The Korea Taxpayers' Association urged that the presumption of innocence be upheld in connection with allegations of tax evasion involving singer-actor Cha Eun-woo (birth name Lee Dong-min). The association is the only tax-focused civic group in Korea that works to protect taxpayer rights.
On the 29th, the association issued a press release saying, "Tax avoidance is a taxpayer's right," adding, "If tax avoidance is lawful, it becomes 'tax savings,' and if that judgment is overturned, it becomes 'tax evasion.'" It added, "Whether such conduct is illegal is difficult to conclude until a Supreme Court ruling is issued."
Citing U.S. Supreme Court precedent, the association said, "Efforts to reduce taxes within the bounds of the law cannot be an issue," and explained, "Tax avoidance that seeks to minimize the tax burden with the help of tax experts is lawful and constitutes a taxpayer's right."
In particular, it said coverage that labels the corporation under Cha Eun-woo's mother's name a "paper company" runs counter to the presumption of innocence. The association explained, "Issuing tax invoices without providing services can be subject to criminal punishment, but in practice, the Supreme Court applies a very strict standard in determining whether an entity is a paper company."
As an example, it cited a past case involving a chicken brand, saying, "The National Tax Service determined it was a paper company and filed a complaint, but the Supreme Court ultimately rendered a not-guilty verdict," and added, "When the media uses definitive language, it can affect appeals and litigation procedures and infringe on taxpayer rights."
The association also said, "Without a leak of tax information, it is difficult for details of celebrity tax investigations to be reported externally," arguing, "If the National Tax Service does not investigate whether there was a leak, that is dereliction of duty." It urged, "Through an internal audit, the agency should identify the leaking officials and punish them strictly."
It further stressed, "The notion that being hit with a back tax assessment should immediately be condemned is wrong," adding, "The National Tax Service, which created a complex tax code and failed to provide sufficient advance guidance, also deserves criticism." It added, "Labeling someone a tax evader based solely on a simple assessment is an act that damages reputations."
Earlier, Cha Eun-woo reportedly underwent an ad hoc tax audit by the Investigation Bureau 4 of the Seoul Regional Tax Service last year and received notice of an additional tax assessment exceeding 20 billion won.
On the 26th, Cha said, "I sincerely apologize for causing concern with various controversies," adding, "Although I am serving in the military, this is not a choice to avoid controversy, and I will faithfully comply with procedures related to taxes."
His agency, Fantagio, said on the 27th, "At present, the matter is at a stage where the facts are being verified in accordance with procedures by the tax authorities," adding, "Both the agency and the artist are faithfully cooperating with the investigation."