Wallace may face action on €2m tax bill

Tax-evading TD Mick Wallace could face bankruptcy action over the €2.1m his company owes the State after admitting he acted illegally.

The Independent TD has insisted it is “very unlikely” his firm will honour its debts to the Revenue, and insists he will not resign despite deliberately breaking the law by knowingly under-declaring Vat.

However, the Revenue warned that failure to pay in such cases could ultimately lead to bankruptcy action against company directors — but such a move could take years.

Only bankruptcy or a six-month jail-term can force a TD from the Dáil, and a political storm erupted after it emerged Mr Wallace’s construction firm had made a €2.1m settlement with the Revenue after he lied about Vat amounts.

Mr Wallace, who claims he is personally tax-compliant, said he acted to try to save his floundering firm and intended to pay the money back later.

“Even though it was illegal, I thought it was the right thing to do... By filling in a false declaration, I was trying to save the company,” he said.

However, Mr Wallace refused to resign over the matter or accept personal responsibility for the debt, stating: “Mick Wallace has not broken any tax law, his company did.”

The Revenue settlement found that the firm MJ Wallace had under-declared its Vat liabilities of €1,418,894, accruing interest of €289,146 and penalties amounting to €425,668, creating a total of €2,133,708.

Revenue sources said failure to pay would trigger enforcement procedures such as liquidation.

Failure to repay such settlements to Revenue can trigger a criminal investigation in some circumstances.

Fine Gael chair Charlie Flanagan warned the matter raised “serious questions” about the suitability of Mr Wallace remaining on as a TD.

“It sets an alarming precedent when a member of the House admits to having knowingly filed an inaccurate Vat return,” he said as he called for a probe by the Standards in Public Office Commission.

A statement by nine members of the technical group of TDs said Mr Wallace had “done wrong and that he should be equally accountable as any other TD or ordinary Irish citizen”.

There were also calls for the Dáil’s standards committee to look into the matter.