Tenants of a Dublin couple against whom tax judgments of more than €3 million have been made were told to leave their rent in an envelope in cash at a launderette the couple owned on Talbot Street, Dublin 1.
Paul Howard and his partner, Una McClean, of Larkfield Avenue, Harold’s Cross, Dublin, built up a property portfolio in Dublin during the boom years, were involved in property development in Turkey, and ran a launderette, Clean City, on Talbot Street, but kept huge amounts of cash at home rather than put it in bank accounts.
A decision against Howard by the Tax Appeals Commission in August 2021 noted that he had an estimated gross income of €2.38 million during the 12 years to 2014, but declared an income of €409,725.
“There was no evidence that any of the derived income from the rental property was lodged into any bank account,” the decision said.
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During part of the period, Howard claimed he was tax resident in Turkey while his partner and children lived in Ireland, but the Revenue did not accept this.
He told a hearing of the commission in July 2021 about moving cash from Turkey back to Ireland. “I would have brought cash back. If my family and friends was visiting me they would have brought cash back for me too,” he said.
Asked why he did not lodge cash income to a bank account, he said: “I had plenty of money in me account, I probably didn’t need to put more in, as you see, I kept the cash in my house, or whatever.”
Howard said his practice of keeping cash at home might explain why his bank accounts did not show expenditure for items such as fuel, groceries or leisure activities. “I live a very boring life,” he said. He confirmed he had a holiday home in Turkey and, up to recently, a mobile home in France.
An email about rent being paid in cash was sent to the Revenue’s Good Citizen tax evasion reporting system in 2009, sparking the inquiry into the couple.
“The rent payments are made by two methods,” the email said. “The tenants leave the collective rent in an envelope in their respective apartments in the kitchen and Mr Howard lets himself in at the start of each month and personally picks it up, usually when the tenants are not present.
“The second method, which some tenants use, is to go directly to Mr Howard’s business, Clean City on Talbot Street, on the first of every month and hand the rent in directly to the employee at the counter.”
Asked about the email at the 2021 hearing, Howard confirmed its accuracy.
On Tuesday, the High Court found against the couple in a legal challenge and confirmed a tax bill of €2.3 million in tax and interest against Howard and one of €625,513 against McClean.
In his judgment, Mr Justice Michael Quinn noted the assessments against Mr Howard concerned the period from 2002 to 2014.
The aggregate amount of those assessments, plus €99,257 surcharges, was some €1.19 million, and Mr Howard made payments totalling some €7,839, he said. Corresponding assessments were raised against Ms McClean for a total €317,918, and she made payments of €15,382.
The assessments were unsuccessfully appealed to the Tax Appeals Commission, and a final demand for payment was served in October 2021 on Mr Howard for some €1.2 million. He applied for phased payment, proposing a down-payment of €302,675, followed by 36 monthly payments of €25,223.
His current business activity was stated to be cleaning services, with an increase in revenue and cash flows expected soon. It was stated that the taxes had not been paid because “a cash deficit was caused due to low sales activity”.
Ms McClean made a similar phased payment application, but neither application was accepted and judgment proceedings were initiated.
The judge rejected a claim of champerty – an offence whereby a third party, with no interest in the litigation, gives assistance to a party in litigation in return for a share in the proceeds of that litigation – made by the pair. He said Revenue has the duty to collect all taxes for the Central Fund.
Barrister Shelley Horan, for the Revenue, told the commission in 2021 that the couple were selling property while they contested the assessments, and that the appeal was part of a “ploy” by the couple to frustrate the Revenue.
Details of the appeal hearing and its outcome are contained in legal documents associated with a successful injunction application in 2021 to stop Howard selling property.
Howard (52), told the commission hearing that he bought his first property, on Parkhill Way in Dublin 24, when aged just 18.
“Some money was left from my father, who passed. And then I got into the rental property, and then I remortgaged, topped up, doing what I had to do, made some money,” he said.
Howard and McClean had a property portfolio that included apartments in Mountjoy Square, buildings on Talbot Street, and a house at Larkfield Park, Harold’s Cross, Dublin 6. Property worth more than €1.5 million was sold between 2018 and 2021 by the couple, according to the Revenue submission to the commission.
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