Penalties for false income reporting – case study

Posted by Bizink on Sep 12, 2011 5:47:47 AM

Former restaurant owner gets home detention for false income reporting

A former Wellington restaurant owner has been sentenced to five months home detention and 200 hours of community work for filing false Income Tax and GST returns and evading tax.

Darrell Earl Antonopoulos plead guilty to three charges of aiding or abetting his company, Whonere Holdings Limited, trading as La Casa Pasta restaurant, to provide false Income Tax returns and 24 charges of providing false GST returns to Inland Revenue with the intention of evading tax. Mr Antonopoulos was charged under the Tax Administration Act.

"Mr Antonopoulos admitted to knowing his tax obligations yet deliberately filed false Income Tax and GST returns on behalf of his company over a four year period and dealt in cash," Assurance Manager Investigations, Tony Morris, said.

"An examination of the restaurant's daily sales receipts and bank deposits showed that a significant number of customers were paying in cash. The company did not disclose any of these sales and MrAntonopoulos diverted that cash for his own benefit".

Mr Morris said that an initial analysis of Mr Antonopoulos' financial records showed that the restaurant's gross profits were low when compared to other similar businesses.

"Benchmarking the performance of businesses within the same sector enables Inland Revenue to identify taxpayers likely to be suppressing income.

"Once identified, Inland Revenue has a number of techniques and tools at its disposal to verify whether cash sales have been omitted and to quantify that omission.

"Businesses and individuals doing the right thing can be confident that Inland Revenue will detect those evading their obligations. Those cheating on their taxes should be aware that Inland Revenue has allocated substantial resources and is using increasingly sophisticated methods to detect tax evasion and will take action against serious non-compliance."

Inland Revenue has recovered $361,000 from Mr Antonopoulos and just over $88,600 remains outstanding. The restaurant, La Casa Pasta, has been sold and is under new management."

IRD Media Release Oct 2011 -

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Topics: false returns, Firm News, accounting, Blog, Inland Revenue, penalties, tax, tax evasion


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