You may be aware that during May 14 the IRD went back to the High Court seeking a summary judgement against the accountant John Russell for a “blatant tax avoidance scheme” between the 1970’s to 2000. Russell was alleged to have set up an “elaborate, maze like structure of companies, partnerships and trusts” and provided advice on how others could avoid tax through their participation in the “Russell template”.
When audited the original tax bill under dispute was $5 million due to the IRD reassessing Russell’s personal income saying that he should have declared income of $15.76 million instead of the $298,700.
This case has been back and forth to the courts and the original amount of $5million has, as a result of this being over 25 years, inflated to a staggering $367 million of tax, interest and penalties. Russell has suggested a $1000-a-week proposal; at 79 one would think this is a good option to recover some of the funds outstanding, the alternative would be bankruptcy resulting in little or no recovery.
The case is still ongoing with both parties awaiting a summary judgement as requested by the IRD as well as Russell’s application for a judicial review.
The moral of the story is to sort out tax arrears at the time!