Revenue chairman warns many will feel pain as tax investigations hittargets, writes Siobhán Creaton

Revenue chairman Mr Frank Daly has pledged that the State's tax collection agency will "stick like limpets" to the Ansbacher and other investigations, and promised that many individuals would "feel pain".

At the presentation of the Revenue's annual report yesterday, Mr Daly stressed the body's intention to pursue vigorously taxes owed to the State and to seek prosecutions where it could. In particular he sent a stern warning to individuals who used bogus non-resident accounts in the 1980s and 1990s to evade tax to come forward now and face the music.

Close to 200 of the Revenue's 850 staff are involved in three major investigations concerning bogus non-resident accounts, Ansbacher and the CMI unauthorised investment scheme sold by National Irish Bank to its customers.

Most of the resources are targeted at the bogus non-resident accounts, with more than 100 staff in the various tax districts working on the investigation. The Revenue is systematically working through the information it has gathered on customers while auditing the State's financial institutions to identify those who have failed to regularise their affairs.

Banks and building societies have also been complying with High Court orders requesting additional information on holders of non-resident accounts. The initial trawl has identified 1,800 account-holders who are now being asked to explain the source of these funds and help the Revenue to determine whether there are any outstanding tax liabilities. Further High Court orders are being prepared that will prise additional information from 15 financial institutions, with Mr Daly indicating there may be many more individuals who will come onto the Revenue's radar in the months ahead.

Some may have already declared these accounts in the previous tax amnesties and, as Mr Daly has pointed out, some may even have been genuine non-residents when they opened those accounts. The Revenue has already come across a good number of cases where account-holders availed of the previous tax amnesties but did not declare the accounts. These individuals have most to fear. Apart from punitive fines and penalties, they may face prosecution and ultimately be handed a jail sentence.

In urging these tax-evaders to come forward, Mr Daly said that, while they would not benefit from reduced penalties and the anonymity offered under the voluntary disclosure scheme, they would limit the interest payments on any settlement.

"The clock stops ticking on the interest once the taxpayer comes forward," he stated, noting that interest is applied at a rate of 1 per cent per month.

The Ansbacher investigation has been particularly complex and difficult for the Revenue as it received virtually no co-operation from any of the individuals involved.

Mr Daly admitted that it would be very difficult to secure prosecutions for the participants in this tax-evasion scheme but suggested the interest and penalties that would ensue would be substantial.

He pointed to the CMI investigation, which centres on customers of National Irish Bank, as an example of the determination and thoroughness the Revenue intended to apply to Ansbacher. "Maybe people on the Ansbacher list should be concerned and should regard that as the way the Revenue is going to stick with this investigation."

The chairman said it was regrettable that none of these investigations had been triggered by the Revenue's own inquiries, blaming the limited powers it had in the past for this failing. "We would have preferred if they had been detected by Revenue. We were limited by our powers in making these inquiries but would be better placed to identify them in the future. A great many came to light but we got on the ball very quickly and are sticking with them."