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Probe of tax audits finds abuse of power signals

Nov 21,2017
The tax agency is being accused of abusing its powers for political purposes under two conservative administrations over the past 10 years.

According to a task force formed in August to look into reforms of the tax agency on Monday, five out of 62 audits by the National Tax Service (NTS) are suspected of being politically motivated.

One such case was the audit of Busan-based SME Taekwang Industrial in July 2008.

The former chairman of the company, Park Yeon-cha, was prosecuted that year for bribing politicians who were close aides to the late President Roh Moo-hyun.

The task force said that an investigation team from the Seoul office conducted the audit even though the company was small and based outside the greater Seoul area.

Additionally, the tax agency reported Taekwang Industrial to the prosecutors’ office before the audit was even complete.

This led to an investigation by prosecutors of an alleged $6.4 million bribe that Park gave to the family of the late president. While that investigation was going on in 2009, Roh committed suicide.

The task force said the overly rapid investigation by the NTS and the excessive probing of a specific person seems to have violated the principle of fairness and political neutrality in an investigation.

The task force also said it suspects an audit of a talent agency in 2011 whose members were politically affiliated with Roh including comedian Kim Je-dong and rock singer Yoon Do-hyun.

The task force said although it has failed to confirm the tax agency abused its power with that probe, it suspects it strongly.

It suspects that similar abuse took place in the case of Lee Hyun-joo, the CEO of Daewon Advisory Services, a consulting firm, in April 2015 due to his opposing some business plans by former plastic surgeon Kim Young-jae.

Kim reportedly conducted several minor cosmetic surgery procedures on former President Park Geun-hye and was also close to Park’s friend Choi Soon-sil.


BY LEE HO-JEONG [lee.hojeong@joongang.co.kr]