Korean Job Discussion Forums

ajstew · Joined: 04 Feb 2004 Location: Korea

I began working in Korea just about 4 years ago at an English Institute. After the one year there, I moved to work in a university for two years and am in another university now. But I've still managed to stay in contact with the institutute owner and have helped him hire a couple of teachers over the past few years (including a family member) who just began working for him about two months ago. So anyway, a few days ago the owner of the institute calls me and tells me that there is a problem with the income tax from when I worked there in 2003 (as I said, about 3 years earlier) and he says that they have a bill for me for 1,300,000 won and it has to be paid in one week. He also tells me that he thinks this must be a problem because other teachers do not have to pay that kind of money... but nevertheless, he insists we get together this morning to go to the income tax office to talk about it... but he does hint that it is purely my responsibility to pay it. I agree to go to the office, but wonder about the entire situation and whether what is being asked of me is entirely fair. Firstly, does anyone here who works at a hagwon ever get a bill for income tax after they finish working at the place, or is anything over the monthly dedutions covered by the employer usually? Secondly, am I required to pay the bill (and especially almost 4 years later)? Also, could his asking me to do this be trying to take advantage of the fact that my family member just began working there? Lastly, there are other circumstances about the whole situation that could have an impact on what is going on. For instance he had me working at an elementary school during the same time, but unofficially, if you know what I mean. This led to some larger paychecks than an institute would normally pay. At any rate, luckily I held on to my final paycheck details that indicate how he didn't pay me the minimum 2,200,000 over the final two months of my contract (paid me 1,335,000 instead) so at least I could technically say he withheld 1,728,600 from my paychecks and that that would cover the extra income tax bill he has. So... any thoughts on how I should proceed and about what may be going on?

Grotto · Joined: 21 Mar 2004

You are still in contact with this thief? Shocked

Lets get this straight...he ripped you off for 1.7 mil over the last two months of your contract and now claims that you owe an additional bill of 1.3.

Ignore the stupid sot.

1. If you owed money the government would be the one coming after you.
2. Your taxes on 2.2 mil a month work out to be about 350,000 won over a year.....so the figure he has come up with is way way out to lunch!

If you want to find out what is going on contact the tax office for any information before going in with your ex-boss, refuse to sign anything he puts in front of you and slap yourself for putting other people (including a family member) in contact with this thief.

You made your bed now go lay in it!

IwalkAlone · Joined: 30 Nov 2005 Location: Daegu

There's a chance he got caught (audited) and back taxes that he may have never paid are now being demanded. There is also a fee of maybe 20% on owed tax and it increases as the period of evasion increases. He may be trying to get you to cover some of his burden for not paying taxes. I wouldn't know for sure, but I wouldn't rule such a scenario out. Like grotto said...very important not to sign anything and also do no let your ARC and passport into your old employers hands as he might try and sign you up for something.

Luck to you

ontheway · Posted: Wed Dec 21, 2005 7:50 am Post subject:

oops. double post.

ontheway · Posted: Wed Dec 21, 2005 7:51 am Post subject:

ajstew,

Here's how your problem sounds to me. You worked at an English Institute in 2001 (?) and your employer withheld taxes from your pay. But, it sounds like you never filed a tax return. Your employer may have underwithheld on your taxes so that you owe taxes, penalties and interest. Your employer may have reported your income but paid in nothing so that you owe taxes, penalties and interest and your employer is liable as well. Or, the tax office (or someone typing in data somewhere) could have made a mistake and the taxes withheld and paid in by your employer are really about right after the mistake is found and corrected.

You asked can you be liable years later. These are your taxes so the answer is probably yes. (If Korea is like the US which I suspect they copied in part.)

If your employer paid in everything he withheld from you, then you are probably 100% liable for the balance due. However, your employer could be held liable too, as a "responsible party".

But, maybe your employer didn't pay in what he withheld. Even if your employer withholds all of your taxes: national, local, pension (face it. It's not savings, it's a tax), etc., if your employer DOES NOT PAY THEM IN, you could be forced later to pay these amounts. Your employer may be liable too, but the tax office just wants the money. They usually attempt to collect from the easiest "victim". If you file a return every year, these unpaid taxes come to light quickly. If you don't file a tax return, these things can bite you years later.

A mistake. If the tax people made a mistake, they may be reluctant to fix it. The IRS makes billions of dollars of errors in overtaxing people, but they almost never admit errors. They keep the money if they can. They deposit every check they receive, even if it's not made out to the IRS, and even if no party to the check actually owes money to the IRS. They are professional thieves with no honor.

So, perhaps a trip or phone call to the tax office is in order to get info. Say nothing and admit nothing. You need information first. Ask questions. Be nice. Act honest and confused (that should be easy, this whole mess sounds confusing and I'm sure you wanted to be honest). " I don't understand. I need to find out more about this." Get as much info. as you can from your old boss first. Be friendly with him, too. You want to keep the tax people and your old boss on your side as long as possible.

Finally, don't trust anyone: your old boss or the tax office. You need a Korean friend who speaks English well and is on your side completely to go along with you. Eventually you may need a tax accountant or lawyer, but that's expensive. Try to start with a friend.

Good luck. This is most unfortunate.

bellum99 · Joined: 23 Jan 2003 Location: don't need to know

The thing is:

1: The tax people can get your address. I have been mailed by the NTS in korea about a tax problem.

2: They would have no reason to get your boss to call you three years later. It is insane.

3: The boss is totally responsible if he deducted the taxes but didn't pay it to the NTS.

--He is trying to screw you. I would ignore the problem totally and not go. You going with him gives him credibility and his story sounds more believable to the tax people. He is doing a song and dance right now for them and hopes you will cover some of his debt. DO not admit to the higher salary. Admit only to the amount your contract was for. They will contact you if they want to talk to you.

ontheway · Posted: Sun Dec 25, 2005 4:50 am Post subject:

Unfortunately, Bellum's answers are not accurate:

1. Government offices often can't find people or their addresses. Even people who are working for the government. So, it's possible they contacted a former employer.

2. ditto plus it could be a problem involving both parties

3. Most important. Your income tax liability is YOUR responsibility. If your employer withholds the money, but doesn't pay it in ... OH LORDY, watch out. In the US, the IRS can collect this unpaid liability from almost anyone they choose. The employer, if he has the money. Any former officer, accountant, bookkeeper, lawyer or even secretaries who could have sent in the money. And of course, the employee is ultimately liable to pay. True, he already did pay. But that's irrelavent. It's still your obligation. Your employer was only collecting and paying on your behalf for your benefit. It's unfair but it happens often. It's the law. The only answer is for the world to repeal all taxes on income and property and finally be free of this facist tyrrany.

Jaygee · Joined: 03 Dec 2005 Location: Seoul

On the taxes subject, my employer (hagwon) told me that paying taxes was not mandatory so since he hired me in August, I don't have deductions for taxes on my payslip so obviously I don't pay them. Am I in trouble or could I be?

ontheway · Posted: Sun Dec 25, 2005 6:35 am Post subject:

If your employer deducts nothing, you have the option of paying them yourself later, to be legal and safe (and open up a big can of worms), or you can keep the extra cash and go home richer. You could get caught. Odds are low, but increase the longer you stay in Korea.

bellum99 · Joined: 23 Jan 2003 Location: don't need to know

Are you joking? They can't find our addresses? We HAVE to report to immigration when we change addresses because we pay a fine when we don't. We are the easiest people to find! You don't know what you are talking about. Of course they can contact the OP.
I bet money most people take their contracts to immigration and change their addresses then too. Nice bit of bad information you gave there.

ontheway · Posted: Sun Dec 25, 2005 6:52 am Post subject:

Sorry Bellum,

It's completely accurate information. In the US thousands of people who "owed money to the US" were unlocateable by the IRS and numerous other agencies. The media found them in phone books, at the addresses they were supposed to be at, and even working for the government itself. You should never underestimate the stupidity and incompetence of government. It's always worse than you think. In fact, surprisingly, it's always worse than I think!

IwalkAlone · Joined: 30 Nov 2005 Location: Daegu

Would just like to mention the best legal advice that can be found regarding tax problems. File your taxes every year and save your report and you arse will always be covered. If your school claims to be filing on your behalf, make a visit down to your district tax office and bring your ARC. The agent there can give you the amount of tax you've paid for the tax year and after your school files, you can let them know you expect a refund (depending whether you overpaid or underpaid) or you'll be re-filing. Doing this will save you headaches in the future. If your school is filing, also you shoud ask for a copy for bookkeeping. It's good to have copies of previous filings up to about 5 years.

Any school that won't help you with filing or is "secretive" I would pull the plug on immediately.