April/May IRD cases in the courts

Inland Revenue plays a critical role in improving the economic and social wellbeing of New Zealanders.  The IRD collects and distributes more than 80% of the Crown’s Revenue and collect and distribute social support payments.

Paying tax helps pay for the public services we all rely on like education, health and roads.

Sometimes people intentionally choose to participate in the hidden economy; don’t declare all their income; and try to get tax refunds they’re not entitled to.  Where the IRD finds this, they take appropriate action.

Here are the cases that have been through the courts in April and May.

Commissioner of Inland Revenue v Eric Francis Calvert 31 May

An Upper Hutt electrician has been sentenced to 11 months home detention and ordered to pay $20,000 in reparations on 56 charges of aiding and abetting City Electricians evade tax.

Eric Francis Calvert was in charge of the management, finance and tax affairs of City Electricians which deducted PAYE, KiwiSaver, student loan and Child support payments from wages but didn’t pass them on to Inland Revenue from 31 October 2011 to March 31 2017.

The company was placed into liquidation by the High Court in May 2017 with a total estimated to all creditors of $887,270.

Commissioner of Inland Revenue v Rachelle Suzanne Wood 24 May

Canterbury woman Rachelle Suzanne Wood has been sentenced to 2 years, 6 months in prison for aiding and abetting Nan and Gran’s Food bar which claimed nearly $250,000 in GST refunds they weren’t entitled to.

Wood leased a business unit in 2014 which wasn’t built until June 2015. Trading didn’t begin until September that year and the business was sold as a going concern in April 2016.

The GST returns filed by Wood weren’t supported by business records or bank statements. Inland Revenue analysis of Nan and Gran’s business account and the private bank accounts held by Wood and her husband show that GST refunds from the business have predominantly been used for personal expenses.

Commissioner of Inland Revenue v Colin George Ackroyd 23 May

A Rangiora man, Colin George Ackroyd, was has been fined $6,000 by the Christchurch District court on 30 charges of failing to furnish GST and income tax returns.

Ackroyd ran a business along with Margaret Anne Ackroyd as sales agents. He didn’t file GST returns from 2014 until 2018 and didn’t file income tax over the corresponding five years.

He was contacted several times and asked to file returns, which he said he would do. However, no returns were forthcoming, and a final notice was sent. His wife, Margaret Ackroyd, who was also facing 30 charges, was convicted and discharged.

Commissioner of Inland Revenue v Clive Rex Baker 22 May

A New Plymouth builder, Clive Rex Baker, has been sentenced to 6 months home detention plus 175 hours community work for failing to pay employees’ deductions to Inland Revenue.

From April 2014 Baker stopped declaring and paying the deductions on time and then stopped altogether.  Until then he had been on time with his tax affairs.

There were just over $300,000 of unpaid taxes owing. Baker told IR he didn’t pay the deductions because his business had cashflow problems.

Commissioner of Inland Revenue v Reynaldo Hilaga 17 May

Christchurch cleaning company director Reynaldo Hilaga has been fined $7,725 on 27 charges of aiding and abetting his company which failed to file tax returns to Inland Revenue.

Immaculate Living Ltd failed to file PAYE returns from October 2015 to November 2017.  It also failed to file GST returns from September 2015 until September 2017.

Inland Revenue tried to contact the company and Hilaga personally several times with no response.  A final notice was sent in December 2017 advising that legal action would be taken.

Commissioner of Inland Revenue v Marcie Wales 10 May

One of the directors of a tree cutting and heat pump company has been sentenced to 8 months home detention plus $5,000 in reparation on 63 charges of tax evasion.

Christchurch-based Marcie Wales was charged with aiding and abetting Treecorp companies in Christchurch, Wellington and Taranaki.

She was responsible for the PAYE affairs for each of the companies. $153,232.65 was deducted from wages over 26 months but wasn’t handed on to Inland Revenue.  An analysis of bank accounts showed wages were sometimes paid in cash and preference was given to trade creditors.

Commissioner of Inland Revenue v Russell George Best 3 May

Auckland company director Russell George Best has been fined nearly $3,000 for aiding and abetting his company to evade GST and income tax.

Best faced 21 charges in total – 13 in regard to not filing GST returns and 8 for not filing income tax returns.

Reminder notices were sent to him and IR contacted Best on two occasions when he said he would file the returns. When nothing was filed a final notice was sent reminding him of his obligations and he was told legal action would be taken.

Commissioner of Inland Revenue v Dahlia Naepi 18 April

A major shareholder in Pasifika Integrated Health Care Limited has been sentenced to 11 months home detention on tax fraud and tax evasion charges totalling more than a million dollars. Dahlia Naepi was sentenced on April 18th.

Naepi had complete oversight of the operations of the company and ultimate responsibility for compliance with its tax obligations.  The offending amounted to $1,271,322.81 some of which was paid after Naepi sold her home.  The total amount that remains unpaid is $479,188.75.

As well as home detention, Naepi was ordered to pay $60,000 at $1,000 per month over 5 years.  Pasifika Integrated Health Care Limited is now in liquidation.

Commissioner of Inland Revenue v Stephen Goble 12 April

The director of 2 Wellington companies, Stephen Gordon Goble, has been fined $2,000 and ordered to pay court costs of $130 on a charge of refusing or wilfully neglecting to appear before the Commissioner of Inland Revenue to give evidence.

Goble had been required to appear before the Commissioner to answer questions about returns filed by the companies, and to provide records to substantiate the expenses claimed in the returns.  He only did so a number of months after being charged.

Inland Revenue had been unable to progress its investigation of the companies without the information.  Goble had previously not complied with a Court Order to provide other information to the Commissioner, and had been held in contempt of court as a result.

Commissioner of Inland Revenue v Sean Rhyse Edmonds 11 April

The director of a former Whanganui shearing gang has been sentenced to 10 months and 2 weeks home detention and 200 hours community work for failing to pay employees’ tax deductions to Inland Revenue .

Sean Rhyse Edmonds faced 56 charges of aiding and abetting his wife, and two companies, to make PAYE deductions but not pass the money on to Inland Revenue.  He also faced 1 representative charge aiding and abetting one of the companies to evade tax by filing false returns.  The total amount unpaid against his name is $354,235.95.

Edmonds’ wife, Te Waimoko Jacqueline Edmonds, was earlier this year sentenced to 7 months home detention and 120 hours community work 40 charges.

Commissioner of Inland Revenue v Vincent Teremoana Peters 11 April

A former security guard and company director has been sentenced to 13 months in prison for evading or attempting to evade personal income tax and GST.

Vincent Teremoana Peters was sentenced in the Manukau District court on April 11. Peters was earning income and GST; knew he had to file income tax and GST returns but chose not to do so.

The total tax evaded was $159,696.82 none of which has been paid by Peters.

Commissioner of Inland Revenue v Jillian Rosemarie Scott 5 April

Former chartered accountant Jillian Rosemarie Scott was sentenced to 6 months Community detention, 300 hours community work when she appeared in the Hamilton District Court on April 5. She was ordered to pay $53,000 in reparation which was on top of the $45,000 paid prior to sentencing.

Over a 6-year period, Scott and two of her brothers set up a complex scheme to evade taxes and obtain fraudulent refunds from Inland Revenue.  They set up limited companies, charitable trusts and societies, which were then used to buy houses and claim GST refunds.

They also used the entities to make it look like they were making charitable donations and claimed charitable donation rebates. Altogether Jillian Scott claimed $101,366.00 and received $88,879.57 in various refunds. The charges against brothers Lindsay and Roger Scott have still to be heard.

From the IRD News website | © Copyright 2020 Inland Revenue.