The Tax Authority was investigating suspicions according to which Coalition Chairman MK Avigdor Yitzhaki (Kadima) enabled a former executive in a high-tech company that produces communications equipment to evade taxes valued at some NIS 3 million (about USD 685,000). According to the allegations, Yitzhaki, a former director-general of the Prime Minister's Office, helped the executive avoid paying taxes while he worked as an independent accountant after ending his PMO position. As the executive's tax advisor, Yitzhaki handled her negotiations with Israeli tax authorities for fees she earned abroad. The executive earned some USD 3 million overseas in taxable income. Yitzhaki, who handled her tax negotiations with the authorities, attributed the income to her husband as income unconnected to his work. This allowed the executive to pay a much lower tax for the income earned.
Yitzhaki: I acted legally
Responding to the allegations, MK Yitzhaki declared that he was asked to testify regarding the transaction in an investigation of another client, since he dealt with both clients during the same period. He told Tax Authority representatives that he had acted professionally, as mandated by law, and had passed on to them all relevant information in his possession that could be helpful to the inquiry. Yitzhaki also emphasized that the authorities were investigating the client, and not him personally. Attorney Ehud Barzilai, who represents Yitzhaki, said that the issue was a professional one, and dealt with the period prior to the tax reform. According to Barzilai, a former deputy income tax commissioner and legal counsel in the Tax Authority, such transactions were conducted as a matter of course during the period in question. "This is a disagreement on the civil level that does not justify an inquiry," he concluded.