2024.09.19. The Fair Economy — The National Tax Service receives about 20,000 tax evasion tips each year, but it has been found that roughly 40% are not processed on time and are carried over to the next year.
Jung Il-yeong, a lawmaker on the National Assembly's Committee on Planning and Finance, announced on the 19th that of the total 79,485 tax evasion tips submitted to the National Tax Service over the past four years, approximately 29,000 cases, or 36.5%, have not been processed in a timely manner.
According to data submitted by the National Tax Service to Rep. Jung Il-yeong, the number of tax evasion tips by year was confirmed as follows: 21,147 in 2020, 20,998 in 2021, 17,777 in 2022, and 19,763 in 2023. The number of tax evasion tips carried over to the following year was 9,355 in 2020, 8,056 in 2021, 5,930 in 2022, and 5,659 in 2023.
By regional tax office, the Daegu Regional Tax Office had a carryover rate of 44.9%, carrying over about half of its tax evasion tips, followed by the Busan office at 42.5%, the Seoul office at 40.7%, the Incheon Regional Tax Office at 33.6%, and both the Chungbu and Daejeon offices at 31.4%.
The problem is that when verification of tax evasion tips is delayed, the decision on whether to launch a tax audit is also delayed, giving tax-evading companies or individuals enough time to destroy or manipulate relevant documents.
Accordingly, there are calls to reinforce the staff of the department that receives and processes tax evasion reports. According to data from the National Tax Service confirmed by Rep. Jung Il-yeong, the number of staff in charge by year was 149 in 2020, 161 in 2021, 164 in 2022, and 166 in 2023, showing a slight increase since 2020 but virtually unchanged since 2021. The number of processing staff by regional office was only 16 in Daegu, 17 in Gwangju, and 19 in Incheon. In particular, Incheon handled about 127 cases per person last year, the second highest workload in the country after Seoul (146 cases).
An even bigger problem is that the National Tax Service does not even properly grasp basic work processing status, such as the time required to process tax evasion tips.
According to Article 12 of the Regulations on the Management of Tax Evasion Report Data, if the processing period for a tax evasion report is expected to take 60 days or more from the date of the notice of receipt, the head of the tax office or the head of the regional tax office is obliged to provide an interim reply to the reporter and to prepare and keep a record of interim replies.
However, it was confirmed that the National Tax Service, which established regulations and work manuals for tax evasion tips, is not properly managing basic work processing status, such as the "time required to process tips."
In response to Rep. Jung Il-yeong's inquiry regarding the status of notifications to tax evasion tipsters and the average time required from receipt to notification, the National Tax Service answered that it does not separately manage the number of notifications, the status of notification processing, or the average processing time.
Rep. Jung Il-yeong pointed out, "The fact that about 40% of valuable tips from citizens are not processed in a timely manner due to staff shortages and management negligence means that the most basic stage of detecting tax evasion is collapsing." He added, "The National Tax Service's behavior in leaving this situation unaddressed not only renders valuable citizen tips meaningless but also provides opportunities for suspected tax evaders and habitual offenders to destroy evidence and manipulate documents."
He continued, "The National Tax Service should reinforce its staff for processing tax evasion tips and stipulate mandatory processing periods to make efforts to reduce tax evasion in blind spots of taxation." He emphasized, "Through this national audit, we will thoroughly investigate the National Tax Service's inadequate tax administration."
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