 Victor Song, chief of Internal Revenue Service Criminal Investigation, speaks in a joint press conference at the National Tax Service (NTS) in downtown Seoul, Tuesday. / Korea Times photo by Shim Hyun-chul |
Victor Song, who is leading the U.S. Internal Revenue Service Criminal Investigation (IRS-CI) team, said Tuesday that his team is keeping a close watch over American private equity funds operating in Korea for tax evasion.
“Private equity funds and hedge funds are areas where our interest lies,” said Song in a news conference at the National Tax Service (NTS) in downtown Seoul, Tuesday.
Lone Star Funds, the holder of a controlling stake in the Korea Exchange Bank (KEB), and Carlyle Group, which has reportedly dropped its bid to invest jointly with Hana Financial for its KEB takeover, are among U.S. private equity and hedge funds operating in Korea.
Lone Star, a Dallas-based private equity fund, may face another battle with Korean tax authorities.
The NTS plans to impose taxes on its profits, while Lone Star argues it does not need to pay them as its main business was done in its affiliate in Belgium, which has no tax treaty with Korea.
The senior U.S. tax investigator said that both countries share the same vision “to ferret out tax evasion on both sides.”
The third-generation Korean American from Hawaii said that his organization is determined to account for overseas tax sources, obviously reflecting growing U.S. deficits that the government is required to plug.
“We are more interested in U.S. taxpayers overseas,” Song said, asked whether a closer tab is being given to Korean corporations and individuals who are using the U.S. as a haven of sorts for untaxed slush funds. Song’s visit came at a time when NTS is stepping up efforts to uncover untaxed overseas assets and increase tax revenue to 1 trillion won.
NTS said Song is the first chief of the IRS-CI, who visited Seoul officially. NTS and IRS are strengthening their partnership on international tax evasion since both sides agreed the Simultaneous Criminal Investigation Program (SCIP) agreement in August 2010.
“IRS-CI Chief Song came to Seoul to discuss cooperation between the two nations. We talked about many subjects, including exchanging investigators and sharing education programs,” said Park Yun-joon, NTS assistant commissioner for international taxation.
International cooperation is critical in order to prevent tax evasion and money-laundering attempts, Song said, adding that both countries have joined hands with international groups such as the Organization for Economic Cooperation and Development and Interpol for that goal.
Song, a Korean American, joined the IRS in 1981 and became a special agent in Honolulu, Hawaii in 1983. The son of Korean immigrants has been in charge of numerous IRS-CI offices before becoming a senior executive in 2004. He became deputy chief in 2007, and took the helm of the division in January 2010.
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