A woman who “buried her head in the sand” through years of work as an IT contractor ended up with a half million dollar unpaid tax bill.
Christchurch District Court Judge Gary MacAskill was worried that Megan Mary O’Sullivan was continuing to ignore her situation as he sentenced her to home detention and community work for her years of tax evasion.
He believed that she had not yet told her family of the prosecution, and nor had she told her current employer — a Christchurch firm where she continues work as an IT contractor.
The offending occurred when she was working in Palmerston North when she failed to file tax returns for about eight years and ended up evading income tax and GST totalling $553,821.
Defence counsel Andrew Riches told the court she had not used the tax money on any extravagances such as gambling or international travel.
But Judge MacAskill commented: “She may not have gambled it away or spent it on luxuries but she spent it on a standard of living that was higher than her earnings.”
Mr Riches said O’Sullivan would not declare bankruptcy because she was focussed on paying back the debt. She had held back $100,000 knowing that the “day of reckoning” was coming.
She had now made repayments totalling $264,000, and had an accountant working on getting the details to file the missing returns. They had not yet been filed.
Judge MacAskill said her pre-sentence report after her guilty pleas to the Inland Revenue Department prosecution on a total of 24 charges assessed her as a low risk of reoffending or causing harm to others.
The report said she was remorseful and hated being in this situation. But the judge said: “It seems to me you regret being held to account more than you regret your offending.”
He said she was a single parent who had gone into business as an IT contractor but had not got assistance she had expected. That led to a failure to pay taxes, and she displayed what was described in court as a “head in the sand” attitude while the tax problem grew.
She has been working under contract for a major Christchurch firm and will continue living in the city for the next few months while that contract runs.
IRD prosecutor Ron Lemm described it as sustained and serious offending involving a considerable amount. The department would normally push for a jail term for this level of offending, but it also wanted to see compliance and payment of the outstanding taxes.
Judge MacAskill imposed nine months of home detention at a Christchurch address, and ordered O’Sullivan to do 200 hours of community work.
Inland Revenue did not seek a reparation order for the unpaid tax. It already had its own means in place to recover the money and Judge MacAskill noted that its resources on behalf of taxpayers were more effective than the courts’ collection system.