IRD welcomes tax evasion convictions

The Government says the money it paid out to consultants doing work on the IT upgrade is money well spent.

Inland Revenue says the conviction of three businessmen for tax evasion in the Wellington High Court today shows there are consequences when the rules are broken deliberately.

Paul William O'Connor was found guilty on 14 charges relating to the way he managed the affairs of various Media Search-related entities to evade tax throughout an extended period in the 1990s and 2000s.

Scott Crawford Anderson was found guilty of two charges of helping O'Connor evade tax by providing fictitious invoices and Brent John Gilchrist was acquitted of two charges of aiding O'Connor evade tax.

Gilchrist and Anderson were both found guilty of six charges of aiding and abetting tax evasion through the provision of fictitious invoices.

Inland Revenue group tax counsel Graham Tubb said the men used offshore bank accounts, false invoices and false deductions to evade paying tax.

"The transactions went well beyond sharp practice or clever accounting. The offenders were individually and collectively fraudulent and were designed to allow a very profitable business pay little or no tax, leaving the burden on other taxpayers.''

They repeatedly restructured business to conceal the proceeds, he said.

O'Connor alone evaded $1.8 million in tax over a 13-year period.

Mr Grubb said the convictions were a reminder that Inland Revenue had put "significant resources'' into identifying tax evasion and appropriate actions were taken when the rules were deliberately broken.