Fraudulent Tax Agent Sentenced

October 14, 2010 New Zealand Taxation

236/365 doing the sumsAn Auckland-based tax agent who knowingly filed false tax returns on behalf of her clients has been sentenced to nine months home detention, after pleading guilty to multiple tax fraud charges.

On October 8th Isobel Dick was sentenced to home detention after pleading guilty to five charges surrounding GST and income tax returns that she filed for her clients. She allegedly claimed several of her clients’ non-business related expenses as legitimate business costs on their tax returns, including holidays to Fiji and Bali, jewellery, clothes, groceries, private entertainment, mortgage payments and vet bills. According to the Inland Revenue Department (IRD), over the period from 1999 to 2002 she was responsible for NZD 758 732 worth of tax discrepancies.

The IRD claims that Isobel Dick operated a relatively small tax agency, with only 35 clients, the majority of whom were sole traders or small companies. She instructed her clients to provide her with all of their personal and business receipts, most of which were claimed to be business related, regardless of their nature. Reportedly, none of the clients were aware of Isobel Dick’s actions on their behalf.

Jonathan Matthews, IRD Investigations Manager of Assurance, said that tax agents are expected to hold the highest standards of honesty, and Mrs. Dick’s actions “displayed the complete opposite behavior.” He commented further, saying that she knowingly filed fraudulent returns, and subsequently ‘was ripping off other honest tax payers.”

Photo by obo-bobolina