Agency came into being as part of the offensive against paramilitaries

The assessment comes from the Assets Recovery Agency, which has been investigating his activities.

The agency was set up to target the proceeds of organised crime.

The man's identity has not been revealed. The police referred the case to the ARA which carried out an extensive investigation.

Under the Proceeds of Crime Act 2002, the ARA can assume the role of the Inland Revenue if it believes someone's income comes from crime.

It said that in this case, issuing tax assessments was the most appropriate course of action.

Special commissioners

The agency said the amount owed excluded interest and penalties.

Interest accrues on a daily basis from the date the tax was originally due.

The man now has 30 days to lodge an appeal.

The appeals process may involve negotiation with the agency's tax advisers or may necessitate a hearing before the Special Commissioners of Income Tax.

If no appeal is lodged within 30 days, the agency begins enforcement.

Interest and penalties which may be imposed - carried out in line with Inland Revenue practices - can often amount to an additional 50% of the amount assessed.

The agency came into being in February 2002 as part of the government's offensive against paramilitary groups who make money out of fuel and cigarette smuggling, counterfeiting, robbery and drug dealing.

It has been given a target of seizing �60m by 2004/5, and has the power to seize assets and impose taxes.

New legislation also enforces those targeted to prove their money is legitimate.