Suspicion of tax offenses in 120 garages

Tax offices around country conduct garage review; tax offenses suspected in 120 of 300 tested.

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Anna Kaplan, Flash 90

All tax offices throughout the country conducted audits last week on garages.

The audit focused on 300 garages, selecting data processed on suspicion of failure to report transactions and illegal accounting of deductibles. Indeed, preliminary findings indicate that 120 out of 300 garages examined did not comply with the law.

In auditing an automotive parts business in Jerusalem it became clear that the business owner offset false invoices. An attempt to trace the source of the invoices showed that a worker of the business whose invoices were offset in its name printed, at his own initiative, false invoices in the name of his employer and distributed them for a fee of 3%.

A garage owner in the northern coastal plain operating near car sales lots and performing pre-sales performance tests was revealed by investigators to keep no work log or record of tests. When asked about the registry software he argued that test results are given orally without test outputs. However, when testing outputs were found, he changed his version and said that the software had been deleted, and then again changed his version, claiming that the computer was burned.

If that were not enough, for-sale signs were found waving in the car sales lots with this same garage owner's name on them. Here, too, the business owner changed versions, initially arguing that what he's selling is not a vehicle, then he chose not to respond.

Another audit in a garage in the north found no vehicles that the auditors saw being worked on registered in the logbooks, as required. Moreover, investigators found a garage owner running taxi services, without any registration or bookkeeping. An inventory of a tire repair garage in Yarka revealed irregularities between the information reported and the actual inventory. The business owner said: "I bought the stock, but it's still by the distributor."

A garage owner in Hadera who didn't document cars that were up on his lift argued that the fellows come to drink coffee, and he parks their car up there. And another garage owner, also in Hadera, caught not keeping a work log since the opening of his business explained that he was going through a divorce.

In a garage in Lod, the owner was found by investigators never to have recorded vehicles on Fridays before the operation. He said he logs a vehicle only once and if it returns for more treatment it is not recorded. He even rationalized that in cases where he does not charge a fee, he does not record the work in the log. Investigators to a garage in Ramla observed 15 unlogged vehicles being worked on, while the business owner claimed: "I'm in bankruptcy and am working without court approval."

Tax offices chose the first third of the year to conduct their audit in the garage sector, which employs about 35,000 workers. In preparation for the operation stake-outs were placed and garage's VAT reports were processed. On the day of the operation auditors arrived to the garages, examined the business books and compared them to their surveillance observations and log reports. Upon completion of the audit, estimates will be made in garages where problems were found, which stand at tens of millions of shekels.

The day before the operation, an audit and collection enforcement action was conducted in all business areas (besides garages). Approximately 86,000,000 NIS were collected from about 1,400 tax delinquents. Tiberias VAT employees arrived at a restaurant in Rosh Pina whose owner evades his VAT obligations, and seized NIS 700 from the cash register. Soon after, the restaurant owner came to the VAT office and paid his debts in the amount of NIS 380,000.

Hadera VAT employees visited three businesses in the catering field, operated by a father and son, who evaded filing tax reports. An analysis of the cases and the investigation showed that the businesses evaded reported revenues totaling 1.6 million NIS. The case was transferred to the legal department for the purpose of filing indictments. Indictments will be filed against six businesses in the Nazareth area, who cut off connection with the tax office for a long period. These business owners were investigated and found not to have reported income totaling 9 million NIS.