Nonprofits caught for tax crimes

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Nonprofits caught for tax crimes

Sixty-three nonprofit organizations, including religious groups, were caught issuing false donation receipts that were later used to commit tax fraud.

The National Tax Service (NTS) released their names through its website on Thursday.

The organizations had either issued false receipts more than five times or falsely reported receiving more than 50 million won ($43,000) in donations in 2013. Some had also neglected to keep records of the donations they actually received.

The tax agency said it had given the organizations six months to explain themselves before making their names public.

Ninety-five percent of the organizations, or 60, were Buddhist or Christian groups, and most are suspected of operating without any affiliation with a larger religious authority.

Of these, the majority were small Buddhist temples operating in apartments, houses or commercial properties in major cities. Several were Christian churches.

The biggest offender was the Buddhist Geumsan Temple in Gimcheon, North Gyeongsang. It issued 137 false receipts for donations totaling 508 million won.

Some organizations sold blank receipts to taxpayers who wanted bigger returns on their year-end tax refunds.

In exchange for between 50,000 and 100,000 won, these organizations would give out the receipts on which individuals could claim to have donated 2 million won or more, which would boost their refund.

Other organizations, largely fortune tellers and psychics, used the documents and stamps of legitimate religious groups to claim the right to offer donation receipts. These groups would pocket a client’s donation in its entirety, then write him or her a receipt for an even larger donation than was actually received.

The falsified or unrecorded donations totaled 13.3 billion won.

Fewer groups were named than last year, when the list totaled 102.

The number of groups that falsified donations of more than 1 billion won also shrank, from seven last year to one this year.

The NTS imposed additional taxes on the groups who issued false receipts and increased the income taxes on individuals who used them to commit tax fraud.

Meanwhile, the NTS also released the 2014 financial statements of 2,468 state-approved nonprofit organizations on its website.

This was the first time the tax agency has made the statements public, which showed that the organizations received 2.2 trillion won in donations. Of that, 1.9 trillion won was spent on providing services.

The list also included the names of 248 previously approved groups that failed to report their statements. The tax agency plans to revoke their approval by the state.

There were 7,883 nonprofit groups that reported their balance sheets this year, up 41.8 percent from last year’s 5,560, according to the NTS. Their annual income amounted to 5.3 trillion won, and they received 32.3 trillion won in government subsidies. Among the total number of nonprofit foundations, the highest percentage was located in Seoul, at 32.8 percent.

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