Taxes are a part of all our lives, no matter our opinion of them. Wages are taxed, and then most things we buy are taxed through the GST or tariffs, duties and levies.
To escape our obligation to pay tax, some individuals, both recently and throughout history, have tried to circumvent the tax laws of their country. In some cases, the loot from these schemes was well into the millions.
However, the tax man always arrives in the end, as these individuals found out.
Project Wickenby – Paul Hogan
Project Wickenby is a joint-agency task force here in Australia that was created in 2006 to better identify fraud and build tax evasion cases. The ATO’s website claims that since that time, they have succeeded in achieving 44 criminal convictions, collecting over $545 million in owed cash.
You may remember the controversy surrounding Australian icon Paul Hogan’s bout with Wickenby when he was disallowed from leaving Australia after his mother’s funeral in 2010. This particular case dragged on for some time, and many of the details were never made public. However, a settlement was reached after a five-year investigation from both Wickenby and the ATO itself, though we’ll never know the specifics.
Another example from 2012 discusses Vanuatu promoter Robert Agius. While not as high profile as Paul Hogan, the 8 year 11 month sentence handed down should be a strong disincentive to anyone thinking of ‘conspiring to defraud the Commonwealth and conspiracy to dishonestly cause a loss.’
The ATO web site contains a range of examples and statistics on serious tax fraud and prosecutions dating back to 2006, including the tax crime prosecution results from 2014-15.
If you don’t make a habit of checking tax and business news, chances are you may not have heard of Walter Anderson. However, this telecommunications giant rose to become an international figure when he started forking out the big bucks to save Russia’s ailing space station, Mir.
Unfortunately for Mr Anderson, an old space station isn’t the only thing he became known for.
His name hit the news headlines when he was charged with tax evasion, totaling well over US$200 million of debt. A grand jury indictment accused him of conducting business through accounts in both Panama and the British Virgin Islands so it would appear he made no personal income. According to an NBC News article, those businesses were worth nearly half a billion US dollars.
What came to pass was the largest tax evasion case in history. According to a 2011 court document, it was decided that he owed nearly US$250 million in both income tax deficiencies and court penalties combined – so it’s safe to assume his space station ventures may not have gone ahead as planned.
Al Capone was one of the most prolific criminal figures of the early 1900s, and has featured in movies, television shows and novels throughout history since then.
The man himself was born in 1889, and had joined a notorious street gang after he dropped out of school around the age of 12. You might have heard of this character most frequently for the violence and underbelly activities associated with his name, but did you know he was also charged for tax evasion?
According to the FBI, while serving a six-month sentence for an entirely different charge, the US Treasury Department had been collating evidence to have him charged with tax evasion. Come June 16, 1913, they succeeded, and Capone plead guilty. Four months later he was convicted, and ordered to pay more than US$215,000 in back taxes, among other fines. He also received an 11-year sentence, to be carried out at the same time as the remainder of his prior sentence.
Reducing tax through super
Of course, there are legal ways to reduce your tax bill without being prosecuted! In a related article – How to reduce your tax through super – we outline the tools and limits available to people looking to boost their super balance and save on tax.
Cases like these just go to show that no matter who you are – rich, poor, famous, infamous – you must always pay your taxes.
Have you filed your taxes for this year?