ACCBank is expected strongly to contest suggestions that it has a potential £17 million liability to the Revenue Commissioners for unpaid DIRT on bogus non-resident accounts.

The State-owned bank yesterday refused to comment on the level of its liability as estimated in the report of the Comptroller and Auditor General but sources close to the bank have indicated it will vehemently refute this estimate.

The bank is understood to dispute the basis on which the estimate was reached.

ACC recently paid the Revenue £1.349 million in a voluntary interim payment pending a full Revenue audit going back to the introduction of DIRT in 1986. The estimate in the CAG's report is based on the findings of an external audit of a small number of ACC branches in 1992. It examined accounts with deposits totalling £84 million and found that £26.3 million was in deposits with no non-residency declarations or questionable non-residency declarations.

In his report, the CAG says the audit assumed that the situation discovered in the branches reviewed was representative of the network as a whole, concluding that ACC's potential liability could be in the order of £17 million.

The bank, along with its competitors, is expected to be called before the Public Accounts Committee next month, to answer questions raised in the report. ACC is expected to tell the PAC that the £17 million estimate is grossly inaccurate.

AIB would not comment yesterday on the findings of the report. A spokeswoman said the bank was still reading the document and would not be making any comment ahead of the reconvening of the PAC next Thursday.

Bank of Ireland pointed out that its potential £1 million liability identified in the report represents 0.17 of a percentage point of its total DIRT payment of £590 million to the Revenue in 1986.

A spokesman said the bank had always sought to comply fully with the spirit and letter of the law in regard to DIRT and had been concerned about the issue of bogus non-resident accounts before the introduction of the tax in 1986.

The bank said it wanted to see the position in relation to non-resident accounts regularised at that stage because it was losing market share by complying with the legislation.

Meanwhile, the Revenue would not discuss details of the report. It does have widescale powers and is expected to use them to investigate bogus accounts held at financial institutions. The Revenue has the power to get access to individual bank accounts and can also check DIRT declarations.

The full text of the Comptroller and Auditor General's report can be accessed through The Irish Times on the web (www.irishtimes.com).