Bank of Ireland has been accused of double standards when it comes to tax evasion by wealthy clients. Efforts made by the bank to ensure clients of its Jersey-based trust operation, facing investigation by the Revenue Commissioners, would have to pay only minimal penalties have drawn criticism from the action group representing bank customers who held bogus non-resident accounts.

Its spokesman, Mr Conor O'Mahony, last night accused the bank of being selective in telling certain customers about the possibility of an amnesty-type deal.

"Banks are making up the rules as they go along. Why didn't they give the same opportunity to all bogus non-resident account holders? Is this a strategic move by the bank to absolve themselves of any future difficulties?"

In a letter to its customers the Bank of Ireland Trust Company (Jersey) Limited said it had been informed that the Revenue Offshore Assets Group would set up an inquiry into trusts owned by Irish residents on June 1st, 2003.

The bank warned that it was "highly likely" it would be legally obliged to reveal the existence and details of these trusts to the Revenue once the investigation began.

The Revenue has had the power to demand information on Irish bank customers since 1999. It noted that the tax collection agency could also petition the courts in Jersey for these details.

"The Irish Revenue have informed the Bank of Ireland that significant benefits will accrue to owners of such trusts who make a qualifying voluntary disclosure of any undischarged tax liabilities before the investigation commences."

In an appendix, the bank details reduced penalties and other benefits customers can avail of if they indicate to the Revenue that they will settle their affairs before the inquiry begins.

"There are significant financial and other attractions for an individual with undisclosed tax liabilities to be regarded by the Irish Revenue as having made a qualifying voluntary disclosure."

The attractions include a reduction in penalties to 10 per cent of the additional tax in cases where the person is in "deliberate default". This reduces to 5 per cent in cases of "gross carelessness" and to 3 per cent of the additional tax where the Revenue regards the individual as having taken "insufficient care".

The Revenue told the bank that its customers must inform them that they will avail of these incentives no later than May 31st and make a full payment within 60 days.

The letter warns that if they fail to avail of this opportunity they will be obliged to pay the outstanding tax and interest, which is calculated on a monthly basis. The Revenue will also apply a significant penalty - which the bank suggests may be equal to the full amount of any taxes owned - and they will be named as a tax defaulter and could face criminal prosecution.

It cites a warning from the Revenue that anyone who failed to disclose funds held in these trusts and availed of the voluntary disclosure scheme for bogus non-resident accounts in November 2001 will not qualify for reduced interest and penalties.

The letter also added that, where the Revenue becomes aware of an individual's tax evasion either through its own investigations or through other public inquiries, this person cannot qualify for the voluntary disclosure inducements.