Mr. Niall Cody:

We are always reluctant to get into value judgments. We can look at the facts of the case. To date we have yields in 276 cases and published 36 cases. One cannot be published on the tax defaulter list if engaged in legal tax planning. What tends to happen in schemes like this is interaction between corporate tax rates, capital gains tax rates and income tax rates. It is perfectly permissible to plan one's way through that scheme. The problem in this project is the legitimate boundaries were forgotten about. There is an idea of goodwill in the context of these cases. In all the cases we have settled, the goodwill has been completely undone. It is not a question of valuation and the use of expenses. In the previous years we have reported a review of the contractors project. One example of the cases we deal with are wages for children, or under age people, as there was in one of the cases I saw relating to work on a website as the child was proficient in information technology and the consultant was not. That is what we must deal with. When we deal with a scheme like this, it is constructed by professionals and part of the challenge comes from everybody lumping in everything, to use an agricultural term, in minimising the amount of tax paid. The average settlement in these cases is considerably higher than the settlements we have in our risk-based project. These are high-wealth individuals with significant income and significant underpayment of tax. I know tax professionals are involved with this but there are also professional people involved. It comes back to the idea that if a scheme results in a significant reduction in tax liability - if it is too good to be true - it is probably not proper.