Kerikeri man sentenced to 3½ years’ jail for tax evasion

A former Kerikeri man highly skilled in accounting and information technology who devised a tax evasion scheme involving Maori trusts has been sentenced to three and a half years in jail.

Timothy Vivian Meredith was sentenced in Whangarei District Court on tax offences totalling nearly $500,000 relating to a number of businesses.

Inland Revenue’s Group Manager Investigations and Advice, Tony Morris, said Meredith used the Nga Uri O Tupoto Incorporation bank account with three others to effectively  ”wash” his and their income from various businesses to evade tax.

“Meredith devised a scheme contracting participants ‘personal services’ through the incorporation. No income tax or GST returns were filed and Meredith effectively washed the income through the bank account and it was used by the participants for their personal living expenses,” Mr Morris said.

Meredith knew he was required to file his income tax and GST returns and was aware of the consequences of not doing so, Mr Morris said. He was previously prosecuted in 2007 and made bankrupt in 2008 for failing to file tax returns for an accounting and business mentoring service.

“We take this type of activity extremely seriously and continue to use new tools to identify and combat patterns of offending like this.

“This sort of despicable behaviour really undermines the tax system,” Mr Morris said. “While the vast majority of taxpayers are doing the right thing, there are people like Meredith who think they can get away with ripping off decent New Zealanders.”

The tax Meredith evaded paying would have funded essential services that all New Zealanders benefit from such as schools, roads and healthcare.

Meredith has been declared bankrupt for the second time.

Auckland sales manager sentenced to 3 years jail for tax fraud

An Auckland sales manager who failed to pay tax and dishonestly claimed refunds has been sentenced to 3 years jail.

Paul Thomas Staples was sentenced in Auckland District Court today on a range of tax offences, related to three different companies. The offences, totalling $328,740, occurred between September 2008 and August 2011.

Inland Revenue’s Group Manager Investigations and Advice, Tony Morris, said Staples was aware of his tax obligations, but deliberately ignored them.

Staples filed 28 fraudulent documents including income tax returns and GST returns over the three years. These documents related to three companies, STH Investments, 380 Express and Voltage Security, previously known as First Response Security Services.

“STH Investments was a property investment company, while 380 Express and Voltage Security provided security service,” Mr Morris said.

“Staples knowingly provided false information to Inland Revenue claiming tax refunds he was not owed. He forged documents to accompany his tax returns with the intention to evade tax.

“The majority of taxpayers do the right thing and supply us with the correct information. We take criminal activity extremely seriously and continue to use new tools to identify and combat patterns of offending like this,” he said.

“The tax Staples didn’t pay would have gone towards vital Government services that we all rely on, such as hospitals, schools, roads and welfare.

“This outcome sends a warning to those who think they can try to cheat the system that they will be caught and punished,” said Mr Morris.

Media contact:

Michelle Smith

04 890 4630, 029 890 1380

Michelle.Smith@ird.govt.nz

Taranaki retailers sentenced to jail for hiding millions in cash sales

Former New Plymouth retailer Jianbin Wang has been jailed for 3 years 9 months for failing to declare millions in cash takings, while his wife Fenglan Liu received 2 years 3 months in prison.

The couple operated three low-cost Best 4 Less retail stores in New Plymouth, Waitara and Wanganui, but failed to pay income tax or GST on a large part of their takings between September 2007 and September 2012.

Inland Revenue Investigations and Advice Group Manager, Tony Morris, said Wang and Liu’s offending was a blatant case of people who foolishly think that they can get away with not paying their fair share of tax.

“This is tax evasion at the most extreme end of the spectrum,” Mr Morris said.  “Our investigators have calculated that cash sales in excess of $2.5 million weren’t declared over the five years of offending. This meant the businesses evaded paying more than $1 million in tax.

“It also enabled the couple to repay a $380,000 mortgage in just two years, all while they were claiming Working for Families Tax Credits because of their supposed modest personal income,” Mr Morris said.

Because the couple failed to declare the business’s full earnings, Wang’s personal income tax liability was also significantly under-reported. He evaded paying more than $1.1 million in GST and income tax, and received more than $50,000 in Working for Families Tax Credits.

After Inland Revenue commenced prosecution action against them, Wang and Liu sold their New Plymouth home and Wang sold his three businesses, forwarding much of the proceeds to bank accounts in China. They also withdrew large sums of cash from ATMs and banks throughout the North Island.

“This sort of despicable behaviour really undermines the tax system,” Mr Morris said. “While the vast majority of taxpayers are doing the right thing, there are people like Wang and Liu who think they can get away with ripping off decent New Zealanders.

“The taxes this couple didn’t pay to Inland Revenue would have gone towards vital Government services, such as hospitals, schools and welfare,” he said.

Wang had earlier pleaded guilty in New Plymouth District Court to 42 charges of personal tax fraud and 16 charges relating to company taxes for Top International Trading Limited, but had disputed the amount of the fraud. Liu was found guilty on 16 tax evasion charges but not convicted in relation to the later alleged tax offences.

Media contact:

Pete van Schaardenburg

04 890 1698, 021 348 696

peter.vanschaardenburg@ird.govt.nz

Wellington company director gets home detention for tax offences

A Wellington security company director who evaded paying nearly $1 million in tax has been sentenced to eight months’ home detention.

Paul Cornel Coffey was sentenced in Wellington District Court today after being found guilty of 79 tax offences relating to two security companies.

Inland Revenue’s Group Manager Investigations and Advice, Tony Morris, said Coffey was clearly aware of his tax obligations, but deliberately ignored them. He didn’t file GST returns and failed to pass on PAYE deductions from his employees’ wages during a three-and–a-half year period.

“Coffey simply decided he didn’t have to pay his fair share of tax like everyone else, and pocketed the GST he charged his clients and his employees’ PAYE. He used this money to live the high life, spending up large on overseas travel, restaurant meals and fast cars, including $165,000 on an Aston Martin,” said Mr Morris.

“Coffey’s actions completely undermine our tax system. While the majority of taxpayers do the right thing, there is a minority who think they can get away with ripping off honest New Zealanders.

“The tax Coffey refused to pay would have gone towards vital government services that we all rely on, such as hospitals, schools, roads and welfare,” said Mr Morris.

The core tax he failed to pay was just under $900,000, but amounted to more than $1.5 million including penalties and interest. 

Coffey has also been ordered to pay $20,000 in reparation and serve 280 hours of community work. The offences occurred between January 2008 and June 2011 and related to security companies trading as IMS and Alligator.

Media contact:

Pete van Schaardenburg

04 890 1698, 021 348 696

pete.vanschaardenburg@ird.govt.nz

Patrick Renshaw gets 10 months’ home detention for tax evasion

Lower Hutt tax advisor Patrick John Renshaw has been given 10 months’ home detention for tax offences.

Renshaw was sentenced in Wellington District Court today after having earlier pled guilty to 42 tax charges involving non-payment of PAYE deductions and filing false GST and income tax returns, amounting to more than $345,000.

Patrick Goggin, Inland Revenue’s Group Manager of Investigations and Advice, said Renshaw devised a complex web of transactions involving multiple entities that were a calculated attempt to defraud the tax system.

“Renshaw filed false GST returns relating to five fictitious property purchases and a vehicle for which he claimed GST input credits totalling more than $155,000,” Mr Goggin said.

“In addition, he claimed management fees for services purportedly performed by his accountancy and tax return firm Resource Management Research Services Limited (RMRSL) for four associated entities which were never performed or paid for, enabling those entities to make false tax refund claims totalling $26,112.55.”

Renshaw also failed to pay more than $90,700 in PAYE deductions made from employees’ earnings at RMRSL. 

“These actions were dishonest and a fraud on not only Inland Revenue, and therefore the community, but also the affected employees, who should be able to expect that tax deductions from their wages are dealt with lawfully.

“The offending is even more deplorable, due to the position of trust held by Renshaw as a tax agent.”

Inland Revenue devotes considerable resources to the detection and investigation of potential tax offending and will not hesitate to bring cases before the courts when dishonesty is found, particularly where the perpetrators hold themselves out to the community as tax experts or tax advisors, Mr Goggin said.

Renshaw has been ordered to pay reparation of $13,000 in instalments and a lump sum of $2,500.

Media contact:

Pete van Schaardenburg

04 890 1698, 021 348 696

peter.vanschaardenburg@ird.govt.nz

“Just be honest mate and pay your tax,” say tradies

A survey of Auckland tradespeople shows an Inland Revenue campaign highlighting cash jobs has hit home, with four in five believing they’ll get caught if they cheat on their taxes.

The survey of nearly 420 tradies followed an advertising campaign in Auckland during April and May, with the message that tradespeople need to declare all their income, including cash, “or risk everything”.

Inland Revenue’s Group Manager Investigations and Advice, Patrick Goggin, said the survey results show that the message that doing under-the-table jobs is a tax crime is getting through.

“There was a high level of awareness of the campaign, with nearly two-thirds of tradies recalling it and more than half considering it was relevant to all tradespeople. That’s a great result for what was only a trial campaign,” Mr Goggin said.

The survey showed more tradies agreed that if they cheat on their tax, it is likely they’ll get caught, when compared to a similar survey in 2012, he said.

“This year half of tradies agreed with that statement, compared to just over a third back in 2012. That shows tradespeople do realise Inland Revenue will take action if it finds out they’re not declaring all their income.”

Mr Goggin said while the majority of tradespeople “do the right thing” by paying their taxes, there’s a minority who are cheating the system and ripping off taxpayers.

“Unfortunately our survey found that in the Auckland region, there’s anecdotal evidence that up to a quarter of building and construction involves under the table work. If that’s true, that’s a lot of tax not being paid and that would have funded vital services we all benefit from such as schools, hospitals and social services.

“I think what’s encouraging though is that tradies are talking about their tax obligations with their mates in the industry and with their customers. And most are saying it’s no longer okay to do work for cash and not declaring it.

“Some of the comments they told us were: ‘About time IRD cracked down on it’, and ‘Just be honest mate, and pay your tax’. And more than three-quarters of respondents disagreed with the statement ‘I don’t think of tax cheating as a real crime’.”

Mr Goggin said although Inland Revenue had identified the building and construction industry as being a high risk for tax evasion, all levels of tax evasion from any industry were treated very seriously.

Media contact:

Pete van Schaardenburg

04 890 1698, 021 348 696

peter.vanschaardenburg@ird.govt.nz

Auckland tradesman sentenced to 10 months home detention for tax evasion

A recidivist Auckland tax cheat has been sentenced to 10 months home detention and ordered to pay $92,400 reparation, following a second conviction for tax evasion offences.

Sonny Te Kanawa Walker, a 50-year-old carpet layer, was sentenced at Manukau District Court on a range of tax evasion offences, including not filing tax returns and not accounting for GST and income tax for six years.

Inland Revenue Group Manager, Investigations and Advice, Patrick Goggin said Walker’s offending was calculated, deliberate and inexcusable.

“Walker was clearly aware of his tax obligations and he wilfully chose to ignore them. He had already been convicted of these types of offences once before so there was no way he didn’t understand his responsibility to file returns and pay tax,” Mr Goggin said.

“By pocketing all of his income, he made a conscious decision he did not need to pay his fair share of tax while other honest New Zealand taxpayers did.”

Walker worked as a self-employed carpet layer since 2004, charging clients for his labour and GST. In 2009 he was prosecuted by Inland Revenue for similar tax evasion offences, yet continued to offend.

“This sort of behaviour completely undermines our tax system, which is based on voluntary compliance,” said Mr Goggin. “While the majority of taxpayers do the right thing, there is a few like Walker who think they can hang on the coattails of others and get away with not paying.

“That money Walker should have paid would have gone towards vital Government services that we all rely on, such as hospitals, schools and welfare.”

Mr Goggin said Inland Revenue was working hard to make sure tradespeople were aware of their tax obligations. A survey of tradies after a recent marketing campaign showed those who thought that cheating on their tax was a crime had increased by 40% since 2012. 

The amount of unpaid tax from the combined offending, including penalties and interest, is more than $440,000.

Media contact:

Michelle Smith

04 890 4630 029 890 1380

Michelle.Smith@ird.govt.nz