According to a Channel 2 News report, Israel Income Tax Authority officials have given Rabbi Moshe Yosef, a son of HaGaon HaRav Ovadia Yosef ZT”L a bill instructing him to pay NIS 19 million in back taxes.
According to the Kol Chai Radio report, tax officials premise the sum on Rabbi Moshe Yosef’s bank account, which is used for a large gemach for avreichim that was started during the lifetime of his father, Maran ZT”L, run by Rebitzen Margalit A”H.
It is reported that tax officials view the money coming in, which is the return of loans as income. It is added that while Rabbi Yosef can document activities going back seven years, the statute of limitations for taxes is ten years and he now has to document the principal sum that was used to start the gemach back then, to explain where this sum came from.
An attorney for Rabbi Moshe Yosef explains Maran dedicated NIS 2 million for this gemach, which continues to roll the money for loans and payments, and not “tens of millions” as the report indicates.
A former income tax commissioner, Attorney Tali Yaron-Eldar told Kol Chai based on her experience, the issue is the principal sum that launched the gemach. She explains tax in this amount is usually 50% so the principal today would be about twice the amount owed, citing she is not referring to this specific case and that the sum has increased due to fine and the currency index, linkage and other factors.
She explains that often loan gemachs are run out of one’s home and tax officials view pay back of loans as income, recommending to people running such gemachs to register them as an official ‘amuta’ (non-profit). She also advises those who do not to be extremely diligent in maintaining a paper trail, documenting all relevant details.
Tel Aviv University finance expert Dr. Alex Korman adds that while some would like to believe this is the case, tax officials do not just sit around and decide a person has money so they send him a bill and the onus of proof then falls on him. He said there have been such instances but in this case the Yosef family is very powerful and wealthy, connected to Shas and the Badatz Beit Yosef, so tax officials are basing their actions on these realities, not just shooting in the dark.
Dr. Korman concludes that at the end, it is likely far less will be paid for this is how it works but one must realize if one is instructed to pay, there is a basis for request.
(YWN – Israel Desk, Jerusalem)
Join the official YWN WhatsApp status
6 Responses
I am just wondering, why is it so important to have his picture?
My next question: When a person reads the headlines, it sounds like that he on purpose was trying to avoid paying taxes, however, when you read this entire article, it is a completely different story. If a person is paying back a loan, why in the world should that be considered an income? It does not make sense.
YWN are crazy
#1 was the Gemach established as a “non-profit”?
To Avraham — I agree with everything you wrote. In terms of your last question — if you write off an unpaid loan as a loss, then I imagine one most report when it is paid as income. That could answer your question. BUT, I still don’t understand why this account would be treated as personal, unless it was somehow run as such, and not as non-profit, etc.
This is not normal
Zionflag – the gemach was not a registered non-profit because there is a lot of paperwork and reporting involved. It is not easy to comply with regulations while doing anything else constructive