Comedian Park Na-rae and ASTRO member and actor Cha Eun-woo's controversy is causing major social repercussions beyond the entertainment industry, and attention is focused on mentions that they could face prison sentences.
▲ 'abuse of power·alleged proxy prescription' Park Na-rae, "cannot rule out possibility of prison sentence"
Park Na-rae's former managers on the 3rd of last month filed a real estate provisional seizure application worth 100 million won with the Seoul Western District Court, alleging workplace harassment, proxy prescription and unpaid production fees. They then filed a complaint with the Seoul Gangnam Police Station accusing Park Na-rae of aggravated injury, defamation by false statements, and violation of the Act on Promotion of Information and Communications Network Utilization and Information Protection. In response, Park Na-rae filed a complaint against her former managers for attempted extortion and subsequently filed an additional complaint accusing them of embezzlement in the course of duty.
As the two sides exchanged complaints and accusations with sharply conflicting claims, lawyer Jang Hyun-oh of SK Law Office analyzed on his YouTube channel that "legally, the criminal law risk of imprisonment is increasing."
He classified the charges brought against Park Na-rae by likelihood of imprisonment into moral wrongdoing (0–20 points), fines and penalty surcharge (20–40 points), fines and suspended sentences (40–80 points), and possibility of imprisonment (80 points or more), and he pointed to the alleged drug administration through the 'injection aunt' as the most dangerous element. Lawyer Jang said, "Even if it is a first offense, depending on the way they respond, you cannot rule out the possibility of imprisonment. Whether to add or subtract one point from the 80-point danger level depends on her response."
In particular, Lawyer Jang advised, "The court considers multiple charges together. Under the doctrine of concurrent offenses, there is a possibility of going to prison. If it goes to that state, imprisonment is possible. Rather than unduly provoking the other party, they should seek a point where settlement is possible to avoid the worst outcome."
▲ '20 billion won tax evasion allegation' Cha Eun-woo, possibility of five years or more in prison
The Seoul Regional Tax Service's fourth investigation division last year conducted a high-intensity investigation into Cha Eun-woo over allegations of tax evasion through a one-person agency set up by his mother. Cha Eun-woo had worked in a manner in which his agency Fantagio and the one-person agency established by his mother signed a service contract to support his entertainment activities, and income was known to have been split among Fantagio, the one-person agency and Cha Eun-woo himself, but the tax authority viewed the one-person agency set up by Cha Eun-woo's mother as a paper company that did not actually provide services.
The tax authority judged that Cha Eun-woo and his mother set up a corporation and distributed income to reduce income tax by 45%, using a trick to apply a corporate tax rate 20 percentage points lower than the income tax rate, and Cha Eun-woo's side said, "The main issue in this matter is whether the corporation established by Cha Eun-woo's mother is subject to substantive taxation, and this is not a matter that has been finally confirmed and notified; the issues related to legal interpretation and application will be actively explained through proper procedures. The artist and tax representatives will faithfully cooperate so that the procedures can be completed promptly," it said.
Amid the disgrace of being accused of the largest-scale tax evasion among domestic entertainers, allegations arose that Cha Eun-woo used tricks to avoid taxes, and suspicion was raised that viewers and fans were deceived after the management company's address established by Cha Eun-woo's mother was reported to be an eel restaurant operated on Ganghwa Island in Incheon. Fantagio declined to comment, saying "unable to confirm."
In the legal community, attention is focusing on the possibility of applying the Act on the Aggravated Punishment of Specific Crimes because the amount Cha Eun-woo is said to owe in additional tax and penalties reaches the 20 billion won range. Under the act, if the amount of tax evaded in a year is 1 billion won or more, the explanation in the legal community is that the offender can be punished by life imprisonment or imprisonment of five years or more.
Regarding this, Lee Don-ho, chief lawyer of Nova Law Office, said on his channel, "The first issue is whether this corporation actually conducted business. Even if the office had staff and work, if the corporation was created to attribute income to an individual rather than the corporation and expenses were booked to that corporation and taxes were paid, it can be judged as tax evasion. Under the principle of substantive taxation, the focus is on who actually earned the money, not the name. If the earnings were generated by an individual's labor and image, they can be re-taxed as personal income even under a corporate name. However, using a corporation does not immediately mean tax evasion. It is necessary to comprehensively determine whether there were actual services, whether the contract structure was normal, and whether there was intent to evade taxes. This will be an important case showing the boundary between tax saving and tax evasion for everyone using a one-person family corporation," he analyzed.
Park Na-rae and Cha Eun-woo were two people who were hot in variety shows and works, but as they have become embroiled in controversy, current legal professionals are even mentioning the possibility of imprisonment. Many eyes are on how they will respond to the controversies surrounding them.
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