• Undeclared income prompts voluntary disclosure
• Community detention for fraud
• Home detention for tax fraud
• Jail sentence for false GST claims

Most people meet their obligations but we know there will always be a degree of non-compliance in some areas. For the few people who choose not to comply, we will act firmly.

Undeclared income prompts voluntary disclosure

Customers are required to declare all of their income, including income from foreign sources or held in overseas structures which they control.

Recently, a customer living in New Zealand received income from overseas, but failed to declare it.

Our information showed the customer had funds with a foreign bank. We contacted the customer and reminded them of their obligations, and they chose to make a voluntary disclosure to put their tax affairs right.

Failure to declare offshore income or make appropriate disclosures to Inland Revenue can attract serious penalties. However, because the customer made a voluntary disclosure the penalties were significantly reduced.

Community detention for fraud

An Auckland taxpayer was sentenced to five months community detention and 200 hours community work after pleading guilty to four charges of using a document to gain pecuniary advantage and eight charges of using a document with intent to defraud.

For several years the taxpayer had been using a false identity to apply for Working for Families Tax Credits they weren't entitled to. The taxpayer was investigated and admitted using different IRD numbers to gain the extra payments.

They later admitted a further 12 charges, including claiming for a child who did not have residency, declaring a lower income than they received to increase family assistance rates and claiming for a child who had left the taxpayers care.

The fraudulent claims totalled $62,689. However, with use of money interest added to the fraud, the total amount of reparation was $95,293.

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Home detention for tax fraud

An Auckland builder was sentenced to 10 months home detention and 400 hours community work after admitting 121 charges of tax evasion and fraud involving just under $235,000.

The builder was found guilty of 19 charges of failing to account for GST, 19 charges of failing to file GST returns, three charges of failing to account for PAYE, four charges of failing to file PAYE returns, 33 charges of failing to pay withholding tax, 33 charges of failing to file withholding tax returns, and 10 charges of false invoicing.

The taxpayer deliberately withheld money from Inland Revenue and consistently failed to file returns between March 2006 and November 2008. The builder was also trading under the name of a company that did not exist.

Further investigation found the builder had used a bank account under a different name to conceal money from various sources as payment for work. The builder also issued tax invoices using two different IRD numbers, including someone else's.

Jail sentence for false GST claims

A Tauranga property developer was jailed for two and a half years for tax evasion and dishonesty after being found guilty of five charges of providing false GST returns to obtain a refund, deliberately failing to file a GST return, and dishonesty regarding the use of a document.

The developer made false claims through two entities they were involved in, including the alleged purchase of a property they were living in. An audit found this transaction never took place.

They had also requested two further GST refunds in 2007 and 2008, regarding three property transactions which hadn't occurred.

It's estimated the taxpayer illegally obtained over $135,000, failed to pay nearly $37,000 GST on her business sales, and attempted to claim a further $60,388 by filing a false return.

 

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