The eldest son who “covered up 30 million yen” given by his late father… One phone call from the tax office that made his younger brother and sister jump up and down

The eldest son hid “parental money” from his brother and sister.

The peak season for tax audits is between July and December, one to two years after the filing of the inheritance tax return, known as “Nanajuni.

For the younger brother and sister, who trusted their older brother and entrusted him with the inheritance procedures, this was a surprise. However, if the inheritance tax returns are incomplete and the tax inspector suspects that the tax returns have not been filed, the tax inspection will be extended to all the heirs. If a tax accountant has completed the procedures for filing inheritance tax returns on behalf of the family, the tax accountant will be notified, and the tax accountant may be present.

In the case of the heirs of the B family, the elder son, who is the elder brother, prepared the inheritance tax return himself and submitted it to the tax office without requesting a tax accountant. The younger brother and sister also checked the tax return and agreed to sign it. However, the younger brother and sister, who had lived apart from their family for many years, did not know the amount of their father’s savings and did not investigate his property holdings.

At first, the younger brother and sister thought that the elder brother might have miscalculated something or made a mistake when preparing the inheritance tax return, since he was an amateur. The younger brother thought, “My brother, who has always been a good student, has indeed declined,” and the younger sister said, “See, that’s why I told you at the time not to ask the tax accountant.　I told you, ……,” she thought.

However, things were not so sweet. Through the tax audit, it turned out that the older brother, whom the younger brother and sister had trusted, had betrayed them and committed fraud!　In fact, when the brother moved closer to the family home, the father had provided 30 million yen to purchase the house, and the car that took the father to and from the hospital had also been purchased by the father for 3 million yen.

Thus, if a parent gives a child free money to purchase a house or a car, it is considered a “gift. Therefore, if the amount of the annual gift exceeds the basic exemption amount of 1.1 million yen, a gift tax return and tax payment must be filed and paid. However, the elder brother had not done so. Moreover, he concealed this fact not only from his younger siblings but also from the tax office.

A gift made before one’s death constitutes a “special benefit. To put it simply, a special benefit is a benefit that some heirs received from the decedent (the person who died leaving property) as a gift before death, a bequest, or a gift upon death. The Civil Code stipulates that the amount must be added to the amount of inherited property before determining each heir’s share.

The elder brother received the funds to purchase a house and a car from his father before his death in cash, so he thought the tax office would not find out about it. However, even if the gift could be concealed at the time of the gift, it would eventually be discovered once the inheritance occurred. Article 58 of the Inheritance Tax Law requires that the mayor of the municipality, etc. notify the tax office of the death by the end of the month following the date of receipt of the notification of death.

Furthermore, all national tax bureaus and tax offices throughout Japan are linked by a network called the KSK (Kokuzei Sogo Kanri) system. For example, by entering the name of a deceased person into this system, the tax office can determine the person’s income and tax payment record.

In addition, if there is a suspicion of no declaration or failure to declare, the tax office will check not only the deposit and savings accounts of the decedent but also those of his or her heirs going back 10 years. Nowadays, the National Tax Administration and the tax office can make inquiries online to financial institutions, which speeds up the process. If there are any suspicious deposits or withdrawals, a careful preliminary investigation is conducted.

In other words, the tax office has already grabbed a lot of information about the heir’s finances when they are contacted and told that they are going to conduct a tax audit. The tax inspector is also aware of the brother’s savings account and checks for suspicious deposits and withdrawals. If he has a mortgage or other loans that are large relative to his annual income, the tax inspectors are suspicious.

So why are tax audits extended to younger brothers and sisters?　The reason is that the original purpose of an inheritance tax audit is to verify the accuracy of tax returns submitted by taxpayers (heirs, beneficiaries, etc.). Any other omissions or errors in the tax return will be corrected. Therefore, in principle, all heirs are present.

In the case of the B family, the younger siblings were even subjected to an unexpected penalty.