Revenue targets Irish holders of US accounts

Technology and data analytics being used to ‘hone in’ on tax evasion, writes Samantha McCaughren

THE Revenue Commissioners has been contacting a number of people which it believes have failed to declare assets in America on foot of an information-sharing arrangement with the US Authorities.

Accounting sources said that letters had been received in recent weeks by clients in relation to deposits held in the US.

The Foreign Account Tax Compliance Act is an inter-governmental agreement to share financial account information with the United States.

It has been in place for some time, but sources said this is the first time accountants were aware of it being used to target undeclared accounts held by Irish individuals.

Revenue is taking an increasingly hard line on undeclared offshore assets.

Significant changes were introduced in the 2016 Finance Act.

Since May 2017, tax defaulters who use offshore facilities to hide undeclared income, accounts, or other assets can no longer make a qualifying disclosure.

A spokeswoman for Revenue said no details on the number of accounts uncovered were available as “records supplied or received under the Ireland-US treaty are subject to strict data confidentiality provisions”.

THE Revenue Commissioners are using data analytics to assess new information from the US tax authorities and elsewhere in the latest crackdown on offshore tax evasion.

Revenue said it is now “honing in” on data becoming available through a range of information-sharing agreements allowing it to identify potential accounts, structures or assets used to evade or avoid tax.

The new information is being cross-checked with social media accounts and previous tax returns to uncover any potential inconsistencies.

Sources told the Sunday Independent that the Revenue Commissioners have recently begun contacting a number of people who have failed to declare assets in America on foot of an information-sharing arrangement with the US Authorities.

The Foreign Account Tax Compliance Act (FATCA) is an inter-governmental agreement to share financial account information with the US and has led Revenue to identify an number of Irish accounts which it was previously unaware of.

A Revenue spokeswoman said: “Data analytics is key to this work, matching the new data against Revenue’s taxpayer records, and cross-checking against the taxpayer’s prior returns to determine whether all relevant income and assets have been fully and properly declared. The new data is also used in Revenue’s social network analysis and anomaly detection tools, to identify risky cases from a compliance standpoint.”

Significant changes were introduced in the 2016 Finance Act and since a voluntary disclosure deadline in May 2017, tax defaulters who use offshore facilities to hide undeclared income, accounts, or other assets can no longer make a qualifying disclosure.

Almost €84m was paid to Revenue as part of the voluntary disclosure regime ahead of the May 2017 deadline.

Since last May, defaulters face penalties of up to 100pc of the tax evaded, publication in the Quarterly List of Tax Defaulters and, potentially, criminal prosecution.

In November 2017, Revenue confirmed that a new inquiry is under way to identify and pursue taxpayers engaged in offshore tax evasion and avoidance.

“Against a background of closer co-operation between tax authorities worldwide, targeting those who seek to hide their profits or gains offshore, more information is becoming available to Revenue through the new information exchange mechanisms.”

“Revenue is writing to taxpayers by reference to a number of criteria, including information provided by the US under FATCA,” said the spokeswoman.

“As regards records supplied or received under the Ireland-US treaty, this information exchange is subject to strict data confidentiality provisions and as such, no further information is available,” she added.