An unsettling story appeared in the Nikkei.
The Osaka District Public Prosecutors Office Special Investigation Department arrested a real estate management business operator in their 70s from Osaka Prefecture, a tax accountant in their 60s from Osaka Prefecture, and five others on the 22nd on suspicion of violating the Inheritance Tax Act and using a forged private document bearing a seal. They allegedly used a forged will to make it appear that inherited assets had been donated to a social welfare corporation, thereby evading approximately ¥490 million in inheritance tax. The Special Investigation Department has not disclosed whether the suspects admit or deny the allegations.
Overview of the Case
In this case, arrests were made after a forged document stating that most of the ¥1.05 billion estate left by the deceased had been donated to a social welfare corporation was submitted to the tax office in an attempt to avoid inheritance tax on the estate.
Estates Donated to Public-Interest Corporations and Similar Organizations Are Excluded from Inheritance Tax
Under a special provision, assets donated to certain public-interest corporations, such as incorporated administrative agencies and social welfare corporations, are excluded from the taxable estate.
In fact, this method is sometimes used in inheritance planning.
Why is that...?
This may be a biased view, but many wealthy people are passionate about art and scholarship.
Donations are used because many people strongly wish for their assets to be used to promote such fields after their death.
Some particularly forward-thinking people even prepare by establishing a specific public-interest corporation during their lifetime so that their family can operate it...
Trying to Evade Taxes by Forging Documents Is Pointless
In this case, arrests were made over forging a will and preparing a false return claiming that a donation had been made.
Trying to evade tax on ¥1 billion by forging documents—what an amateurish case. That is my impression.
It is easy for the tax office to check whether the money actually moved.
Incidentally, there was also a more sophisticated case that used a similar scheme.
In that case, those involved first gained a degree of control over a social welfare corporation, actually made a donation to it, and then improperly withdrew the money.
It emerged on the 21st through interviews with people connected to a social welfare corporation in Hidakagawa, Wakayama Prefecture, that ¥100 million deposited into the corporation's bank account as a donation was withdrawn immediately afterward and its use remains unknown. There are also suspicions of irregularities in the accounting treatment of the inherited estate that funded the donation, and the Osaka District Public Prosecutors Office Special Investigation Department and other authorities searched locations connected to the corporation that day on suspicion of violating the Inheritance Tax Act.
[Omitted]
At an extraordinary board meeting this January, other directors in attendance raised a flood of questions about the accounting treatment, asking, “Was the will really handwritten?” and “It makes no sense that the funds were withdrawn.” Some also called into question the responsibility of the prefectural assembly member who had introduced to Keiaikai the male director involved in the deposits and withdrawals.
[Remainder omitted]
Well, there really are some extraordinary people out there.
In this case, the arrests expanded beyond the tax accountant to include a rakugo storyteller and even a prefectural assembly member.
It is the height of folly to do something like this over assets of around ¥100 million and end up in prison.
They could use a strong dose of Helen Keller’s example—the social welfare advocate who lived with three disabilities.
Pay your taxes properly.