French fiscal authorities query budget minister's tax returns

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French budget minister Jérôme Cahuzac is being investigated by the tax authorities over suspected irregularities in his tax statements, notably undeclared and under-declared assets, Mediapart can reveal with the publication here of a confidential document listing their queries. The tax inspectors’ enquiry is being led in parallel to a separate preliminary judicial investigation, launched last month, into Cahuzac's suspected 'laundering of the proceeds of tax fraud' relating to evidence that he held a secret Swiss bank account before entering government. Fabrice Arfi reports.

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French budget minister Jérôme Cahuzac is being investigated by the tax authorities for suspected irregularities in his tax statements, notably undeclared and under-declared assets, Mediapart can reveal.

The investigation, in itself, does not imply that Cahuzac is suspected of voluntarily committing any irregularity.

Cahuzac is currently the subject of a preliminary judicial investigation for suspected 'laundering of the proceeds of tax fraud' which was opened last month following Mediapart’s exclusive revelations of evidence that he held, from the 1990s until 2010 and before he entered government, a secret Swiss bank account (see links to articles at the end of page 2).

Cahuzac, who last November announced his ministry was launching a crackdown on tax fraud, has vehemently and publicly denied ever holding a bank account outside France.

Mediapart has gained access to  an email written and sent to Cahuzac by chartered accountant Gérard Ranchon, who belongs to the Paris accountancy firm Norminter with which the budget minister is a client. The email, a copy of which is published here, was sent to the budget minister on December 19th 2012 at 8.15p.m. Its subject title was “Rendez-vous fiscal”, meaning “Fiscal appointment”.

In the email, Ranchon informs Cahuzac about questions over his tax returns that were raised during an appointment he had that same day with three high-ranking tax inspectors from the south Paris regional public finances office (the Direction régionale des finances publiques de Paris-Sud).

 

“The service has examined your ISF [wealth tax] statements and have informed me of their following observations,” wrote Ranchon. These are set out in a list of bullet points which begin with the suggestion that Cahuzac may have undervalued the worth of his apartment situated on the Avenue de Breteuil, in the plush 7th arrondissement of Paris, which he bought in October 1994.

“The evaluation by our agency (10K euros/square metre in 2012, 9.4 K euros in 2011, 8.4K euros in 2010) appears insufficient to the tune of 10%,” Ranchon explained.

The accountant then informed Cahuzac that the tax authorities were investigating the conditions of a loan he received from his father of 1.5 million French francs (about 228,600 euros) which was used to help meet the 6.4 million-franc (about 975,600-euro) purchase price of the apartment. “The family loan on November 14th 1994 was not mentioned in the [financial] statement of the succession of your father’s estate,” wrote Ranchon, adding: “The service has deduced that it was probably repaid and should not figure in the liabilities [declared] in the 2010, 2011 and 2012 tax statements. I think that [Ranchon’s colleague] François Szabo had mechanically carried over this sum from year to year.”

The suggestion here is that the tax authorities suspected that the supposed liability of the loan served to diminish the amount Cahuzac paid in taxes of his assets.

The third point listed in the email concerned revelations in the French press about a collection of watches stolen from Cahuzac’s home in October last year. Cahuzac was then living in an apartment situated on the Avenue Pierre 1er de Serbie, close to the Champs-Elysées. French daily Le Parisien reported that among the objects taken by thieves who broke into the apartment was a collection of watches valued at 100,000 euros. At the time, Cahuzac’s entourage claimed the stolen items were above all of sentimental value.

“The press has mentioned the theft in 2012 of valuable watches,” Ranchon continued. “These watches, even if collector’s items, should normally have figured in the ISF [wealth tax] statement.”

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