Web designer sentenced to prison for tax evasion

21 December 2011

Web designer sentenced to prison for tax evasion

A Tauranga based company director has been sentenced to 18 months in prison and ordered to pay approximately $30,000 in reparations for tax evasion.

Kalym Cameron Lipsey, aged 29, was earlier found guilty on 22 charges of evading GST relating to his web design company Snazzie Limited.

Investigations Manager, Assurance, Jonathan Matthews said that Lipsey filed a false GST return in May 2010 declaring a refund of almost $58,000.

“Inland Revenue, as part of its normal procedures, requested supporting documentation and withheld the release of the refund. Subsequent enquiries showed that in the same week the false GST return was filed, Lipsey wrote out three cheques totalling over $58,000 from his company’s bank account.”

Mr Matthews said that Lipsey failed to provide any documentation to support his refund claims so Inland Revenue obtained bank statements for him and his company.

“We found that Lipsey filed 22 GST returns since Snazzie Limited was registered with Inland Revenue in September 2006. The returns declared income of just over $192,000, and expenditure of around $942,000. It was at this point that we widened our audit to include the periods going back to 2006.”

“Using the information contained in the bank statements, we calculated that Snazzie Limited’s total taxable GST income up to April 2010 was just under $131,000. We also calculated the company’s expenditure to be just over $94,000 therefore the company had a GST debt of just over $4,000.”

“Although the actual outstanding amount was just over $4,000, Lipsey obtained or tried to obtain GST refunds of over $83,000 and he could not provide records to support these claims.”

“This is another case which shows how Inland Revenue is able to use its resources and expertise to piece together the necessary information to uncover such actions. Once again, our message to those who deliberately break the rules is that no matter how much effort, time, and even money you spend trying to avoid paying tax, you will be caught in the end,” Mr Matthews said.

ENDS

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