Some high-value tax delinquents were found hiding hundreds of gold bars and large amounts of cash stuffed in hiking backpacks inside their homes. Others attempted to disguise bundles of high-denomination checks as trash by covering them with newspaper, only to be discovered. (Yonhap)
SEOUL, June 10 (Korea Bizwire) — South Korea’s National Tax Service (NTS) has launched an aggressive crackdown on 710 chronic tax delinquents who collectively owe more than 1 trillion won (approximately US$730 million), revealing widespread use of fraudulent schemes to hide assets and evade payment.
The offenders, flagged for property tracking investigations, used tactics ranging from fake divorces and shell company manipulations to lavish lifestyles funded by undeclared wealth. Among them, 224 individuals intentionally dodged tax collections, 124 hid assets using borrowed names and secret safes, and 362 were found to be living extravagantly despite their unpaid taxes.
One high-profile case involved an individual who filed for a sham divorce immediately after receiving a multi-billion-won capital gains tax bill. The person transferred real estate to their spouse under the guise of a property settlement while continuing to live together and share finances — a clear case of using marital fraud to obstruct tax enforcement.
Another case spotlighted a corporate entity, a real estate project vehicle, that concealed hundreds of billions of won in corporate taxes. The firm overstated dividends to shareholders before liquidating, despite knowing it owed massive back taxes — a deliberate evasion strategy.
Others funneled wealth into religious organizations or gifted high-value shares to family members in order to place assets beyond the reach of the tax authorities. In several instances, suspects were caught using luxury safes, fake business closures, and VIP safety deposit boxes to conceal cash, gold bars, and high-denomination checks.
Ahn Deok-soo, Director General of the Tax Collection and Legal Affairs Bureau at the National Tax Service, explained at the National Tax Service press room in the Government Complex Sejong that 710 habitual high-value tax delinquents have been selected for asset tracking investigations. These individuals have evaded taxes through methods such as hiding assets via ‘fake divorces’ or inflating company dividends. (Image courtesy of Yonhap)
The NTS revealed that raids uncovered stashes of gold and cash hidden in backpacks, balconies, secret safes, and even camouflaged among household waste. In one case, a hiker’s backpack held hundreds of grams of gold; another raid led to the seizure of 1.2 billion won in cash and valuables from a closed business location masked as abandoned.
Some suspects reportedly obstructed the investigations by yelling and threatening inspectors during home and office searches.
Last year, the NTS carried out over 2,000 site inspections, filed more than 1,000 civil lawsuits to recover hidden assets, and imposed criminal penalties on 423 individuals who either evaded tax collection or assisted in the process. These efforts resulted in the recovery or securing of 2.8 trillion won in cash and claims.
An Deok-su, head of the NTS’s Legal and Collection Bureau, announced plans to expand the property-tracing task force and enhance detection systems using artificial intelligence and big data. New tools will automatically flag suspicious behaviors by categorizing tax evaders based on asset concealment patterns and investment in novel financial vehicles.
“Using smarter analytics and international cooperation, we aim to tighten enforcement and ensure equity in the tax system,” An said, emphasizing the agency’s commitment to curbing sophisticated tax dodging schemes.
M. H. Lee (mhlee@koreabizwire.com)
