Revenue will use property tax data to catch income cheats
Taxpayers who own more than one home are to be targeted
THE Revenue Commissioners are to mount a New Year trawl of property tax records to catch homeowners who are under-declaring their income.
The new operation will effectively target those who own more than one house and will cross-reference their property details against their tax returns or social welfare payments.
The information gathered on the owners of the 1.6 million houses covered by the property tax is now to be analysed by the Revenue's main computer system to identify those most likely to be evading tax.
The 'high-risk' cases will be identified by the system and Revenue officials will then carry out an audit to ensure that they are not under-paying their tax.
The move is part of Revenue's continued crackdown on tax cheats.
The checks will cover PAYE taxpayers, the self-employed and those who are on social welfare payments, such as the dole and the state pension.
Around 160,000 people – or 10pc of those who have paid the property tax – own four homes or more.
It comes just 10 days before the final deadline for householders to file their property tax return for next year – when they will have to pay a full year's worth of property tax for the first time.
Until now, Revenue's priority has been to get as many people as possible to pay the property tax in its first
half-year of operation. And the only people warned that they faced the prospect of a Revenue tax audit were the estimated 159,000 homeowners who have not paid the property tax so far.
But Revenue has signalled for the first time that it is going to add in property-tax data from all householders into its Risk Evaluation Analysis and Profiling (REAP) computer system in the New Year.
"Our priority this year has been to establish the tax and secure the yield for the Exchequer. We will be adding property ownership data to the REAP system early in 2014," a spokesperson said.
Revenue said its auditors could already use the property tax database on a "case-by-case basis".
But it will automatically be given lists of high-risk cases to investigate when the property tax details are fed into the REAP computer system in the New Year.
Tax experts had warned that getting the Revenue to collect the property tax could give them the ability to quickly identify discrepancies in some taxpayers' accounts.
And Finance Minister Michael Noonan had recently flagged up the Revenue's intentions when he said that the property tax data would be analysed "to identify property ownership patterns which may be further indicators of risk".
It is the first time that the Revenue has confirmed that it is going to start using the property-tax database as a tool to crack down on tax evasion.
It has confirmed that REAP has access to details of people's social welfare payments – such as the dole and the state pension – as well as to the tax returns from PAYE workers and self-employed workers.
In some cases, people own multiple houses as a result of family inheritances.
REAP will be able to quickly eliminate these cases because it has access to all voluntary transfers in the country through the Revenue's operation of the stamp duty system.
It can also see in many cases if people have taken out mortgages to fund their house purchases because Revenue gives tax relief on mortgage payments to many homeowners.
But Revenue has been at the centre of controversy over its insistence that people must pay next year's property tax before Christmas if they are using credit or debit cards.
Despite a backlash from government backbenchers, it has insisted that people can use other payment options – such as direct debits or deduction from wages – to pay the tax in 2014.
There were also widespread complaints that Revenue letters on paying the 2014 property tax were confusing and hard to understand.
Around 5,000 people per day were calling the property tax helpline with queries – and had to wait up to 20 minutes before having their calls answered.
The Revenue has now confirmed that it is going to get expert advice on writing next year's property tax letters in plain English from the National Adult Literacy Agency.
By Michael Brennan Deputy Political Editor