"Let's Find Hidden Money"... High-Amount and Habitual Tax Delinquents' 'Hide and Seek'

Newly Released List of Tax Delinquents This Year... Total Delinquent Amount 4.4196 Trillion KRW
On-site Forced Collection by Locating Delinquents
Home Searches Seize Precious Metals and Luxury Bags

On the 15th, the National Tax Service disclosed the list and personal information of 6,940 high-amount and habitual tax delinquents who have overdue national taxes exceeding 200 million won for more than one year on its website. [Image source=Yonhap News]

[Asia Economy Reporter Han Seung-gon] #"If you come out and stay, take everything! I really have no money!" This is the outburst of Mr. Kim, a high-amount habitual tax delinquent in his 50s. However, tax officials in charge of on-site delinquent tax collection calmly pass through the chaotic living room and start searching from the bathroom. They then discover gold bars worth several hundred million won in the bathroom trash can. Mr. Kim, rather bewildered, asks, "Why are gold bars coming out from there?" This is a scene of tax collection from high-amount delinquents often seen in TV dramas or movies. Because of the importance of tax justice and public consensus on delinquent tax collection activities, such dramas boast high viewership ratings. Tax evasion is truly a 'public enemy.'

According to the National Tax Service (NTS) on the 18th, there are 6,940 high-amount habitual tax delinquents who have overdue national taxes of 200 million won or more for over a year. On the 15th, the NTS disclosed their names and personal information on its website.

Among the 6,940 delinquents newly disclosed this year, 4,423 are individuals and 2,517 are corporations. Their total overdue amount reaches 4.4196 trillion won. The individual with the largest overdue amount is Mr. Lim (50), residing in Ansan, Gyeonggi Province, who operates an illegal gambling business (other gambling and betting) and has not paid 173.9 billion won. The second is Mr. Yoon (46), with an overdue amount of 70.8 billion won. Mr. Yoon is also engaged in gambling and betting.

Rapper 'Dok2' is also included in this public list for owing 300 million won in comprehensive income tax. In July, Dok2 was subject to a court-enforced settlement order to pay approximately $35,000 (about 45 million won) to an overseas jewelry company. The list also includes 47 convicted tax evaders such as Jeon (63), mother of actor and singer Jang Geun-suk, and 31 organizations that received donations insincerely.

National Tax Service, What Are the Criteria for Disclosing Delinquent Taxpayers?

The NTS confirms the recipients of notification letters through deliberation by the National Tax Information Committee at the beginning of the year. Then, each regional office encourages payment for over six months, and at the end of the year, the list of those to be publicly disclosed is finalized through the committee's resolution. These lists are published in the official gazette, on the NTS website, or on bulletin boards of the relevant tax offices.

Tax evaders are those who have been convicted under the Tax Offense Punishment Act since July 1, 2012, and whose annual evaded tax amount exceeds the threshold for disclosure. The threshold was 500 million won annually from July 1, 2012, to June 30, 2016; 300 million won from July 1, 2016, to December 31, 2016; and 200 million won from January 1, 2017, onward. Names, business names (corporate names), age, occupation, address, evaded tax amount, tax type and amount, summary of judgment, and sentence are posted in the official gazette, on the NTS website, or on the bulletin boards of the relevant tax offices.

Organizations receiving donations insincerely are those that ▲ as of December 31 of the previous year, have been subject to additional tax assessments of 10 million won or more within the last two years due to non-compliance with the Inheritance and Gift Tax Act; ▲ or as of December 31 of the previous year, have failed to prepare or keep donor issuance details for the past three years, making them subject to public disclosure.

▲ Also, as of December 31 of the previous year, if an organization has issued donation receipts with false donation amounts or donor information five or more times or for amounts exceeding 50 million won within the past three years; ▲ or if a public interest corporation such as a social welfare corporation or school has failed to report compliance with obligations under Article 39, Paragraphs 5 and 6 of the Corporate Tax Act Enforcement Decree two or more times, the list is disclosed.

[Image source=Yonhap News]

No Money to Pay? On-Site Collection of Delinquent Taxes

Tax authorities sometimes conduct home searches related to delinquent tax collection to recover overdue amounts. According to Cheongju City on the 16th, since October, the city has conducted three home searches on 10 high-amount local tax delinquents, collecting 26 million won and seizing precious metals and luxury bags. Earlier, on the 7th, during a home search of four high-amount delinquents, 20 movable properties, luxury bags, and precious metals were seized, and 10 million won of overdue taxes were collected. Additionally, in October and November, home searches of six high-amount delinquents resulted in the seizure of 20 movable properties and 33 precious metals, collecting 16 million won.

Meanwhile, in a case where a high-amount delinquent failed to pay over 50 million won in local taxes, tax authorities conducted a home search and found bundles of cash amounting to 4 million won. Jeju tax officials conducted home searches three times last month on 12 high-amount habitual delinquents.

The total overdue amount of these 12 individuals was about 700 million won, with one owing as much as 100 million won. The province seized 48 million won in cash, a golden key, luxury watches, rings, and 14 other valuables during the three home searches. Additionally, this year, the province tracked and forcibly sold 66 illegally registered vehicles, known as 'dapocha,' collecting 229 million won.

"Report High-Amount Delinquents" Rewards Up to 100 Million Won

Since 2014, Seoul City has operated the 'High-Amount Delinquent Hidden Property Reporting Center.' So far, it has received a total of 77 reports, collected 1.3 billion won in overdue taxes from 11 of these reports, and paid 80 million won in rewards. Major reports included information on the operation of businesses under borrowed names, difficult-to-obtain creditor information by tax authorities, false mortgage registrations, and information on luxury residences.

If a person reports objectively verifiable evidence that a delinquent is hiding assets and contributes to the collection of overdue taxes, a reward of up to 100 million won is paid. Rewards are given when at least 10 million won of overdue taxes are collected, ranging from 5% to 15% of the collected amount, with a maximum limit of 100 million won.

Jung Heon-jae, Director of the Seoul City Finance Bureau, said, "Seoul City is conducting strong delinquent tax enforcement to track down hidden assets of high-amount delinquents who maliciously evade tax payments, but voluntary reports from citizens are essential to find these secretly hidden assets. We ask for your active interest. We will relentlessly pursue hidden assets and ensure that unscrupulous delinquents who maliciously evade tax payments pay their taxes."

This content was produced with the assistance of AI translation services.