Consultation Paper on a Fiscal Prosecutor and a Revenue Court ______
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__________ CONSULTATION PAPER ON A FISCAL PROSECUTOR AND A REVENUE COURT _______ (LRC CP 24 - 2003) IRELAND The Law Reform Commission 35-39 Shelbourne Road, Ballsbridge, Dublin 4 © Copyright The Law Reform Commission 2003 First Published July 2003 ISSN 1393 – 3140 ii THE LAW REFORM COMMISSION Background The Law Reform Commission is an independent statutory body whose main aim is to keep the law under review and to make practical proposals for its reform. It was established on 20 October 1975, pursuant to section 3 of the Law Reform Commission Act 1975. The Commission’s Second Programme for Law Reform, prepared in consultation with the Attorney General, was approved by the Government and copies were laid before both Houses of the Oireachtas in December 2000. The Commission also works on matters which are referred to it on occasion by the Attorney General under the terms of the Act. To date the Commission has published sixty nine Reports containing proposals for reform of the law; eleven Working Papers; twenty three Consultation Papers; a number of specialised Papers for limited circulation; An Examination of the Law of Bail; and twenty three Reports in accordance with section 6 of the 1975 Act. A full list of its publications is contained in Appendix D to this Consultation Paper. Membership The Law Reform Commission consists of a President, one full-time Commissioner and three part-time Commissioners. The Commissioners at present are: President The Hon Mr Justice Declan Budd High Court Full-time Commissioner Patricia T Rickard-Clarke, Solicitor Part-time Commissioner Dr Hilary A Delany Barrister-at-Law Senior Lecturer in Law Trinity College Dublin Part-time Commissioner Professor Finbarr McAuley Jean Monnet Professor of EuropeanCriminal Justice University College Dublin iii Part-time Commissioner Marian Shanley, Solicitor Secretary John Quirke Research Staff Deirdre Ahern LLB, LLM (Cantab), Solicitor Simon Barr LLB (Hons), BSc Patricia Brazil LLB, Barrister-at-Law Ronan Flanagan LLB, LLM (Cantab) Glen Gibbons BA, LLB (NUI), LLM (Cantab) Claire Hamilton LLB (Ling Franc), Barrister-at-Law Darren Lehane BCL, LLM (NUI) Philip Perrins LLB, LLM (Cantab), of the Middle Temple, Barrister Trevor Redmond LLB, MPhil, LLM (Cantab) Jennifer Schweppe BCL (Euro) Administration Staff Project Manager Pearse Rayel Legal Information Marina Greer BA, H Dip LIS Manager Cataloguer Eithne Boland BA (Hons) H Dip Ed, H Dip LIS Higher Clerical Officer Denis McKenna Private Secretary Liam Dargan to the President Clerical Officers Gerry Shiel Sharon Kineen iv Principal Legal Researcher on this Consultation Paper Claire Morrissey BCL (Int’l), LLM (KU Leuven) Contact Details Further information can be obtained from: The Secretary The Law Reform Commission 35-39 Shelbourne Road Ballsbridge Dublin 4 Telephone (01) 637 7600 Fax No (01) 637 7601 E-mail [email protected] Website www.lawreform.ie v ACKNOWLEDGEMENTS The Commission would like to thank Anthony Aston SC, Frances Cooke Revenue Solicitor, Paddy Donnelly Assistant Secretary Office of the Revenue Commissioners, Raymond Fullam SC, Paddy Hunt SC, Ronan Kelly Appeal Commissioner, Suzanne Kelly BL, Michael Liddy, Office of the Director of Public Prosecution and John O’Callaghan Appeal Commissioner for the many discussions and exchange of views throughout the preparation of this Consultation Paper which we found very helpful. The Commission would also like to thank people who offered views, advice and assistance. Full responsibility for this publication, however, lies with the Commission. In particular, the Commission would like to thank: Professor Niamh Brennan, Michael Smurfit Graduate School of Business, UCD Noel Corcoran, President of the Council of the ITI Pat Costello, Chief Executive of the ITI Aileen Donnelly BL Brian Keegan, Director of Research of the ITI Ita Mangan BL Thomas McCann SC, His Honour Judge Sean O’Leary Mr Justice Esmond Smyth President of the Circuit Court The Commission also wishes to express its gratitude for the help and assistance it received from the Marian Bette, Dutch Tax and Customs Administration; Michael Howard, New Zealand Tax Authority and John Middleton UK Serious Fraud Office. vi TABLE OF CONTENTS INTRODUCTION.....................................................................................................1 Background to this Paper ............................................................................................1 CHAPTER 1 HISTORY OF ENFORCEMENT.............................................7 A The Early Years ...............................................................................................7 B New Era .........................................................................................................11 C High Profile Tax Evasion ..............................................................................12 (1) The Tribunals of Inquiry........................................................................12 (2) The Ansbacher Report ...........................................................................14 (3) The DIRT Inquiry ..................................................................................15 (4) The Comptroller and Auditor General’s Examination of Revenue Write Offs ....................................................................................................19 D The Shadow Economy...................................................................................21 E The Moral Shift..............................................................................................23 F The Revenue Commissioners: Modernisation and Restructuring..................24 G The Evolution of an Investigation and Prosecution Division ........................26 H Recent Reviews .............................................................................................32 CHAPTER 2 CIVIL PENALTIES .................................................................35 A Introduction....................................................................................................35 (1) Taxes Acts..............................................................................................35 (2) “Care and Management”........................................................................35 (3) Self-Assessment.....................................................................................36 (4) Audits ...................................................................................................37 (5) Assessment to Tax .................................................................................39 B Civil Sanctions...............................................................................................40 (1) Introduction............................................................................................40 (2) Part 47 Penalties, Revenue Offences, Interest on Overdue Tax and Other Sanctions......................................................................................41 (3) Mitigation of Penalties...........................................................................42 (4) Surcharge ...............................................................................................45 (5) Interest ...................................................................................................46 (6) ‘Name and Shame’.................................................................................46 C Recourse From Assessment ...........................................................................49 (1) Internal and Joint Reviews.....................................................................49 (2) Statutory Complaint and Appeal Mechanisms.......................................50 D Enforcement...................................................................................................53 E Are ‘Civil Penalties’ Criminal in Character?.................................................56 (1) Introduction............................................................................................56 (2) Constitutional Case-law .........................................................................58 F The European Convention on Human Rights ................................................64 (1) Introduction............................................................................................64 (2) “Civil rights and obligations” ................................................................66 (3) ‘Criminal charge’...................................................................................68 (4) French, Swiss and Dutch Authorities.....................................................69 vii (5) British Authorities..................................................................................72 (6) Irish Civil Penalties................................................................................76 CHAPTER 3 APPEALS..................................................................................89 A Introduction....................................................................................................89 B The Appeal Commissioners: The Present System .........................................90 (1) History of the Office of the Appeal Commissioners..............................90 (2) Appointment and Qualifications ............................................................91 (3) Independence .........................................................................................92 (4) Functions................................................................................................93