An internal audit carried out in National Irish Bank in 1994, which discovered that 40 per cent of non-resident account declarations were "missing or incomplete", was largely ignored by the bank's senior management, the report states.
It also says several letters urging compliance from top executives "mattered very little throughout the branch network, where deficiencies were widespread and uncorrected".
The report states the bank failed to tell the Revenue Commissioners about what the 1994 audit disclosed about non-resident accounts, even though it was in correspondence with the Revenue about "matters encompassed by the audit". The report adds that an audit committee attached to the NIB board "lacked effectiveness, influence and direction".
The report devotes a considerable amount of space to the 1994 Theme Audit, which solely focused on DIRT compliance. It involved visits to 12 branches where testing and sampling of accounts were undertaken.
It tested non-resident accounts and special savings accounts, which attracted a reduced rate of DIRT, but only if certain guidelines were adhered to. The report says the results of the audit were "dramatic".
"In general there was a lack of clear and concise guidelines on DIRT compliance issues and SSA notice requirements were not being clearly imposed".
An unacceptably high proportion of declarations were missing or incomplete - 40 per cent for non-resident accounts, 20 per cent for SSAs and 53 per cent for charity accounts.
The results of this audit "do not support" a claim from former NIB chief executive, Mr Jim Lacey, that there was not a "a significant problem" where DIRT compliance was concerned, the report states.
Another Theme Audit in 1998, which examined legislative compliance at the bank, found 18 per cent of sampled non-resident accounts were "erroneous" when tested against current legislative requirements.
Some 21 per cent of sample SSA accounts were in error against the same test. This prompted the bank to offer a settlement to the Revenue in 1998. However, it says when the bank calculated its liability to the Revenue, it did "not avail of the results of the 1994 Theme Audit" and a figure of £412,000 was determined.
Last night, a spokesman for the bank said it would not be issuing a detailed statement at this stage. However, he said NIB accepted there were "shortcomings in what we did at the time".
He said the bank had been through "a torrid time" over the last two years and had been spending a lot of "time and money" trying to put some of the practices highlighted behind it. "We welcome the report and the work of the committee and have no complaints. We will be approaching the report's recommendations in a positive frame of mind," he added.