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'Segye' stated that according to insiders of The National Tax Service, 30 personnel were sent out to the SM Entertainment headquarters to collect various documents and records that may provide evidence of tax evasion. The media outlet states that rather than giving the agency a 10 day notice ahead of time, which is what happens in the case of regular routine check ups, The National Tax Service did not give the notice until the day of as this was being treated as a special investigation and they wanted to make sure there was no time for the agency to tamper or destroy evidence.
According to 'Segye's report, the agency is said to have set up various paper companies in Hong Kong and such under the name of famous artists, and hid the earnings from overseas concerts in the paper companies instead of reporting them on their tax documents.
However, SM Entertainment has released an official statement to deny that there was a special tax evasion investigation going on targeting the agency. They wrote, "We are sending our official statement regarding the report about the tax investigation... There is no truth to the contents about tax evasion, and we are simply under a normal routine investigation following the one we also completed back in 2009... Please refrain from making assumptions based on groundless rumors."
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