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…and so the JG Russell case has finally come to an end…or has it?

Inland Revenue has won a $367m judgement against 79 year old accountant, JG Russell for an unpaid tax debt. Even though the case has been won by Inland Revenue, it is unlikely that Inland Revenue will actually recover the money. One has to then ask, was this really a case about the money, or principle?

For those readers who are unfamiliar with the case, in the late 1980’s Russell established elaborate, maze-like structures of companies, partnerships and trusts, and provided advice on how others could avoid tax through their participation in his ‘Russell Template’. The fight between Russell and Inland Revenue has been going on for over 30 years and it is unimaginable how much money and Inland Revenue resources have gone into trying to incarcerate Russell.

But seriously, was there really any real benefit gained by the Inland Revenue in drawing the battle out for so long and spending a significant amount of taxpayer’s money on the fight? I think the Inland Revenue knew they were not going to get any tax money from Russell. They just wanted to prove their point that you should not mess with the Inland Revenue.

Of course the issue now is how to collect the $367m! I guarantee you Russell will fight against bankruptcy but seriously, is there really any public benefit to be gained in pursuing Russell to bankruptcy and yet spending more and more taxpayer’s money when it is likely this will be unrecoverable? What is your view?

Further reading on the NZ Herald website here

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