Elite syndicate in Revenue deal for 'aggressive' tax avoidance
Settlement means investors' names will not be published
More than 60 high-net-worth individuals (HNWIs), including senior barristers and partners in legal and accountancy firms, have reached private settlements with the Revenue Commissioners over an 'aggressive' tax-avoidance scheme involving drilling oil wells in the American Midwest.
The scheme allowed the HNWIs to generate artificial income tax losses that were then offset against their annual tax bills.
The settlement means that the names of those who settled will not be published in the Revenue's quarterly list of defulters.
The Sunday Independent has learned that most of the 'oil drill' syndicate successfully negotiated a discount of some 50pc on the multimillion-euro bills that the Revenue had raised after its investigations.
However, a small number are still contesting the penalties.
Revenue has three dedicated large-case units investigating the tax affairs of HNWIs, many of whom engaged in aggressive tax-planning schemes to reduce their liabilities.
Last year, Revenue collected more than €30m in unpaid tax and penalties after it had probed the financial affairs of more than 500 medical consultants.
It emerged that many of the doctors had set up 'controlled companies' to maximise their incomes, but were later found to contain aggressive tax-planning and avoidance measures.
Other schemes that have been examined by Revenue include a partnership which acquired licences for a number of films and granted the distribution rights for these films to a company.
Promotional expenditure paid by the partnership to the distribution company gave rise to a significant loss in the partnership, which was then claimed by the individual partners, giving rise to significant tax repayments.
Revenue does not publish the details of all settlements.
Its code of practice makes provision for what are known as 'qualifying disclosures', defined as "a disclosure of complete information in relation to, and full particulars of, all matters occasioning a liability to tax that give rise to penalty".
The disclosure has to be made in writing and accompanied by a payment and a declaration that the disclosure is accurate and complete to the tax payer's knowledge.
Asked about the oil-drilling scheme, the Revenue said that it would not comment on individual cases.
Sunday Indo Business