Monday 25 September 2017

Dole fraud pursued but not tax dodging

Fionnan Sheahan

Fionnan Sheahan

WELFARE fraudsters get sent to prison far more than tax cheats, a study by the Irish Independent shows.

Only six people have done time in prison in the past decade for tax dodging - despite an array of tax evasion scams being revealed.

But eight times that number, or 48 people, have received jail sentences for social welfare scamming since 1997.

The Labour Party has attacked the failure to prosecute more tax dodgers and wants to see them get the same hardline treatment as welfare fraudsters.

Figures for the past 10 years, compiled by this newspaper, show the system seems to be far tougher on fraudulent welfare claims than on tax dodging.


It emerged in recent weeks that the biggest tax evaders in the history of the State will not face any criminal prosecution.

Brothers Michael and Tom Bailey, the proprietors of the construction giant Bovale, made a settlement for ?22m - the largest tax settlement ever seen in the country. Yet the Revenue Commissioners said a prosecution was not tenable in the case.

The statistics show that a total of 12 years in prison time was served by 48 people since 1997 for welfare fraud. Meanwhile, three years and nine months in prison was completed by six tax dodgers.

So while tax dodgers get longer sentences, on average, prison sentences for tax offences are fewer. There were 3,183 prosecutions initiated for welfare fraud and 39 prosecutions for tax evasion. Nobody was jailed for tax dodging in six of the past 10 years.

Suspended sentences, community service and fines were imposed in numerous cases for both tax and welfare offences.

The taxman has taken in ?2.25bn from special investigations into scams including DIRT, NIB, Ansbacher, Pick Me Up Schemes, Offshore Accounts and Life Assurance Products. These tax scams involved over 32,000 cases.

The passage of time, the difficulty in collecting evidence, the likelihood of getting people to co-operate and the burden of proof are all seen by Revenue as serious barriers to taking prosecutions in tax evasion cases.

Revenue Commissioners chairman Frank Daly has defended the taxman's prosecution record, but expressed disappointment with some of the sentences which have been doled out in the courts after the amount of effort put into bringing the cases.


The fact that all the tax and substantial interest and penalties have been paid by the time the case goes to court tends to influence sentencing, he said.

Labour finance spokesperson Joan Burton says the system is sending out a message to some tax dodgers that it is worth taking the risk. Ms Burton said the multimillion euro tax settlements with no criminal case contrast starkly with those who defraud social welfare for smaller sums and are rightly prosecuted through the courts system.

She said the Department of Social Welfare seems to have a more proactive record of taking prosecutions than the Revenue Commissioners. "Although the Revenue Commissioners are taking a tougher line, it can be well worth taking a chance because the chance of being prosecuted is still so slim," she said.

Revenue argues that it is not fair to compare their rate of prosecutions for serious tax evasion with figures from the Department of Social Welfare. Revenue says it takes 1,000 prosecutions every year for less serious offences such as non-filing, and takes hundreds of prosecutions on the customs and excise side.

The number of prosecutions for social welfare fraud is still 10 times that of Revenue for serious cases. The social welfare cases still go through the courts," Ms Burton said.

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