Tax Delinquents' Property-Hiding Schemes Becoming Increasingly Elaborate

[Suwon Ilbo=Reporter Park No-hun] The property-concealment schemes of "tax evader" habitual delinquents—those refusing to pay overdue taxes—grow more sophisticated by the day, yet they repeatedly prove futile before Gyeonggi Province's Regional Delinquency Team. An examination of collection cases against habitual delinquents reveals their activities.

In April of last year, Gyeonggi Province's Regional Delinquency Team visited the residence of habitual delinquent A, living in Gapyeong County, to collect overdue taxes. However, finding no readily seizable property, they were about to leave when a luxury foreign vehicle parked in front of A's house caught their eye, and upon checking the dashboard, they discovered A's wife's business card.

The Regional Delinquency Team contacted the couple and requested to open the vehicle. However, the couple refused, claiming they had no car key. After about an hour of back-and-forth, they finally opened it. While searching the vehicle, the team discovered a cloth bundle in the trunk, and from within it poured various precious metals including gold rings and gold bracelets.

A had anticipated a home search and hidden the items in the trunk. The Regional Delinquency Team seized the jewelry and, through public auction, collected 28 million won in overdue taxes that had accumulated over nine years for A.

There are also cases suspected of fraudulent mortgage registration. Habitual delinquent B, living in Yangju City, Gyeonggi Province, has defaulted on 11 million won in local taxes on 12 cases from 2012 to recently.

However, B, who persisted in claiming "I don't have a single penny," allegedly lent 210 million won to acquaintance C in 2015 for purchasing land in Pyeongchang-dong, Jongno-gu, Seoul, and registered a mortgage on that land. Despite having the ability to pay, B failed to pay the overdue taxes while lending money to an acquaintance.

Acquiring real estate under a third party's name and registering a mortgage is a common asset-concealment tactic used by high-amount tax delinquents. While collection agencies can seize and conduct public auction for typical real estate, such seizure is impossible for third-party real estate.

However, mortgages can be seized, allowing tax authorities to prioritize collection of overdue taxes from distributions to delinquent taxpayer B when the public auction of real estate under C's name proceeds.

There was also a case where taxes were collected through forced opening of a taxpayer's bank safety deposit box. A safety deposit box is a small personal safe rented from a bank to securely store valuables such as currency, securities, and precious metals.

The Regional Delinquency Team identified that habitual delinquent D, who had defaulted on 13 million won over five years, maintained a safety deposit box in the VIP room of a bank located in Apgujeong-dong, Seoul. With the bank's cooperation, they forced it open and seized 100 banknotes of 10,000 yen and tens of millions of won in jewelry.

Even the safety deposit box, which the delinquent had employed as a last resort for concealment, could not escape the net of Gyeonggi Province's Regional Delinquency Team.

Lee Ui-hwan, Director of the Tax Justice Division at Gyeonggi Province, stated: "The principle is that taxes are collected fairly and spent for the benefit of the people. Gyeonggi Province's Regional Delinquency Team will conduct stronger collection activities against habitual delinquents who employ schemes contrary to fair practices, becoming a solid pillar supporting a just world where citizens' rights and obligations are in harmony."

Meanwhile, Gyeonggi Province's Regional Delinquency Team, based on organizational expansion in the seventh popular election term last year, strengthened cooperation between cities and counties, conducted actual condition investigations on 10,213 high-amount delinquents, and collected a total of 101.4 billion won from 4,308 people through home searches and financial asset seizures, among other measures.