilitate the fraudulent evasion on tax.

But the change will not be retrospective, he said.

“Until the law is changed, any tax adviser knows they can involve themselves in tax evasion schemes with zero possibility of prosecution,” he said.

Also yesterday, Mr Daly revealed that AIB is not facing any action over the use of an offshore investment vehicle, called Faldor, by a number of executives.

While Revenue does not have any tax issues with the bank itself, some of the directors involved do face a tax bill arising from their involvement, Mr Daly said.

The bank discovered that in the early 1990s a number of senior AIB executives had an investment account with AIB Investment Managers by way of a British Virgin Islands company called Faldor.

Meanwhile, the noose is tightening in the investigation into Ansbacher account cases, according to Mr Daly. The High Court granted an order last Monday requiring an Irish-based bank to provide information and documentation relating to the transaction on an account held in Dublin of a Channel Islands based subsidiary.

The High Court order covers the period between 1991 and 1996 and also requires information on certain other accounts.

“This material will enable Revenue to advance its investigations into certain Ansbacher cases and to begin the second phase of its offshore account project,” Mr Daly said.