Taxman hunt for teachers' 'grinds' cash
Revenue Commissioners warn tax must be paid on 'under-the-counter' extra payments
The taxman is on the lookout for the multi-million euro 'out of hours' grinds money earned by some of the country's teachers.
As part of an ongoing crackdown on the 'shadow economy', Revenue Commissioners have warned they are chasing any 'under-the-counter' extra cash, earned by PAYE workers, including teachers.
The message includes a warning all payments received for after-school grinds are "taxable in full."
The annual exam season has again focused attention on the increasing amounts of cash spent by parents desperate to nudge up their children's Leaving Cert grades.
Apart from the standard one-to-one tuition arranged in a private house, there has also been a dramatic increase in special grind schools in various parts of the country.
Here, highly-motivated teachers can top up their salary from the day job by giving grinds on the side in their chosen subjects.
Teachers receiving this kind of additional income must declare the amount on either a special Form 11 or 12, according to the Revenue. The tax authorities stressed "it is Revenue's standard practice to constantly monitor" different earning sections of the workforce.
"Revenue identifies, profiles and targets cases for intervention, based on risk. Compliance resources are directed to tackle the riskiest cases. The tools and techniques at our disposal to tackle non-compliance range from light-touch early intervention to criminal prosecution, for serious tax and customs fraud.
"The compliance behaviour of the taxpayer determines the nature, extent and consequences of Revenue intervention."
Revenue interacts with more Irish citizens than any other State body, and so has access to an unparalleled amount of citizens' data.
Part of its armoury is to monitor credit and debit cards to help determine if their owners are avoiding tax.
The data is among key indicators used to gauge whether a person is living beyond their disclosed means - a sign they may not be declaring all of their taxable income.
It also has a highly sophisticated system called Reap (risk evaluation, analysis and profiling) which cross-references a variety of sources to track unusual activity.
It relies on 'data analysis' to catch tax dodgers in several different ways. This information is then fed into its Reap system, which enables Revenue to accurately predict whether someone is potentially evading tax.
If caught, the person risks being landed with a significant back tax bill, which will include a cumulative rate of interest.
In 2013, Revenue recouped more than €82m from the Shadow Economy Project, a special probe which looked at several industries, ranging from building firms to scrap metal merchants, landlords and teachers. Revenue also collaborates with the Department of Social Protection and the Workplace Relations Commission (WRC) to identify tax evaders.
However, some experts point out that the essentially private nature of the traditional "one and one" teacher pupil grind means this area of the black economy is extremely difficult to monitor or detect by the tax authorities.
However, the option of tracking any unexplained bank deposits, or credit card transactions, is still open to the taxman.
The push for higher Leaving Cert points has intensified in recent years and has led to a huge black economy grinds industry. Both students and parents are willing to pay for private tuition from a teacher with a proven reputation so as to gain an "edge" in a particular subject.
Grinds are also used to compensate for a low-performing teacher. In some cases a group of teachers may join together to provide a comprehensive tuition package.