Jailed trader who dealt in cash and ‘binned’ financial records loses €950,000 income tax battle with CAB

An ‘incarcerated’ general trader who ‘binned’ his destroyed financial statements at the end of every year has lost his long-running €952,184 income tax battle with the Criminal Assets Bureau (CAB).

This follows Tax Appeals Commissioner Andrew Feighery upholding the €952,184 tax bill issued in 2018 to the trader of different types of goods and commodities for a 16-year period from 1999 to 2015.

The ruling by Mr Feighery overturns an earlier TAC ruling on the case in 2019 which largely found in favour of the trader who is a member of the Traveller community and a company director who operated an international tarmacking business across Italy, Spain, Portugal, France and Germany.

However, after CAB challenged the 2019 decision in the High Court the TAC determination was quashed and the case was remitted back for a new hearing to the TAC for a different Commissioner to hear the case ‘de novo’.

The March 2018 income tax bill was issued to the un-named trader after CAB estimated that his revenues during the 15-year period totalled €2.02m that included estimated revenues of €511,772 for one year alone in 2007.

However, in response, the general trader’s solicitors contended that he operated in Ireland for only four weeks each year and his cumulative Irish revenues during the 1999 to 2015 period totalled only €187,906 and the estimated tax owed was €48,442.

In his findings, Mr Feighery found as material facts that that trader’s activities were in a ‘cash format’ and he destroyed his business records at the end of each year and when the records were destroyed the trader discarded them in a bin.

Mr Feighery stated that owing to the trader’s transient lifestyle, he was not resident in any jurisdiction but was a ‘chargeable person’ under the Tax Consolidation Act 1997.

Dismissing the trader’s appeal, Mr Feighery concluded that as the trader destroyed his financial records at the end of each year, he is incapable of discharging the requisite burden of proof as he has no corroborating evidence or documentary evidence to vouch his direct evidence in order to demonstrate that the assessments issued by CAB are not payable.

Mr Feighery commented: “There is no bar to any person conducting their affairs and trade in cash but if that choice is made, then it is imperative that other records are kept.”

He said that such documentation is a mandatory requirement under tax law.

Mr Feighery has made his ruling after a March 2023 oral hearing into the case and he noted that a summons was required for the attendance of the trader at the hearing “as he was incarcerated as at the date of his appeal”.

At hearing, the trader was represented by counsel, a solicitor and an accountant and Mr Feighery noted “the grace and courtesy of the Appellant and the respect he and his family” who attended the hearing demonstrated to the Commissioner and the Commission at all times.

Before deciding on the substantive tax issue, Mr Feighery found the trader’s appeal invalid after declaring that it was a late appeal.

He stated that for the late appeal to be valid, the trader was required to pay the €952,184 plus statutory interest and make tax returns for the period in dispute and this was not done.

The trader argued that “a considerable sum of assets” seized during a CAB search of his home in 2016 exceeded the “sum of tax” due.

Mr Feighery noted that the CAB search warrant entitled the bureau “to collect material in respect of alleged criminal conduct regarding the Appellant and a number of named parties”.

During the raid, CAB recovered €88,740 in cash and £23,405 while €4,484 which was found in possession of the trader when he was searched at a nearby Garda Station.

CAB officers also retrieved a number of UK vehicle registration certificates. At the time of the raid, that property was occupied by the appellant, his wife, his daughter and his two adult sons.

Mr Feighery stated that ignoring the fact that the value of those seized assets is unlikely to be capable of discharging the quantum of CAB’s assessment, he noted that the motor vehicles and associated documentation did not belong to the trader.

Mr Feighery also stated that the cash seized could belong to other members of the household and the trader has provided no documentation to say who owns the cash.

Mr Feighery’s ruling overturns a 2019 TAC ruling where Commissioner Conor Kennedy in the case accepted the trader’s estimated €48,442 Irish taxation liability subject to two variations that included a 2006 €80,000 property sale that should be liable to tax and that the trader should be assessed for tax here for five weeks per annum instead of four.

The two variations increased the trader’s income to €294,800 for the 1999 to 2015 period. Mr Kennedy’s May 2019 ruling recorded that the general trader was found guilty of conspiracy in Northern Ireland in 2014.

At the 2019 hearing, the man told the TAC that he and his family left Ireland in 1995 and would make occasional trips back to Ireland for Christmas, family functions, funerals, St Patrick’s Day and the Ballinasloe Horse fair and had residential properties in Malta and Portugal.

In relation to Mr Feighery’s ruling, the TAC has confirmed that it has been requested to state and sign a case for the opinion of the High Court.

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