irish life - right or wrong

[CCOVICH]

Yes I think that Conan has hit the nail on the head regarding the standards on which brokers and financial institutions are being judged. They can only be held responsible for aiding taxpayers evade tax if the regulations in force at the time made it an offence for them not to enquire as to the source of funds the customer was investing.

I would tend to argue that IL believes (rightly of wrongly) that they have nothing to fear from this Revenue investigation (of course some of their customers might), otherwise why would they not choose to co-operate? Like I said before though, only time will tell if this stance proves to be brave or stupid.

As to the argument about building in provisions for future losses into flotation prices, I don't agree. I don't see how this would work in practice.

 

[ubiquitous]

I doubt if Irish Life have much to fear from this investigation. After all the banks that were implicated as direct accessories to deliberate evasion via the offshore and bogus account scams got off with a slap on the wrist when their wrongdoing was exposed. There is no evidence whatsoever (so far, at least) that Irish Life set out to facilitate evasion. The fact that some people may have misused their policies or products to evade tax is neither here nor there. I don't see Nissan or Toyota being implicated any time someone uses one of their cars to kill or maim on the roads.

The previous investigations produced much fear and anxiety among thousands of innocent people, with absolutely no tax arrears or other evasion issues, who received standard notifications from the banks warning of impending doom if they did not take specified actions before certain dates.

Irish Life have obviously calculated that there would be negative customer relations implications for them were they to do likewise, as the vast majority of their sales products involved the genuine investment of tax paid money. Prominent finance experts and commentators such as Moore McDowell reckon that 90-95% of such investments were in this category.

In that sense Irish Life are perfectly entitled to decide not to do the Revenue's dirty work for them if they so wish.

 

[extopia]

As to the argument about building in provisions for future losses into flotation prices, I don't agree. I don't see how this would work in practice.

Eh, it's not something that requires intervention. It's the principle that share prices take into account all the information in the marketplace.

 

[Sumatra]

This sort of thing happened in France and they brought in legislation putting the onus on the seller to identify not only the person but the proceeds.

 

[CCOVICH]

Eh, it's not something that requires intervention. It's the principle that share prices take into account all the information in the marketplace.

But if the information isn't in the marketplace (as it wasn't when any of these semi-states floated), how is it supposed to be reflected in the share price? I have enough knowledge of capital markets to know how companies are valued, thank you very much .

Someone mentioned prize bonds earlier

http://www.rte.ie/business/2005/0420/prize.html

So this regulation was actually introduced, and was then scrapped as a result of lobbying??

 

[extopia]

But if the information isn't in the marketplace (as it wasn't when any of these semi-states floated), how is it supposed to be reflected in the share price?

Wasn't it?

 

[CCOVICH]

It wouldn't be news now if it was.

 

[RainyDay]

Wasn't it?

Extopia is dead right - The dogs in the street knew that the insurance companies were facilitating tax evasion in the 'good old days'. Isn't it the duty of anyone buying a share in a company to consider what hidden liabilities could hit the share price in the future?

All these coy, carefully phrased, selective answers on this thread don't hide the important facts - that those selling the products knew exactly that they were facilitating tax evasion.

 

[GreatDane]

Come on Rainyday

We can't tar them all with the same brush, to be fair.

I feel we must follow the old tradition, of innocent until proven guilty & with that in mind, Irish Life & Permanent must be given the benifit of the doubt until such time as it's proven otherwise.

(for the record, I'm not saying that I beleive every life & pensions sales person was squeeky clean btw, just cant prove which ones were or were not at the moment )

Cheers

G>

 

[RainyDay]

I feel we must follow the old tradition, of innocent until proven guilty & with that in mind, Irish Life & Permanent must be given the benifit of the doubt until such time as it's proven otherwise.

But they haven't been convicted of anything - they've just been asked to co-operate with a Revenue enquiry. To say that 'innocent until proven guilty' has to apply before they have to cooperate with an enquiry is to create a charter for tax evaders. Let's make it a bit harder for tax evaders, not easier....

 

[CCOVICH]

So Rainy Day and extopia (and the dogs in the street) know exactly what has been going on in the world of Irish Finance for the last 25 years (and possibly longer by the sounds of things). Looks like you are the ones who have been facilitating tax evasion then, by sitting on this inside knowledge. I do love it when people make sweeping generalisations.

 

[extopia]

Huh? What did I say? I was only talking about efficient market theory (I don't make this stuff up myself). It's basic economics.

 

[ubiquitous]

The cost of a mailshot to all past clients of Irish Life would be chickenfeed in the general scheme of things for a company the size of Irish Life. I have never heard of the mailshots under the previous investigations having any sort of material effect on the profits of AIB, NIB, BOI etc. (You would pay for a lot of stamps and stationery for the price of even a minor advertsing or sponsorship campaign). So the question of whether the cost of a single mailshot should have been factored into the Irish Life flotation process several years ago is absurd.

However it is equally absurd to allege that Irish Life have facilitated tax evasion on the basis that a small percentage of their customers have used their products for nefarious purposes, and to conclude therefrom that all their past customers (including the 90-95% in the tax compliant category) should now be subject to investigation.

 

[CCOVICH]

Huh? What did I say? I was only talking about efficient market theory (I don't make this stuff up myself). It's basic economics.

But are you saying that this knowledge of potential tax evasion was in the market/public knowledge back when IL floated? If not, fine, disregard what I said.

 

[z107]

they've just been asked to co-operate with a Revenue enquiry.

I believe they most certainly should not co-operate. Why on Earth should this organisation be forced to fork out even one cent for this investigation?

Maybe I should get the Revenue to do my next mail shot.

 

[Conan]

It's not just the cost of 300,000 stamps. It's also about the time/administrative cost of identifying clients going back over 20 years, many of whom may not be clients now. And what about clients who have changed address in that 20 years or clients who are long deceased?

Conan

 

[RainyDay]

It's not just the cost of 300,000 stamps. It's also about the time/administrative cost of identifying clients going back over 20 years, many of whom may not be clients now. And what about clients who have changed address in that 20 years or clients who are long deceased?

Conan

I don't think anyone has suggested that IL needs to dig up the dead bodies. How about they just send the notices to the last known addresses - Is that too much to ask, given the fees they will have creamed off the hot money policies over the years.

 

[z107]

How about they just send the notices to the last known addresses - Is that too much to ask,

Yes, on three counts I can think of.

1. Cost of mailshot. Irish Life is a business, not a charity. Many civil servants don't seem to understand the most basic of business principles.

2. The revenue aren't exactly the most accommodating of organisations. I don't see why any company should facilitate them if they don't have to.

3. Matter of principle. Presumably (according to certain posts in this thread), the revenue has known about this issue for over two decades. Only now, when the interest and fines etc have built up do they decide to take action.

Many Irish Life customers provided their contact details for a specific reason. I wonder how the data protection act holds up to this?

 

[GreatDane]

Extopia is dead right - The dogs in the street knew that the insurance companies were facilitating tax evasion in the 'good old days'....

Rainyday,

I was referring to the comment above, just incase you were a little unsure when you last responded to me

 

[RainyDay]

Yes, on three counts I can think of.

1. Cost of mailshot. Irish Life is a business, not a charity. Many civil servants don't seem to understand the most basic of business principles.

Oh let's get real here. The costs of this mailshot would be a drop in the ocean for Irish Life. They wouldn't think twice about sending a mailshot if they had a nice new product to market to this audience. Let's not pretend that cost is a real issue here.

2. The revenue aren't exactly the most accommodating of organisations. I don't see why any company should facilitate them if they don't have to.

Now we're getting to the nub of the issue. No-one likes Revenue. No-one likes paying taxes. But everyone likes whinging about their granny being on a trolley for 3 days. So here's the thing. If you want public services, you gotta pay for them. If you want a fair society, you need Revenue to enforce the legislation.

3. Matter of principle. Presumably (according to certain posts in this thread), the revenue has known about this issue for over two decades. Only now, when the interest and fines etc have built up do they decide to take action.

So you are saying tax evaders should effectively have a 'service level agreement' with Revenue, i.e. if Revenue doesn't catch me within x years, then I've got away with it. Why would you want to encourage tax evasion in this way?

Many Irish Life customers provided their contact details for a specific reason.

For what specific reason? For administering the policy, of course. And being informed about issues of tax liability comes under this heading.

Maybe Revenue should walk away from the whole mailshot idea and start really playing hardball. The mailshot was to give tax evaders a chance to come clean up front, minimise penalties and avoid publication. This is surely to the benefit of the evaders. Maybe Revenue should just get their court order, get the relevant data from IL, and start auditing each & every one of these individuals with full interest, penalties and publication in each case.