Brian Cowen (Laois-Offaly, Fianna Fail)

I am informed by the Revenue Commissioners that the report mentioned was an internal report of an organisation review group which led in to the restructuring of the Office of the Revenue Commissioners. The comment in the report regarding the possibility that people claiming to be non-resident in Ireland might in reality be living here was intended to outline the group's perception of a risk on which Revenue's new structures would need to be able to focus. I am advised that the comment was not based on any research carried out at that time. The new structures that emerged from the report and which were put into place in late 2003 included a specialist high wealth individuals unit within a large cases division and specialist areas in each region, which were capable of focusing on the tax compliance behaviour, including residence patterns, of wealthy people.

I am also informed that the high wealth individuals unit is currently examining a number of claims to non-residence as part of its risk-based audit programme and that this type of audit will be a feature of all future audit programmes in this area.

I am further informed by the Revenue Commissioners that the procedures adopted in regard to validating a claim to non-residence status depend on the circumstances in each case. The administration of these validation procedures is a matter for the Revenue Commissioners and I am informed by them that these procedures are kept under review. The methods used to verify claims to non-residence include a range of tests and an intelligence dimension which for obvious reasons Revenue do not publicise. In addition, Revenue has statutory powers to make relevant inquiries regarding any aspect of tax returns, including claims to non-residence status.

The rules on residency are not a tax relief scheme as such and are therefore not included in the review of tax relief schemes that I announced in the 2005 budget. However, as already outlined to the House, I have asked the chairman of the Revenue Commissioners to monitor the application of the current non-resident rules, through examination of cases handled in the Revenue large cases division and to provide me with a report once this examination is complete.

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