Investigations and audits by the Revenue Commissioners yielded €572 million to the exchequer last year, according to the annual report of the Comptroller & Auditor General (C&AG).
The Revenue made over 460,000 different interventions with taxpayers, with an average payment of almost €84,500 coming from more than 3,000 cases where taxpayers were subject to a full audit and were found to owe more tax.
In total, almost 124,000 of the interventions by Revenue led to more tax being paid. Non-audit interventions – which include routing checks and queries – yielded €316 million with the remaining €256 million coming from full audits.
The study by the C&AG followed detailed examination of Revenue policy in this area in 2012, when a range of recommendations were made.Its latest report recommends that the Revenue should give a greater breakdown on compliance activity and report on the main reasons why settlement amounts are different from tax assessed.
Overall interest and penalties charged to taxpayers for overdue tax yielded 16 per cent of the total collected. Revenue’s Investigation and Prosecution Division, which investigates serious cases of suspected evasion, applied the highest rates, with interest and penalties of 40 per cent.
Delays
The C&AG examined a sample of 50 settlements made in 2018 which arose on foot of Revenue interventions, to check its processes and how it levies penalties. In some cases large amounts of cash were involved, with one case involving overdue PAYE involving a payment of €58.5 million, well below the initial Revenue assessment of €205 million.
The C&AG said that the reasons given for the difference between the estimate and settlement “appear reasonable”. In another case the Revenue had assessed that €113 million was due, but accepted an offer of €10 million having taken legal advice, partly due to long delays.
The C&AG found that in most cases the correct interest and penalties were applied, but found that interest was incorrectly applied in seven of 45 cases examined – generally involving minor errors. In terms of penalties, there was an error in one of 28 cases examined.
The report found that cases were open for an average of 285 days and said the length of time can jeopardise the strength of the Revenue case, generally due to the need to raise assessments in a specific timeframe.
