Rental Income tax evaders not getting caught

Aemtler

A bit of a Rant.

Someone I know well has been renting their property out (full house, not under rent a room scheme) for the last six years. They are a registered landlord with the PRTB (PPS number supplied). They have not declared their rental income to Revenue in all of this time.

How in all of this time have they not been caught by Revenue? Surely it is would be a basic check by Revenue to check Landlords registered with PRTB verus their tax returns using PPS numbers as the common marker. Revenue authorities in other countries are all over data matching to catch tax evaders.

I get angry as whilst I pay my tax on a rental loss every year (due to only 75% interest deduction) from a apartment property that I am a reluctant landlord due to negative equity, this person is busy buying top of the line cars.


BTW - I'm not going to go into why you would register with PRTB if you were going to evade tax.

draiochtanois

This post has been deleted.

Aemtler

The person has told me.

snubbleste

Does he work for Revenue? :cool:

draiochtanois

This post has been deleted.

The_Honeybadger

Could well be the case. Databases and systems across departments and agencies generally don't work together.

There is absolutely no doubt however that your friend will be caught out eventually and will be hit with penalties and interest on top of the arrears that they owe so don't worry about it. Take a look at the quarterly list of defaulters and the number of people getting done on rental income.

Michael D Not Higgins

Aemtler wrote: »

How in all of this time have they not been caught by Revenue? Surely it is would be a basic check by Revenue to check Landlords registered with PRTB verus their tax returns using PPS numbers as the common marker. Revenue authorities in other countries are all over data matching to catch tax evaders.

I think you're expecting too much of Government agencies and departments to have systems that are compatible and talk to each other. Think of the dozens if not hundreds of systems where Revenue would have to check to ensure everyone was up to date. They prioritise and use the honour system such that they'll get caught if they're audited.

Aemtler

The person has asked me for advice on how likely they will get caught on a number of occassions. Each time I have told this person that they will get caught but six years on - nothing.

Excellent headline. Related news from today...

A landlord was made to pay €3 million to Revenue for not properly declaring tax

http://www.thejournal.ie/revenue-tax-defaulters-2152638-Jun2015/

Valetta

Aemtler wrote: »

The person has asked me for advice on how likely they will get caught on a number of occassions. Each time I have told this person that they will get caught but six years on - nothing.

You could report them. Put your mind at ease.

Tiddlypeeps

Michael D Not Higgins wrote: »

I think you're expecting too much of Government agencies and departments to have systems that are compatible and talk to each other. Think of the dozens if not hundreds of systems where Revenue would have to check to ensure everyone was up to date. They prioritise and use the honour system such that they'll get caught if they're audited.

I really don't think that's expecting too much. I think you are over estimating the complexity of creating systems that can interact with each other, especially just for read only purposes. There would be up front costs involved in getting the software up and running but I believe that would pay for itself quite quickly.

John_Mc

Michael D Not Higgins wrote: »

I think you're expecting too much of Government agencies and departments to have systems that are compatible and talk to each other. Think of the dozens if not hundreds of systems where Revenue would have to check to ensure everyone was up to date. They prioritise and use the honour system such that they'll get caught if they're audited.

The systems don't need to be compatible or to talk to each other as long as they can export data in a standard format.

It's as simple as Revenue exporting a list of all PPSNs that are declared for rental income. The PRTB exports a list of PPSNs that are registered with them.

Do a Difference between the two files and you have your list of PPSNs to investigate.

There will be edge cases not caught here, but it's a good place to start.

I short, if Revenue had the appetite to do this then it could be done

Michael D Not Higgins

Tiddlypeeps wrote: »

I really don't think that's expecting too much. I think you are over estimating the complexity of creating systems that can interact with each other, especially just for read only purposes. There would be up front costs involved in getting the software up and running but I believe that would pay for itself quite quickly.

Getting new and legacy systems to work together can cost millions. I also refer you to my other point of the dozens of other systems they would also have to set up to be comprehensive.

Michael D Not Higgins

John_Mc wrote: »

The systems don't need to be compatible or to talk to each other as long as they can export data in a standard format.

It's as simple as Revenue exporting a list of all PPSNs that are declared for rental income. The PRTB exports a list of PPSNs that are registered with them.

Do a Difference between the two files and you have your list of PPSNs to investigate.

There will be edge cases not caught here, but it's a good place to start.

I short, if Revenue had the appetite to do this then it could be done

If you think it's easy, I'd suggest talking to Revenue. I'm sure they could give you a million reasons why it may or may not work.

I'm not even sure that kind of thing can be done with Ireland's Data Protection laws.

Sunny Dayz

OP tell your friend to get in a tenant on rent allowance - I know a landlord who got caught out that way.

John_Mc

Michael D Not Higgins wrote: »

If you think it's easy, I'd suggest talking to Revenue. I'm sure they could give you a million reasons why it may or may not work.

I'm not even sure that kind of thing can be done with Ireland's Data Protection laws.

I'm an experienced software developer and have worked in several semi-state and state agencies building software and systems for them, albeit not Revenue itself.

To be absolutely clear, I am not talking about having two systems integrated as that probably would cost millions.

The approach I suggested would allow Revenue investigators achieve the same result through manual means. It's not difficult to write SQL queries to obtain the list of PPSNs on both sides regardless of what systems they both use.

Export the results to CSV and use Excel to load and transform.

Legislation surrounding the exchange of this information is a different matter but you would think it would be Ok given the task that Revenue has in collecting taxaction and its far reaching powers.

ixoy

Data protection laws are very strict in Ireland. Legal hurdles would need to be overcome as well if you're trying to share data.

Aemtler

Michael D Not Higgins wrote: »

If you think it's easy, I'd suggest talking to Revenue. I'm sure they could give you a million reasons why it may or may not work.

I'm not even sure that kind of thing can be done with Ireland's Data Protection laws.

According to this article - the Australian Taxation Office recouped $10 for every $1 spent on combatting tax evasion through data matching.

http://www.smh.com.au/national/australian-tax-office-nets-430m-from-the-rich-20140125-31fra.html

May be Irish Revenue would get simliar returns. It would go a long way towards putting a dent in the budget deficit

Cuddlesworth

Because our data protection laws don't allow for cross referencing to that extent. If you ask people for information and you store it, you are only allowed use that information in the context of which you asked it for.

I'll give you a good example of this. The government knows that a huge percentage of untaxed cars cross the M50 everyday(10%) from the license plate scanners at the old toll section. But that data is stored for the purpose of usage billing, not for checking for tax. So they can't fine or go further with specific individuals. They can use the meta data for analysis though, as long as its not specific to a person.

I have no doubt that the revenue is aware of how many "landlords" there are who declare no additional income. But they can't use the PRTB database, in which people provided their details for the purpose of tenant registration, to investigate and prosecute for tax evasion.

snubbleste

Cuddlesworth wrote: »

Because our data protection laws don't allow for cross referencing to that extent. If you ask people for information and you store it, you are only allowed use that information in the context of which you asked it for. ...
But they can't use the PRTB database, in which people provided their details for the purpose of tenant registration, to investigate and prosecute for tax evasion.

The PRTB can share information with local authorities, DSP and Revenue. http://www.citizensinformation.ie/en/housing/renting_a_home/private_residential_tenancies_board.html
Cross-checks are being made by looking at claims for rent relief from tenants, PRTB registrations, information on rent subsidies from DSP. Officials are also using data from local authorities on who has paid the second-homes tax. http://www.independent.ie/business/personal-finance/property-mortgages/revenue-targets-landlords-in-rental-income-crackdown-26758111.html

I've no idea why he registered with the PRTB if he was planning on not declaring rental income, its basically shooting yourself in the foot.

Michael D Not Higgins

snubbleste wrote: »

The PRTB can share information with local authorities, DSP and Revenue. http://www.citizensinformation.ie/en/housing/renting_a_home/private_residential_tenancies_board.html
Cross-checks are being made by looking at claims for rent relief from tenants, PRTB registrations, information on rent subsidies from DSP. Officials are also using data from local authorities on who has paid the second-homes tax. http://www.independent.ie/business/personal-finance/property-mortgages/revenue-targets-landlords-in-rental-income-crackdown-26758111.html

Clause 148 of the RTA 2004 only allows the Revenue to submit details about a landlord and the PRTB can confirm whether they have a tenancy registered. I think the kind of large scale comparisons of the two databases are outside the scope of what the law allows and Data Protection would step in.

BoatMad

Michael D Not Higgins wrote: »

Clause 148 of the RTA 2004 only allows the Revenue to submit details about a landlord and the PRTB can confirm whether they have a tenancy registered. I think the kind of large scale comparisons of the two databases are outside the scope of what the law allows and Data Protection would step in.

And that's a very good thing too, mass trawling for data shouldn't be allowed

Captain Chaos

Then why were Irish Water looking for everyone's PPS numbers at the start. To take it directly from your wages for non payment? Even though by law they are not allowed to do anything with the PPSNs.

MarkAnthony

PRTB and revenue don't talk to each other and banks dont check the PRTB database to see who's being naughty with their trackers. Welcome to Ireland. There is an argument that they shouldn't. The PRTB is a dispute resolution system not a tax collection body.

The reason they've done it though is if they get caught failure to register with the PRTB would mean they could not claim the mortgage tax deduction. As it stands they'd be looking at penalties and interest but would still be able to claim the deduction - a bit of hedging.

Michael D Not Higgins

MarkAnthony wrote: »

PRTB and revenue don't talk to each other and banks dont check the PRTB database to see who's being naughty with their trackers.

The reason they don't do it is because people don't want it. A system whereby everyone has a 'profile' with the government would sort out a lot of issues. Tax, health records, social welfare, law records, census data, etc. I'm sure we'll get there eventually (like 100+ years away) but at the moment, no one trusts any government to hold that kind of information over everyone.

For these reasons people are much happier with information silos that are non-communicative except in rare conditions. It prevents corruption, misuse and should there be a leak or system breach, the information that gets out is minimal to the whole.

BoatMad

Captain Chaos wrote: »

Then why were Irish Water looking for everyone's PPS numbers at the start. To take it directly from your wages for non payment? Even though by law they are not allowed to do anything with the PPSNs.

No, they were attempting to use it to establish your martial and child status to seek to determine if you were registering correctly.

They never had the power to attach salary , nor does giving someone your PPSN give them that right anyway

Let's leave the tin hat conspiracy theories to other threads !

Cuddlesworth

BoatMad wrote: »

No, they were attempting to use it to establish your martial and child status to seek to determine if you were registering correctly.

They never had the power to attach salary , nor does giving someone your PPSN give them that right anyway

Let's leave the tin hat conspiracy theories to other threads !

I think in ideal circumstances it was a method of avoiding the current bill hopping that goes on with Gas/Elec by applying a unique ID to each person. I know both utilities have a very large amount of bad debts every year.

starringme

There's a lot of misinformation on this thread. One example:

MarkAnthony wrote: »

PRTB and revenue don't talk to each other ...

They do, but it's a one-way conversation. Revenue are provided with PRTB information and by accessing this link you can view whether tenancies are active or inactive. Information is also provided by several other public agencies.

OP, remember that just because you've registered with the PRTB doesn't mean that your current tenants are registered. After 4 years the registration becomes inactive, or after tenants leave, and the onus is on the landlord to update the tenant's details.

If you're super pissed off about tax evaders you should send a good citizen's report to your friend's Revenue district, providing as much detail as possible and maybe something can be done.

There is a pretty strict tax risk/reward method to decide whether a person is worth pursuing. Many variables, one being inactive PRTB registrations, feed into Revenue's systems which measure risk which in turn decide audit potential.

(I say this as a Revenue employee.)

cerastes

Aemtler wrote: »

A bit of a Rant.

Someone I know well has been renting their property out (full house, not under rent a room scheme) for the last six years. They are a registered landlord with the PRTB (PPS number supplied). They have not declared their rental income to Revenue in all of this time.

How in all of this time have they not been caught by Revenue? Surely it is would be a basic check by Revenue to check Landlords registered with PRTB verus their tax returns using PPS numbers as the common marker. Revenue authorities in other countries are all over data matching to catch tax evaders.

I get angry as whilst I pay my tax on a rental loss every year (due to only 75% interest deduction) from a apartment property that I am a reluctant landlord due to negative equity, this person is busy buying top of the line cars.


BTW - I'm not going to go into why you would register with PRTB if you were going to evade tax.

starringme wrote: »

There's a lot of misinformation on this thread. One example:



They do, but it's a one-way conversation. Revenue are provided with PRTB information and by accessing this link you can view whether tenancies are active or inactive. Information is also provided by several other public agencies.

OP, remember that just because you've registered with the PRTB doesn't mean that your current tenants are registered. After 4 years the registration becomes inactive, or after tenants leave, and the onus is on the landlord to update the tenant's details.

If you're super pissed off about tax evaders you should send a good citizen's report to your friend's Revenue district, providing as much detail as possible and maybe something can be done.

There is a pretty strict tax risk/reward method to decide whether a person is worth pursuing. Many variables, one being inactive PRTB registrations, feed into Revenue's systems which measure risk which in turn decide audit potential.

(I say this as a Revenue employee.)

This OP,
Just because a property is registered with the PRTB does not mean the landlord has it rented or is getting rent, maybe the tenant isnt paying anything, ot maybe the landlord had won the lotto? and charges nothing? as mentioned people also talk ****e and will talk themselves up too.

My big concern would be are the tenants asshats and is the place unkept, Id resort to the revenue reporting only as a tool to put the boot in if the landlord doesnt give a damn about the place, but as you seem to be on talking terms with them, Id suggests a good rapport with them is better than the revenue extracting a pittance.
Maybe the person isnt due to pay tax after any deductions?
If they go the SW route they definitely talk to each other.

But a registered property means nothing, or not that even the landlord is receiving anything.

starringme

cerastes wrote: »

This OP,
Maybe the person isnt due to pay tax after any deductions?

Regardless of whether your net position is profit or loss, if you rent a property you're obliged to declare it, you then claim deductions and losses against the income.

snubbleste

The tenancy was reported to the PRTB when the Department of Social Protection began to pay rent supplement. http://www.thejournal.ie/rent-supplement-landlord-caught-2191569-Jul2015/

DSP automatically report tenancies to PRTB

karenalot

snubbleste wrote: »

The tenancy was reported to the PRTB when the Department of Social Protection began to pay rent supplement. http://www.thejournal.ie/rent-supplement-landlord-caught-2191569-Jul2015/

DSP automatically report tenancies to PRTB

Not sure why the DSP paid the rent in the first place? The rent supplement application form clearly states they need evidence of property registration with the PRTB or the application cannot be processed.

snubbleste

karenalot wrote: »

Not sure why the DSP paid the rent in the first place? The rent supplement application form clearly states they need evidence of property registration with the PRTB or the application cannot be processed.

Well, no. DSP want proof of ownership.
To process Rent Supplement, we need to establish ownership of the property by the landlord. One of the following documents are acceptable in photocopy form.
1. Evidence of registration with Private Residential Tenancies Board landlord section.
2. Receipt of payment to Non Principal Private Residence (NPPR).
3. Evidence of buildings insurance policy held by landlord.

karenalot

snubbleste wrote: »

Well, no. DSP want proof of ownership.
To process Rent Supplement, we need to establish ownership of the property by the landlord. One of the following documents are acceptable in photocopy form.
1. Evidence of registration with Private Residential Tenancies Board landlord section.
2. Receipt of payment to Non Principal Private Residence (NPPR).
3. Evidence of buildings insurance policy held by landlord.

Yes you at correct. Although twice I have let out a property (not my own) to tenants with rent supplement and twice welfare would not process the application till proof of PRTB was provided. This was in Kildare.

Tufty

There are social houses located in the estate I live in. My mortgage cost vs the social rent is approx per month ( €1,250 vs €200) for the same type house. Now I know the messages back will be about situation and circumstance ect.. But that's not where I'm taking this as I have zero snobbery. The problem I have is that these houses were provided to people who's circumstances deemed it necessary to have housing at a very low cost.

I understand that the council maintain the scheme and are under resourced and don't / can't regularly inspect the properties. In fact probably have no involvement once the rent is paid. If they did they would find one of the occupants spends significant time abroad in a property owned by them leaving this house vacant and the other rents out rooms as an extra income source.

I try to live by the rules. Pay my way and take charges like social / water / green area upkeep hoping that my contribution improves mine and everyone's facilities but it's getting harder witnessing the ongoing local fraud. I would never report it as personally they are not harming me and if they were discovered and punished might cause me to be in personal danger. Also I don't know who the council might replace them with so its better the devil I know and a case of head down keep peddling for me

cerastes

Tufty wrote: »

There are social houses located in the estate I live in. My mortgage cost vs the social rent is approx per month ( €1,250 vs €200) for the same type house. Now I know the messages back will be about situation and circumstance ect.. But that's not where I'm taking this as I have zero snobbery. The problem I have is that these houses were provided to people who's circumstances deemed it necessary to have housing at a very low cost.

I understand that the council maintain the scheme and are under resourced and don't / can't regularly inspect the properties. In fact probably have no involvement once the rent is paid. If they did they would find one of the occupants spends significant time abroad in a property owned by them leaving this house vacant and the other rents out rooms as an extra income source.

I try to live by the rules. Pay my way and take charges like social / water / green area upkeep hoping that my contribution improves mine and everyone's facilities but it's getting harder witnessing the ongoing local fraud. I would never report it as personally they are not harming me and if they were discovered and punished might cause me to be in personal danger. Also I don't know who the council might replace them with so its better the devil I know and a case of head down keep peddling for me

This thread seems unrelated to your post?
Im not saying your post isnt valid, but maybe it might better be served in its own thread? I fully understand where you are coming from and it seems that someone else should be able to avail of the property as there always seems to mention of shortage of property and long queues.
I'm sure plenty of homes/spaces could be freed up for others if individuals or families hogging homes that they dont use could be located.
How you think this will be better if you dont report it? I do not know, if you are concerned report it anonymously to the council.
Not sure how you expect the council to know about it unless they are told though, whereupon they can investigate and determine if the usage is correct and withing their terms.

It may be true that you wouldnt know who they might replace them with, but as you seem a person of good conscience or you would not have questioned it in your own mind.

Tufty

I think the council should not operate a system if they have no ability to maintain. I will not report this but appreciate your views.

Michael D Not Higgins

Tufty wrote: »

I think the council should not operate a system if they have no ability to maintain. I will not report this but appreciate your views.

They do, on a reactive rather than proactive basis. Why check up on everyone when only e.g. 1% are complained about? It's simply a waste of resources.

Tiddlypeeps

Tufty wrote: »

There are social houses located in the estate I live in. My mortgage cost vs the social rent is approx per month ( €1,250 vs €200) for the same type house. Now I know the messages back will be about situation and circumstance ect.. But that's not where I'm taking this as I have zero snobbery. The problem I have is that these houses were provided to people who's circumstances deemed it necessary to have housing at a very low cost.

I understand that the council maintain the scheme and are under resourced and don't / can't regularly inspect the properties. In fact probably have no involvement once the rent is paid. If they did they would find one of the occupants spends significant time abroad in a property owned by them leaving this house vacant and the other rents out rooms as an extra income source.

I try to live by the rules. Pay my way and take charges like social / water / green area upkeep hoping that my contribution improves mine and everyone's facilities but it's getting harder witnessing the ongoing local fraud. I would never report it as personally they are not harming me and if they were discovered and punished might cause me to be in personal danger. Also I don't know who the council might replace them with so its better the devil I know and a case of head down keep peddling for me

If you are not willing to do anything about it then what advice are you actually looking for? Or are you just looking for a place to soap box?

Tufty

If I felt that the responsible council employees were maxed out 8 hours a day , 5 days a week with work deemed resourceful I'd go with that. I don't

Tufty

I'm looking to see how the people react to fraud and feel about it. Fraud that is financed by the tax payer.

Michael D Not Higgins

Tufty wrote: »

If I felt that the responsible council employees were maxed out 8 hours a day , 5 days a week with work deemed resourceful I'd go with that. I don't

Maybe alert them to it then and keep 'em busy. I don't see the benefit in your rant about the council and its employees if you only complain about them rather than to them.

Tufty

It shouldn't be a situation where I have to. I explained I am interested in people's reaction to fraud. Fraud paid by the tax payer.

Michael D Not Higgins

Tufty wrote: »

It shouldn't be a situation where I have to. I explained I am interested in people's reaction to fraud. Fraud paid by the tax payer.

Firstly, you don't know it's fraud. Secondly, how much do you think it costs to monitor every council property?

Tufty

I know it's fraudulent to sublet a council property. I've know idea , how much ?

Michael D Not Higgins

Tufty wrote: »

I know it's fraudulent to sublet a council property. I've know idea , how much ?

Again I'll point out that you don't know the full picture and as cerastes said only the council on inspecting the property can make the decision whether it is in breach of their terms.

Let's just say the cost won't get the politician who implements it re-elected.

El_Duderino 09

Tufty wrote: »

I know it's fraudulent to sublet a council property. I've know idea , how much ?

More than its worth to pursue them for it. Build a case, employ legal professional and court system to pursue the case. Then they are in a council house so will probably say they can't pay it back anyway. Revenue rely on tips for this type of crime.

Your choice is to whinge about it or do something about it.

Tufty

That's that then. The fraud continues and the public servants get paid for a job well done. Also an extra days holiday per month to go cash that pay cheque.

El_Duderino 09

Tufty wrote: »

That's that then. The fraud continues and the public servants get paid for a job well done. Also an extra days holiday per month to go cash that pay cheque.

Yep. As long as you sit on the information they need to do something about it.

Tufty

Great. I await the next tax that offsets such fraud and incompident council employees and there schemes.