Wallace doubled money paid to himself and son even as financial troubles began to hit
TAX cheat Mick Wallace doubled the money paid to himself and his son by his building firm, even as it began to hit financial difficulties that left it unable to pay its full VAT bill.
Company records show M&J Wallace paid the TD and his son, the only directors, €290,000 for the year ended August 2008, when it made a €2.6m loss. Their pay was up from €148,141 a year earlier.
Mr Wallace is unlikely to face any sanction despite breaking the law by underpaying VAT, and being forced to agree to a €2.1m settlement with the Revenue Commissioners.
And he has said he would not resign his seat in the Dail, while admitting he will likely never repay the millions owed.
The official Dail watchdog probably cannot lay a finger on him either, because the settlement came before he was elected a TD for Wexford.
Mr Wallace insisted yesterday that he was fit to serve in the Dail despite admitting he knowingly under-declared VAT returns to tax chiefs in an attempt to save his failing construction firm M&J Wallace Ltd.
"I acknowledge what I did was wrong," he said. He then claimed he had acted in "good faith".
"I really did believe that I would be able to pay the VAT at a later stage."
The Independent TD attributed his company's problems to the economic crisis, which he said became too much for his business in 2008 and 2009.
He said it left the company unable to pay a €1.4m VAT bill and prompted him to file a false tax return in 2009.
But records show that M&J Wallace Ltd paid Mr Wallace and his son Sasha almost €290,000 for the year to the end of August 2008.
The massive increase in directors' payments from M&J Wallace is revealed in the last accounts filed, covering the year to the end of August 2008.
No breakdown of how the pair shared the payments is given, and the 'remuneration' isn't split into sections.
The payments were made before Mr Wallace's tax issues arose, but they came at a time when his company was clearly in decline.
When he revealed his tax problems yesterday, Mr Wallace admitted that things had begun to turn sour in 2007 and that he was forced to stop work on a project in July 2008.
He stressed that the situation was out of his "control" and insisted that while his behaviour was "wrong" he had been trying to save the jobs of his 60 staff. "I don't feel good about the fact that I owe Revenue that money but it was outside my control," the TD stressed.
Mr Wallace is not personally liable to make the payment to the Revenue. He said it was the company's debt, and as it is now insolvent, the bill may never be settled.
The Office for Director of Corporate Enforcement has the power to investigate and prosecute company directors but it would not say last night if it was investigating the TD.
But Mr Wallace is unlikely to face prosecution for the tax because Revenue has opted for a settlement. This means that prosecution has been parked in favour of coming to an agreement on the tax debt, even though he knew that he was making a false declaration, and despite his admission he is unlikely to be able to repay the money.
Mr Wallace is dealing with a series of financial problems and admitted his companies owe something to the tune of €40m.
ACC Bank secured a €19.4m judgment against MJ Wallace Ltd last November and a receiver was appointed over the company's assets. He says he has been threatened with bankruptcy a number of times but vowed to fight any such move.
A TD who is declared bankrupt is required by law to resign.