Report on a Fiscal Prosecutor and a Revenue Court (LRC 72-2004)
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__________ REPORT ON A FISCAL PROSECUTOR AND A REVENUE COURT _______ (LRC 72-2004) IRELAND The Law Reform Commission 35-39 Shelbourne Road, Ballsbridge, Dublin 4 © Copyright The Law Reform Commission 2004 First Published December 2004 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 seventy Reports containing proposals for reform of the law; eleven Working Papers; thirty four Consultation Papers; a number of specialised Papers for limited circulation; An Examination of the Law of Bail; and twenty five Annual Reports in accordance with section 6 of the 1975 Act. A full list of its publications is contained in Appendix C 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 Head of Law School Trinity College Dublin Part-time Commissioner Professor Finbarr McAuley Jean Monnet Professor of European Criminal Justice, University College Dublin iii Part-time Commissioner Marian Shanley, Solicitor Secretary John Quirke Research Staff Director of Research Raymond Byrne BCL, LLM, Barrister- at-Law Legal Researchers Deirdre Ahern LLB, LLM (Cantab), Solicitor Alan Brady LLB (Dub), LLM (Lond), Attorney-at-Law (NY) ` Ronan Flanagan LLB, LLM (Cantab) Glen Gibbons BA, LLB (NUI), LLM (Cantab), Barrister-at-Law (with the Commission until September 2004) Roberta Guiry BCL, LLM (NUI) Orla Joyce BCL, LLM (Cantab) Sinéad Ring BCL (Law and German), LLM (NUI) Mary Townsend BCL, LLM (NUI) Aisling Wall BCL, LLM (Cantab) Administration Staff Project Manager Pearse Rayel Legal Information Conor Kennedy BA, H Dip LIS Manager Cataloguer Eithne Boland BA (Hons), H Dip Ed, H Dip LIS Executive Officer Denis McKenna Private Secretary Liam Dargan to the President iv Clerical Officers Alan Bonny Debbie Murray Principal Legal Researchers on this Report Glen Gibbons BA, LLB (NUI), LLM (Cantab), Barrister-at-Law Sinéad Ring BCL (Law and German), LLM (NUI) Marcus Bourke MA, Barrister-at-Law, former Parliamentary Draftsman assisted in the drafting of the attached Bill. 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 This Report benefited from the assistance of a number of people, including those who attended the Commission’s colloquium and who answered many queries from the Commission. In particular, the Commission would like to thank: Frances Cooke, Office of the Revenue Commissioners Paddy Donnelly, Office of the Revenue Commissioners Fergus Glavey, Office of the Comptroller and Auditor General Seán Ó Catháin, Office of the Revenue Commissioners John Whelan, Office of the Comptroller and Auditor General The Commission would also like to thank the Appeal Commissioners, the Irish Taxation Institute and the Office of the Revenue Commissioners for their helpful correspondence and submissions. vi NOTE This Report was submitted to the Attorney General, Mr Rory Brady SC, under Section 4(2)(c) of the Law Reform Commission Act 1975. It embodies the results of an examination of and research in relation to the possible benefits of a Fiscal Prosecutor and a Revenue Court which was carried out by the Commission at the request of the former Attorney General, Mr Michael McDowell SC, together with the proposals for reform which the Commission was requested to formulate. While these proposals are being considered in the relevant Government Departments the Attorney General has requested the Commission to make them available to the public, in the form of this Report, at this stage so as to enable informed comments or suggestions to be made by persons or bodies with special knowledge of the subject. vii TABLE OF CONTENTS INTRODUCTION.......................................................................................................1 CHAPTER 1 REFORM OF THE REVENUE COMMISSIONERS ............5 A Introduction........................................................................................................5 B The Revenue Commissioners: Modernisation and Restructuring..................11 (1) National Office Divisions........................................................................11 (2) Regionalisation ........................................................................................12 (3) Large Cases Division...............................................................................13 (4) Investigations and Prosecutions Division ...............................................14 (5) Risk Management Unit............................................................................14 (6) e-Revenue ................................................................................................15 (7) Conclusion ...............................................................................................17 CHAPTER 2 CIVIL PENALTIES ..................................................................19 A Introduction......................................................................................................19 B Publication of Names of Tax Defaulters.........................................................23 C External Reviewer ...........................................................................................25 CHAPTER 3 AUDITS.......................................................................................27 A Introduction......................................................................................................27 B Overview..........................................................................................................28 C Random Audit..................................................................................................31 D Qualifying Disclosure Scheme........................................................................32 (1) Outline of Current System.......................................................................32 (2) Revenue Powers Group Report...............................................................34 E A ‘Hansard’ Type Warning System................................................................36 (1) Freedom from self-incrimination ............................................................36 (2) A Modified Qualifying Disclosure Scheme............................................38 CHAPTER 4 PROSECUTION: NON-FILING .............................................43 A Introduction......................................................................................................43 B The Filing System: Theory and Practice.........................................................43 C Current Problems with the Filing and Enforcement Process:.........................50 (1) Delays in the Prosecution of ‘Non-Filers’ ..............................................50 (2) Enforcement.............................................................................................53 (3) Recidivism ...............................................................................................56 CHAPTER 5 PROSECUTION OF SERIOUS TAX EVASION..................59 A Introduction......................................................................................................59 B Serious Tax Evasion ........................................................................................59 (1) Prosecution Policy ...................................................................................61 (2) Prosecution Criteria .................................................................................62 C Further Reform of the Prosecution Process ....................................................64 (1) Arrest and Detention................................................................................65 ix (2) Evidential and Procedural Changes ........................................................70 (3) Prosecution Costs ....................................................................................71 CHAPTER 6 PUBLIC PROSECUTION SYSTEM ......................................77 A Introduction......................................................................................................77 B Summary Prosecutions ....................................................................................77 (1) The DPP...................................................................................................77 (2) The Garda Síochána ................................................................................78 (3) The Revenue Commissioners..................................................................79 C Director of Fiscal Prosecutions .......................................................................80