Tax Professionals Investigated for Millions in Undeclared Income
Translated & summarized from Globes by baba
Tax Authority investigators are examining a tax advisor and an accountant suspected of not reporting millions of shekels in income for a major shareholder in a public company. The professionals allegedly helped conceal over 31 million shekels in dividends and owner withdrawals between 2021 and 2023. This resulted in an estimated loss of over 800,000 shekels in tax revenue for the state. The suspects were released under restrictive conditions, and their names are under a gag order.
The story in 5 lines · by baba
- Tax professionals are under investigation for allegedly hiding millions in income for a major shareholder.
- The suspects are accused of misreporting 16.5 million shekels in dividends, costing the state 800,000 shekels.
- They also allegedly failed to report 14.6 million shekels in owner withdrawals from a private company.
- The investigation began after an audit by the Rehovot tax assessor's office.
- The suspects were released under restrictive conditions with a gag order on their names.
Israel Tax Authority investigators are probing a tax advisor and an accountant on suspicion of failing to report millions of shekels in income for a major shareholder in a public company. The two professionals are accused of aiding their client in concealing owner withdrawals and dividend distributions over several tax years. The investigation began after an audit by the Rehovot tax assessor's office uncovered evidence of extensive non-reporting of these income types. Consequently, the case was transferred to the Central Investigations Tax Assessor, who found that the suspects assisted the client in filing tax returns from 2021 to 2023 without declaring income as legally required.
Specifically, the tax advisor and accountant allegedly helped the client report approximately 16.5 million shekels in dividends. However, this income was reportedly declared in a field designated for ordinary shareholders, resulting in a 25% tax rate instead of the legally mandated 30% for substantial shareholders. This misreporting is estimated to have cost the state over 800,000 shekels in lost tax revenue. Furthermore, the suspects are accused of failing to report about 14.6 million shekels in owner withdrawals from a private company controlled by the client. These withdrawals, made in 2021 and 2022, were not returned within the following year, making them taxable as dividends, yet they were allegedly not declared as such.
The investigation became public on Monday with searches and evidence seizure. The two suspects were brought before the Rishon LeZion Magistrate's Court on Tuesday, which released them under restrictive conditions and imposed a gag order on their names. The suspects are presumed innocent until proven guilty.
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