Revenue Investigations - Information Powers Revised and Updated
The Revenue Commissioners have published an e-Brief setting out up-to-date guidance and instructions for their authorised officers when using Revenue Information Powers. This is to ensure that these powers are used appropriately.1
Revenue Officers are entitled to raise queries concerning information submitted to them, however the e-brief deals with the additional powers of request Officers may exercise where they are unsatisfied with the information provided and are requesting additional information. Additionally Officers may make a request where no information has been received and there are grounds to suspect more serious evasion or fraud.
The powers are derived from the Taxes Consolidation Act 1997.2 They set out the requests the Revenue Commissioners may make and the orders they may seek when investigating the liability of a taxpayer. This includes requests for books, records and accounts and explanations relating to this information. These requests can be issued to a taxpayer, as well as to financial institutions or third parties connected with that taxpayer. There is protection for information covered by legal professional privilege and certain confidential information.
Requests to the taxpayer
A request to a taxpayer must outline the reasons why the information is requested and give a reasonable time for production. The Revenue Commissioners can make copies or take extracts from materials where reasonably necessary. It is an offence not to comply or to wilfully falsify/conceal the information produced and in processing the information the Revenue Commissioners may request the taxpayer’s assistance where reasonably necessary. The penalty for non-compliance is a maximum of €4,000.
Where serious evasion or fraud is suspected the Revenue Commissioners can also apply to the High Court for an order compelling the production of the particular information and/or explanation. The taxpayer can also be ordered to answer, explain or provide further information relating to any liability specified in the court application.
Where an individual is required to make a tax return, the relevant Inspector may require that person to deliver a statement of affairs in a prescribed form or may require a spouse/partner to deliver a statement of all assets and liabilities held at that date. The form must show the location, value, cost, description, date of acquisition and insurance details of the assets and it must also provide the details of assets provided for minor children. The inspector may also request additional information be provided explaining or verifying the information provided in the form. The taxpayer must be permitted no less than 30 days to comply with the request. There are penalties for non compliance.
Requests to Financial Institutions
There are a number of methods by which information can be obtained by the Revenue Commissioners from a financial institution in relation to the liability of a taxpayer. “Taxpayer” includes a person whose identity is not known, companies which have been dissolved or individuals who have died. There must be reasonable grounds to believe the institution has the relevant information.
The Revenue Commissioners may request a financial institution, which it believes has books/records/accounts concerning a taxpayer, to produce this information and to furnish any such particulars or explanations which the Revenue Commissioners may reasonably require.
The term “financial institution” includes all deposit-taking and credit institutions including banks, building societies and credit unions. The information requested may relate to a “connected person” to the taxpayer. A copy of the request must be issued to the taxpayer concerned. There will be a penalty for financial institutions which fail to comply with a notice under this section and this penalty will increase for each day of non-compliance.
Where there are reasonable grounds to believe that a taxpayer may have failed or may fail to comply with tax obligations and that failure is likely to lead to a prejudice to the proper assessment of tax, a Revenue Officer may apply to the Tax Appeals Commission seeking consent to serve a notice on a financial institution seeking information relevant to the liability of the taxpayer.
Where there are reasonable grounds to suspect there has been more serious evasion or fraud by a taxpayer, the Revenue Commissioners may also apply to the High Court for an order that information on that taxpayer or connected person be provided by a financial institution. In this instance, the High Court can also make a non-disclosure order prohibiting the financial institution from notifying the taxpayer of the application. This is to address situations where there are reasonable grounds to believe that disclosure would seriously prejudice the fair assessment of liability. The court can also make a freezing order over the account of a taxpayer with the financial institution.
Requests to Third Parties
The Revenue Commissioners may also issue a request to a third party to produce books, records or accounts relating to the liability of a taxpayer. The taxpayer must be notified when the request is issued. The third party has a 30 day period in which to comply and non-compliance can result in a penalty of €4,000. The consent of the Tax Appeals Commission to service of the notice can also be sought. Where there are grounds to suspect serious tax evasion the Revenue Commissioners may apply to the High Court for an order requiring a third party to produce information and/or explanations regarding the tax liability of a taxpayer.
- [1] Revenue E-Brief 83/17 published on 28 September 2017.
- [2] Sections 900 – 909.
This document has been prepared by McCann FitzGerald LLP for general guidance only and should not be regarded as a substitute for professional advice. Such advice should always be taken before acting on any of the matters discussed.
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