Man evaded €100k tax bill by deliberately not declaring wife's income
A sub-contractor for Cash and Carry Kitchens who deliberately didn't pay tax on his wife's income as a Weight Watchers leader has avoided a jail term.
George McKelvey (57), who is originally from Dundee in Scotland, acknowledged that as he and his wife, Olive, were jointly assessed by Revenue it was his responsibility to disclose both their incomes.
However, he failed to declare her profits from 2002 to 2009, which his accountant later estimated to be €309,813, and instead declared his wife as a homemaker with no income.
Revenue has since assessed McKelvey as owing them €96,893 in income tax. With €61,213 in interest, he has an outstanding tax bill of €158,106.
McKelvey of Kenure Lawns, Rush, Co Dublin, pleaded guilty at Dublin Circuit Criminal Court to four sample charges of knowingly or willingly delivering to the Office of the Revenue Commissioner an incorrect return in connection with income tax relating to the years ending 2005, 2006, 2008 and 2009 on various dates between November 2005 and January 2010. He has no previous convictions.
James Dwyer BL, defending, said that 35% of his client's income was withheld by Revenue and if that amount exceeded his own current tax liability the balance would be paid off his bill. He also had set up a monthly online payment to Revenue of €433.
Judge Melanie Greally previously adjourned the case having heard evidence. She noted from a report from the Probation Service that McKelvey was considered a suitable candidate for community service.
She suspended an 18-month sentence and ordered that he carry out 240 hours work in the community within 12 months.
Inspector of taxes Fiona Phelan told Lisa Dempsey BL, prosecuting that McKelvey was registered for tax as a self-employed carpenter and submitted a form 11 income tax return, under joint assessment declaring Olive McKelvey as his spouse, for the years 2002 to 2009.
Insp. Phelan said that there was a special compliance project in relation to Weight Watchers leaders in Revenue and Olive McKelvey was identified as a leader in Rush. It was noted that there was no record of any income she received and a letter was issued to McKelvey in March 2011 to query any profit she may have made.
In response, McKelvey submitted a summary of his wife's profit for years 2002 to 2009 which he accepted was taxable income derived from her work as a Weight Watchers leader, including profits made on products sold by her at meetings.
He was later interviewed and confirmed that he was responsible for declaring income for both of them at the time.
McKelvey admitted he knowingly filed an incorrect income tax return in relation to his wife, referred to her as a homemaker and stated that she had no income.
Insp. Phelan agreed with Mr Dwyer that McKelvey was registered as a sole trader and Revenue were satisfied that returns he made in relation to his own income were accurate. They were also satisfied that the profit he had since declared in relation to his wife's income was correct.
She further accepted that McKelvey had been co-operative during the investigation and had not been a difficult person to deal with.
Mr Dwyer said that his client was originally from Dundee and his father held a senior position in the Labour Party there. He worked as a carpenter after leaving school, met his wife in Scotland and returned to Ireland with her and their infant twin sons in 1993.
Counsel handed in a number of testimonials, including one from Rush Cricket Club where his sons played, and another from Cash and Carry Kitchens describing McKelvey as a diligent, co-operative fitter who was an important asset to their team.
Judge Greally noted McKelvey's "very high level of co-operation" with the investigation and the fact that he was always fully compliant with his own tax returns as a self-employed carpenter.
She described it as a "borderline case" that would allow the court "to consider the option of non-custodial disposal" and said that there was "a public interest in deterring the kind of conduct he engaged in".