Random Revenue audits find over one-third of people and businesses underpaid taxes
Published 01/10/2016 | 02:30
Over a third of Irish workers and businesses randomly audited by the Revenue Commissioners were found to be underpaying their taxes.
A report by the State spending watchdog found some 39pc of taxpayers audited by the Revenue between 2008 and 2015 were found to have underpaid.
The average owed was €18,500 in unpaid tax, interest and penalties, according to the report by the Comptroller & Auditor General, Seamus McCarthy.
In a statement following the publication of the report, the Revenue said it conducts audits on 400 taxpayers randomly selected from the live register each year.
Those audited include both self-assessed individuals and companies.
Of 270 random audits finalised in 2015, 170 people or companies were given a clean bill of health.
However, in 50 of the finalised cases up to €2,000 was owed. Five randomly selected individuals or companies were found to owe over €50,000.
Seven individuals or companies owed between €20,000 and €50,000.
The random audits are only a small part the Revenue's work, but its results indicate a consistent level of tax underpayment by self assessed taxpayers and companies.
The Revenue said its main focus was not on assessments picked randomly, but on targeted audits launched as a result of "various risk indicators and other information available".
Meanwhile, the report showed the number of serious tax evasion cases under investigation has more than doubled in the past six years.
Some 107 cases are being probed by the Revenue's Investigation and Prosecution Division compared to just 50 in 2010. A further 15 cases are currently before the courts.
One individual being sought for trial is currently at large and subject to an arrest warrant.
The report said it can take several years before a case is presented in court.
Convictions for serious tax or customs and excise evasion have been relatively consistent over the past three years, with 28 convictions in 2015, 27 in 2014, and 35 in 2013.
Mr McCarthy noted the Revenue did not produce estimates of the "audit gap", a measurement of revenue losses in a tax year as a result of non-compliance by individuals and businesses.
He recommended this be calculated annually.
"This would be useful to allow Revenue to better assess and report on its effectiveness in managing taxpayer compliance," he said.
Meanwhile, 17 companies were found to have over-claimed €8.4m between then in research and development tax breaks.
Revenue found cases where non-qualifying expenditure was claimed, expenses were over-claimed and insufficient supporting documentation was used to make claims.