Reporting shadow economy activity (tax evasion)
What is Revenue doing about the shadow economy?
Compliance Interventions on tax obligations
Revenue initiatives to tackle shadow economy activity consist of:
Outdoor compliance work
- the making of unannounced visits to venues, businesses and individuals
- covert surveillance to gather information and evidence
- Revenue officers working in close cooperation with:
- officers from the Department of Employment Affairs and Social Protection (DEASP) and the Workplace Relation Commission (WRC) in investigations into non-compliance with tax, social welfare and employment legislation
- other State agencies on matters such as oil laundering and tobacco smuggling.
Indoor compliance work
- intelligence gathering
- collating third party information including data received from other State agencies and local authorities
- information received from other State agencies
- examining Suspicious Transaction Reports received from financial institutions and other designated bodies
- examining information received from businesses and members of the public
- matching intelligence and information against tax and duty returns made so as to verify the accuracy of such returns.
Use of Revenue's Risk Evaluation Analysis and Profiling (REAP) system
This system is a risk-based case selection tool. REAP selects businesses (companies, partnerships and sole traders) and individuals for visits, investigations and audits.
Revenue staff pursue (including by way of criminal prosecution) those who do not submit their tax and duty returns.
Audits and investigations
Revenue staff carry out a wide range of enquiries, audits and investigations to ensure that businesses (companies, partnerships and sole traders) and individuals comply with their obligations under tax and duty legislation. In particular, to verify the accuracy of tax and duty returns made and liabilities paid.
What are the outcomes of Revenue's work in combating shadow economy activity?
The outcomes include:
- the submission of outstanding tax and duty returns
- the payment to Revenue of outstanding taxes and duties and also the payment of interest on late payment on unpaid tax and duties
- the payment of penalties for not complying with legal obligations
- in some instances, criminal prosecution.