FARMER CONVICTED ON INCOME TAX CHARGES

Press, Volume XCIII, Issue 28008, 30 June 1956, Page 12

FARMER CONVICTED ON INCOME TAX CHARGES

Meredith George Wilson, aged 51. a farmer, of Rolleston. was convicted by Mr Rex C. Abernethy. S.M.. in the Magistrate’s Court yesterday, on seven charges of wilfully -making false returns of income.

The Magistrate said he would impose the penalty on Monday. The hearing began on Wednesdav. when Wilson pleaded not guiltv to eight charges of w’ilfullv making false returns of income. The case for the prosec”tion was then presented. Mr P T. Mahon appeared for the Commissioner of Inland Revenue, and Wilson was represented bv Mr R A Young.

The prosecution alleged that Wilson had understated his income bv £7864 is lOd over a period of 11 years and that the total deficiency in tax was £2228 18s Bd.

Wilson was educated at the Halkett School, but only went as far as Standard V and then left school to earn , °wn li'Tng. said Mr Young. About 30 he bought 141 acres of land at Rolleston. The property was then in dilapidated condition: the land was light and unproductive. He worked hard and bought other blocks of land in the district until by 1944 he had 455 acres of light, marginal land. Wilson had no knowledge of bookkeeping. said Mr Young. It was quite beyond him to prenare the complicated returns required from farmers, so he enlisted the aid of a railway clerk at Rolleston, who prepared the returns down to 1954. However well intentioned this man was. the returns were not properly kept.

Returns Amended Wilson was worried about his income returns because the income tax people made amendments to his returns each year, said Mr Young. What Wilson treated as deductions the department treated as capital expendii_Tt Was clear that the returns filed by Wilson were not correct, but. counsel submitted, the evidence given by the prosecution had not established that these returns were wilfully false. It was true that no records were kept, but that reacted adversely on Wilson because of what he lost by wav of allowances fnr depreciation and what he had spent on the farm. It was conceded that in the absence of records the department had no alternative but to adopt the standard method of appreciation of assets to ascertain Wilson’s income. It w*as dangerous to look at assets at the start of a period and at the end of that period and assume from the difference that the margin was so great that on rnose figures alone it indicated wilful failure to comply with the requirements of the act. Items such as moneys from an estate and an increase m the standard values of sheep from 5s 3d to 30s could give quite a different impression of an increase in income. For examnle. if a man a J lO " 5 ® under Land Sales for market value was now £4OOO it would be wrong to assume £^ooo^^ S earn * n g s ad increased by

Accountant Consulted Young said that the case must turn on the impression Wilson gave when he was in the witness box as to whether the returns were wilfully and falsely made. There was no evidence that the 1955 return was false. An accountant., whom Wilson consulted in 1955 for the first time, returned the income for that year as £1435. but in the light of later information reassessed it at £1306: but the department. by its method of computation, made it £1822. The department had adhered to £lOOO as Wilson’s living expenses, but the accountant, in a detailed analysis, made it £722. Generally, the case for Wilson was that his present troubles were due to muddlement and inefficiency in keeping records because of his lack of education. said Mr Young. It seemed clear that the returns were made up f’-nm scraps of information. Nothing was balanced. Neither Wilson nor Mr Morrison made any calculations on the cost of living. Had that item been included it probably would have made up the difference between the actual income and what was returned as in-

come. Wilson would deny that he wilfully made false returns. Evidence was given by the defendant. Wilson: by his wife. Iris Wilson and by Arnold Allen, a public accountant.

The Magistrate said he was satisfied that a conviction must be entered for each of the years 1945. 1946, 1947. 1948. 1950. 1952. and 1954. No conviction would be entered on the charge relating to the return for 1955 and that charge would be dismissed. Mr Young said that this was Wilson's first offence on any charge except one for a motoring offence. He had always lived modestly. There were no extravagances and he just did not know where the money had gone. Wilson faced a large account for tax and the Commissioner of Inland Revenue would no doubt impose a penal tax also. It was to Wilson’s credit that when he saw his returns were not accurate he took the advice of a public accountant who grappled with the position at a difficult time and was able to produce a satisfactory return. Wilson went to the accountant before he knew he was to be prosecuted.

“I think Mr Allen has done the very best he could on the information supplied by his client.’’ said the Magistrate.