In the past, a fine (and perhaps a suspended sentence) was the typical punishment for being found guilty of a Revenue offence. However, recent months have seen a marked change; with prison sentences increasingly imposed for offences under Irish tax legislation.

Reported convictions in 2012 include the following:

• An individual from Blackrock (with a current address in Nice, France) was sentenced to four years imprisonment for failing to submit VAT returns and to remit VAT to Revenue. The man had made a settlement with Revenue and repaid most of the money owed. However, in his sentencing the judge noted that tax evaders should not think they can buy themselves out of a jail term
• The judge in another case imposed a 6 year prison sentence (one year suspended) on an individual who had delivered false VAT returns and claimed VAT repayments to which he was not entitled

Prison sentences have also been imposed on directors/managers of companies where tax offences were committed by the company with the “consent or connivance” of the individual. Indeed, the law provides that recklessness can be enough to make an individual responsible for the sins of the company. In one case, the director of a company was sentenced to three years (with one year suspended) for his involvement in his company’s submission of incorrect VAT and PAYE returns.

We have yet to see if the recent sentences handed down by the courts will be appealed and if so reduced. However, the current message is clear- trying to fool the Revenue will not be tolerated and a lengthy prison sentence may face those who are caught. 

Contributed by Niamh Keogh.

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