Pandemic profits targeted by the NTS in latest crackdown
The National Tax Service (NTS) is investigating 67 people who are alleged to have diverted profits reaped as a result of booming business during the pandemic.
A golf club and an orthodontist were on the list.
According to the NTS on Tuesday, 35 people are being investigated for leisure and hobby businesses, while 32 are involved in non-contact businesses or in health care.
The tax agency said the irregularities were identified through data mining.
In one case, a golf club that has hosted several large tournaments raised prices 10 percent as business boomed. To hide the profits, the club overstated fees paid to a landscaping company owned by a related party and overpaid a golf-cart rental company owned by another related party, a transaction viewed by the NTS as a gift-tax violation.
An orthodontist experienced a 10-percent increase in business during the pandemic and hid some of the extra earnings, especially payments from people not using insurance. The hidden gains were converted into cryptocurrencies that were transferred to his children, who are studying overseas.
A company that sells home training equipment, including indoor cycling and other workout equipment, transferred money to the founding family hidden as the repayment of loans. Some relatives were paid for jobs at the company they didn’t actually do.
The money was used to buy 10 properties, including apartments and stores.
“In this audit, we have specifically targeted businesses that have benefited significantly from Covid-19,” said Roh Jeong-seok, head of the tax agency’s investigation bureau. “Those that continue to suffer from the pandemic were not targeted.”
Roh said the agency will continue to use data to increase the efficiency of the tax agency’s audit by zeroing in on specific groups.
BY LEE HO-JEONG [firstname.lastname@example.org]