The former lord mayor of Dublin, Mr Michael Keating, received a demand for unpaid tax last August for over €1 million.
Mr Keating has been under investigation by the Criminal Assets Bureau for more than three years.
Mr Keating, who has an address in north Dublin, could not be contacted yesterday. But Garda sources confirmed that he was served with the tax assessment last August after prolonged investigations into his affairs. It is not clear yet if he has settled the tax demand.
However, it is understood he recently sold his house in Castleknock for a price thought to be about €1 million. It is believed he is now living in north Co Dublin.
It is also understood that CAB investigations into Mr Keating's affairs are continuing in respect of funds which gardaí believe to be held in South Africa and the Virgin Islands.
In 2000, Mr Keating was named in Middlesex Crown Court as a "partner in crime" in a £20 million sterling VAT fraud involving the export of non-existent computer parts from the UK. A Limerick man was jailed in August 2000 for eight years for his part in the fraud.
The UK authorities have been unable to obtain Mr Keating's extradition because revenue or "fiscal" offences are precluded from the extradition arrangements between the two countries. Mr Keating denies any involvement in the fraud. In August 2000 he said he had been "massively smeared" and that he was not afraid to travel to England to help police. He said there was nothing "improper or illegal involved on my part".
During the trial, prosecuting counsel said Mr Keating was involved with two companies centrally involved with the fraud based on the VAT-free status of goods exported from one EU country to another. Consignments of high-value computer chips and other components were bought in Britain and then paper work was manufactured to make it appear the goods were exported to a company in Ireland.
In October 1997, Mr Keating was arrested and questioned by gardaí. Information was then passed on the Criminal Assets Bureau.
When gardaí arrested Mr Keating he was carrying two bank drafts worth £48,000 made out to George Mitchell, a leading Dublin criminal. He said they were given to him by a business associate, Mr Peter Bolger.
Mr Bolger is the subject of separate extradition warrants for alleged VAT fraud in Britain. He too, is still living in Dublin.
Mr Keating was a former Fine Gael junior minister. He defected to the Progressive Democrats, becoming deputy leader of that party before leaving politics in 1989. However, he returned to Fine Gael and ran unsuccessfully as a candidate in Dublin South West in the 1992 general election. He did, however, win a council seat in the same year for Fine Gael in Dublin.
The fraud trial in which he was cited in Middlesex heard that several million pounds was transferred to offshore bank accounts in the Bahamas, Central America and Belize. A total of £19.5 million sterling was involved in the fraud between 1996 and 1998. The court heard that Mr Keating operated a firm called Irish Semi-Conductors that purported to buy computer chips from another company in Britain operated by the Limerick man, Daniel O'Connell, who was later jailed.