I am advised by the Revenue Commissioners that while no specific projects have been undertaken in the recent past to identify the origin of funds used to acquire residential or other properties for cash, the Revenue Commissioners have a wide range of information sources available from which they can monitor cash purchases of houses and other real estate. Under Section 42 of the Criminal Justice (Money Laundering and Terrorist Financing) Act 2010 all designated bodies (including all financial institutions) are required to report to An Garda Síochána and the Revenue Commissioners all suspicious transactions, including any unusually large cash movements. Similarly, any solicitors or other practitioners who execute property transfer instruments are also designated persons for the purposes of the money laundering legislation and must satisfy themselves as to the source of purchase monies in drawing up the transfer instrument and report anything untoward to the Gardaí and to Revenue.
Cases are selected by Revenue for examination based on the presence of various risk indicators. The Revenue Commissioners are assisted in that process by their Risk Evaluation Analysis and Profiling (REAP) system that contains various types of information including information relating to the purchase of property and suspicious transactions involving the movement of monies. In the case selection process, of particular interest to Revenue are those individuals whose funds used to purchase a property appear to have come from hidden or undeclared income or from unexplained wealth. In such cases, Revenue carry out the necessary ‘checks and balances’ with a view to determining whether the money used to fund (or part fund) the purchase of a property came from illegal activity, including the shadow economy. Where the explanation as to the source of money used to purchase a property is not creditable, Revenue then carry out further checks, including audits or investigations, which may result in Revenue seeking additional tax, interest on late payment of tax and penalties as well as prosecutions for making false tax returns.
I am further informed by the Revenue Commissioners that they do not retain statistics for each separate risk factor used to trigger a case for examination as the case selection of a case for examination generally includes a number of risk factors including the level of income shown in a person’s tax returns. However, I am assured by the Revenue Commissioners that they are very mindful that cash obtained from illegal activities can be used to purchase properties and I am satisfied that their overall compliance programme focusses significant resources on the cash sector which includes examining the use to which undeclared cash amounts have been put.
Lastly, cases involving serious criminality and proceeds of crime are investigated by the Criminal Assets Bureau (CAB). CAB is resourced by officials from the Attorney General’s Office, the Department of Social Protection & the Revenue Commissioners. These investigations can result in the confiscation of assets under the Proceeds of Crime legislation in addition to the raising of tax & duty assessments.
