According to a report in the Irish Sun, Senator Kevin Humphreys stated in the Irish Seanad that the National Lottery may have worked “to defraud our tax system” by helping jackpot winners avoid paying taxes. He urged the Revenue department to investigate the situation. Lotto staff could face a 5-year jail sentence and a $135,000 fine if the charges are found to be true.
A National Lottery spokesperson said its claims procedure was “in accordance with our statutory and regulatory obligations. The National Lottery does not provide professional financial advice directly to our winners but recommends that they seek appropriate and independent advice.” That advice comes from “an experienced team that provide this counseling service to our winners. An important element of our service is guiding them to seek appropriate and independent advice and giving tips on how to choose their professional advisers,” the spokesman said.
We would say, ‘Naturally there’s tax implications on your win. And it’s not just the win, it’s investments, then deposit interest, think about tax or whatever.’ We wouldn’t say, you know, ‘This is what you should do.’ We would say, ‘You should pick good taxation advisers or accountants or legal.’ And, again, if they didn’t have help already, we would normally give them a list of financial advisers. We would normally recommend that they go and talk to just not one, but to talk to a number of them, to see what ones they are comfortable with, and then take them on. So our job is being able to point them in the right directions in terms of more specialist advice. That’s the role we fulfill”
Griffin noted, “We don’t pay for their advisers. That’s naturally something they have to select themselves.”
A Lotto publicity officer added, “Just to clarify, it’s a list of actions that we would normally give to winners, instead of a list of actual professional advisers.”
Irish Sun staff also asked Griffin about the recent case of David Walsh, of Galway, who successfully sued his stepmother Mary Walsh for a share in her $3.58 million Lotto jackpot. Former National Lottery claims manager Eamonn Hughes had told the High Court that he could not recall a 2011 conversation with Walsh, but during cross examination he admitted it was possible he could have advised her to form a syndicate after the win so relatives could avoid gift tax. When Hughes was asked if many syndicates have been formed after a win, he said it “would have happened on a regular enough basis.”
The Irish tax authority only exempts lotto winners from Capital Acquisitions Tax on any windfall; any advice give to retroactively add family and friends to the claim could result in criminal action against National Lottery employees.
