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Tuesday 12 November 2019

Mick Wallace off the hook after €1.4m tax dodge

Mick Wallace
Mick Wallace

Michael Brennan Deputy Political Editor

TAX cheat Mick Wallace will escape any prosecution and will keep his Dail seat, despite admitting he knowingly fiddled his company's VAT returns.

The corporate enforcement watchdog has decided not to investigate Mr Wallace's role in under-declaring €1.4m of VAT in his construction company, the Irish Independent has learned.

In one of his final acts before stepping down at the end of this month, Director of Corporate Enforcement Paul Appleby said he did not propose to carry out an investigation into M&J Wallace at this time.

He said the VAT returns of companies -- including any falsification in those returns -- were "a matter for the Revenue Commissioners".

But as the Revenue has already opted to make a €2.1m settlement with Mr Wallace's company, he is now highly unlikely to face any prosecution.

The shamed Wexford TD said he would give up half of his Dail salary, in response to outrage when the tax dodging was made public in June.

But there is no chance of the TD being able to repay all the VAT that M&J Wallace Ltd withheld from the Revenue in 2008.

He would need to serve as a backbencher for 87 years to earn enough money for this.

The only other sanction that Mr Wallace is now facing is a motion of censure in the Dail when it returns next month.

However, the TD is at no risk of being kicked out of Leinster House on a permanent or temporary basis -- the Dail can only express its disapproval of his actions.

So Mr Wallace will be free to hold on to his seat for the Wexford constituency and his €92,000 salary.

The news that he is off the hook was greeted with disappointment by some TDs, including Fine Gael Cork East TD Tom Barry.

Mr Barry had originally written to the director of corporate enforcement seeking an investigation into Mr Wallace's conduct as a company director.

"I really feel that a blatant situation like Mick Wallace's needs to be dealt with. He holds one of the highest offices in the land as a TD in the Dail," he said.

In his letter, Mr Appleby did hold out some possibility of an investigation into Mr Wallace's company in the future.

But he implied this would only happen if new evidence came to light.

"Clearly, this investigative option will be reconsidered if I later receive evidence that breaches of law or duty may have occurred which are relevant to my remit and extend beyond those already dealt with by other relevant authorities," he wrote. However, Mr Barry said he would be writing back to Mr Appleby for a more detailed explanation.

He said he did not understand why its powers did not allow it to investigate Mr Wallace and his company.

"There needs to be a rational explanation. This is going to continue until I get an answer," he said.


Mr Appleby's office said it would not comment until it received further correspondence from Mr Barry.

Meanwhile, new figures show the Revenue Commissioners are taking a get-tough approach against some errant taxpayers, securing court judgments totalling €55m so far this year.

Some 889 individuals or companies have been taken to court between January and June, the figures show, with average amounts of €61,417 secured.

The figures, released to Fianna Fail finance spokesman Michael McGrath by the Department of Finance, show a steady increase in civil court judgments in the past three years. In 2009, 1,419 judgments totalling €66.8m were secured, an average of €47,000 each. The following year 1,966 were taken, netting €85.1m, with another 1,968 last year, resulting in judgments totalling €94.9m.

Mr McGrath said last night it was "no surprise" that the number of judgments had increased, given that businesses were struggling to make ends meet.

"On the one hand, it's heartening to see Revenue are fulfiling their responsibilities, but sad that so many businesses are having court judgments registered against them," he said.

There have been several high- profile cases, including last month, when former company director Sean Hartigan of Prestige Recycling was jailed for three years for defrauding the State of almost €200,000 in taxes.

He filed fraudulent VAT returns over an 18-month period that amounted to a total discrepancy of €188,000.

Judge Carrol Moran said it undermined the social solidarity of society when the courts and the State were not seen to punish people who were not compliant, be it tax evasion or social welfare fraud.

The Irish Independent yesterday asked the Revenue Commissioners why they had sent a file to the Director of Public Prosecutions to prosecute Mr Hartigan, while opting to make a settlement with Mr Wallace, whose company had under-declared €1.4m in VAT.

A Revenue spokeswoman said it could not comment on individual cases.

Irish Independent

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