IRD chases $367m tax debt

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IRD chases $367m tax debt

Accountant’s original bill of about $5 million soars with penalties and compound interest.

Inland Revenue has gone to the High Court seeking a judgement against John George Russell for a $367 million alleged tax debt.

The 79-year-old accountant developed the Russell template, which the Court of Appeal called a "blatant tax-avoidance scheme".

Between the late 1970s and 2000, Russell established what the same court said was 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.

The IRD argued that through the use of a partnership, Russell avoided paying tax on income earned through Russell template transactions.

It reassessed Russell's personal income and said he should have declared income of $15.76 million between 1985 and 2000 instead of $298,700.

This assessment was upheld by the High Court in 2010 and Russell failed to overturn it when he took the case to the Court of Appeal in 2012.


Russell's original tax bill was around $5 million, but penalties and compound interest over 25 years inflated it to $138 million at the time of his High Court case and in excess of $177 million when he went to the Court of Appeal.

In September last year, IRD demanded a payment of $367 million of tax, interest and penalties from Russell. Inland Revenue then applied for summary judgement in the High Court against Russell for this amount, which was heard yesterday by Associate Judge Jeremy Doogue in the High Court at Auckland.

IRD lawyer Pauline Courtney said Russell had not paid the amount demanded and had no defence to the claim. The court heard that Russell had last Friday filed for a judicial review of an IRD decision rejecting his proposal to pay back $1000 a week for the rest of his life. Russell first suggested this in 2006.

Courtney said this was another way to delay the case and argued the bid for judicial review did not prevent the court from entering summary judgement.

Russell's lawyer, Simon Judd, opposed the IRD's application and said his client had no assets or ability to pay $367 million.
The $1000-a-week instalment proposal was the best way to maximise recovery of outstanding tax, Judd said. The purpose of the IRD's enforcement action was not to recover money but to bankrupt Russell, the defence lawyer said.

Judd indicated he would file for interim relief today to either stay the summary judgement proceedings or any other enforcement action by IRD, pending the judicial review.

Following discussion on whether it was appropriate or not to defer his decision until after the judicial review, Associate Judge Doogue reserved his decision on the summary judgment.

- NZ Herald

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原先只有5百万的税款， 但因为与IRD argue拖了25年现在变成了3亿6千7百万。而且这个官司被告是必输无疑的。

朋友们呢， 如果你们炒房应该交税而不交税的话，你们从这个案子中应该得到什么启示呢？

阿海

估计ＩＲＤ是拿不到那么多钱的。

这洋人一定会把财产藏的很好，顶多自己申请破产，然后继续住豪宅里开开心心。

Lease

阿海 发表于 2014-5-27 09:55
估计ＩＲＤ是拿不到那么多钱的。

这洋人一定会把财产藏的很好，顶多自己申请破产，然后继续住豪宅里开开 ...

不大可能， 据我所知， 如果金额如此巨大的欠税款， IRD 应该会 Take Criminal Charge against him. 一旦是Criminal Charge， 用Family Trust之类的手段是保护不了他的财产的。

再说， 25年官司打下来， 他支付的律师费都应该是个天文数字， 他就算有钱也被消耗得差不多了。

songinator

Lease 发表于 2014-5-27 10:01
不大可能， 据我所知， 如果金额如此巨大的欠税款， IRD 应该会 Take Criminal Charge against him. 一旦 ...

恩 所以做账的时候还是要尽可能的诚实 不要太过了

阿海

Lease 发表于 2014-5-27 10:01
不大可能， 据我所知， 如果金额如此巨大的欠税款， IRD 应该会 Take Criminal Charge against him. 一旦 ...

恩,　ＩＲＤ能力很强啦，但具体要看ｆａｍｉｌｙ　ｔｒｕｓｔ是怎样的。

如果财产都是在他老婆名下呢？那ＩＲＤ能告他老婆吗？

但这么大的数字我觉得他没能力还。

如果有能力那一定是在ＮＺ Rich list上的，但没听说过他。

Lease

阿海 发表于 2014-5-27 10:11
恩,　ＩＲＤ能力很强啦，但具体要看ｆａｍｉｌｙ　ｔｒｕｓｔ是怎样的。

如果财产都是在他老婆名下呢？ ...

IRD 可以想办法证明这是个 Sham Trust.

wentworth_fan

Lease 发表于 2014-5-27 09:31
原先只有5百万的税款， 但因为与IRD argue拖了25年现在变成了3亿6千7百万。而且这个官司被告是必输无疑的。 ...

1985年的五百万，大约相当于现在一千三百万，按综合通货指数算。
估计当时他就没钱付，如果有钱付，早就付了。

lche059

这个案例跟普通人炒房或者做生意逃点税根本没有可比性。就凭他跟IRD耗了30多年，就不是普通人可以比的，所以也没有什么让普通人可以借鉴的地方。
这个人和IRD在法庭上的较量在新西兰历史上是前无古人，估计短期内也没人能超过他。