At the beginning of 2026, the State Administration of Taxation (SAT), in conjunction with local tax authorities and public security organs, investigated and dealt with a large tax-related illegal case of Zhonghui Financial Consulting Company Limited in Lu'an City, which was exposed by CCTV and became a landmark case of the regulation of tax-related intermediaries in the country. This article is strictly based on the official notification of the tax department and the audit file, complete review of the core details of the case, warning all types of enterprises to adhere to the bottom line of tax compliance, and prudent selection of tax-related service organizations.

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01. This tax company, why on earth would it be investigated?

(hereinafter referred to as "Zonghui"), a large-scale local tax-related intermediary organization in Lu'an, mainly provides services such as bookkeeping, tax declaration and "tax planning" consultation, and has acted for more than 6,000 enterprises of various types. The company has represented more than 6,000 enterprises of various types.

As verified by the audit.Since its operation, Zonghui has been engaging in tax-related illegal activities for a long time under the gimmick of "low price accounting".The company has its own tax evasion and tax evasion behavior, but also abetted and assisted the commissioned enterprises to implement illegal tax-related operations, forming a complete chain of violations, and was eventually investigated by the tax authorities in accordance with the law.

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02. The core reasons for the investigation and prosecution of Zonghui

It is not by chance that Zonghui was investigated, nor was it reported, but the tax department was locked through the big data wind control warning.

(i) Labor company exceptions

The tax department found that 11 local construction labor companies in Lu'an had obvious signs of abnormal operation in their daily big data supervision:They are all registered in the same time period, the registered addresses are concentrated in the same villages and towns, the tax personnel are highly overlapping, and there is a cyclic operation mode of "batch registration → centralized invoicing → quick cancellation".

After the completion of the write-off, there are seven similar labor companies with the same mode of registration, invoicing, such standardized, large-scale shell operation, not an ordinary business can be completed, initially locked into the professional tax-related intermediary dominant

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(ii) Agricultural cooperatives: $316 million invoiced over three years

Two agricultural cooperatives that are affiliated with Zonghui, tax data show, areCumulative vegetable invoices amounting to $316 million in three yearsHowever, after field verification, the two cooperatives actual scale of operation is extremely small, only has 500 acres of planting land, the annual production capacity of less than 1 million yuan, the amount of invoicing is the actual production capacity of more than 300 times, and the invoicing price is seriously deviated from the market (seasonal vegetables invoicing price is higher than the anti-seasonal vegetables), obviously does not conform to the operation of the common sense.

Further verification revealed that the entire process of bookkeeping, declaration and invoicing for the two cooperatives was handled by Zhonghui.Farmers are completely unaware of the invoicing behavior and are suspected of malicious false invoicingThe

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(iii) Clues are summarized and locked, and investigations are initiated

The above two major anomalous clues were cross-checked by the tax department, and all of them eventually pointed to Zonghui.

In order to thoroughly investigate the facts of the violation of the law, the tax department formally set up the "11-07" special inspection team, on November 7, 2023, the company filed a case of investigation, a comprehensive investigation of its business practices and agents of the enterprise's tax-related situation.

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03. Complete audit process: from door-to-door to ironclad evidence

The audit work in this case lasted two years, strictly follow the legal procedures, through the "door-to-door verification - law-resistant disposal - data recovery - penetrating thorough investigation" four steps to promote, and ultimately form a complete chain of evidence, to ensure that the case investigation and handling of lawful and compliant, justice.

Step 1: In-home inspection

Tax officials came to the door with formal documents and asked for paper vouchers + electronic account sets. Zonghui was only willing to give part of the paper accounts, but refused to hand over the electronic data.

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Step 2: Dramatic Resistance

The person in charge is going to make a copy of the electronic data.He grabbed the laptop with the core data and ran away., employees collectively deleted files and destroyed data, falsely claiming that the computer was "thrown into the river". In order to curb the illegal behavior, the inspection team immediately contacted the public security organs to intervene and synchronize the work of personnel control and evidence recovery.

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Step 3: Police Involvement + Computer Recovery + Data Recovery

The public security organs recovered the laptop computer taken away in accordance with the law, and through the recovery of professional technical departments, successfully restored 120G of deleted core data, including false bookkeeping vouchers, false invoicing records, private account collection water and communication records abetting enterprises to violate the law, etc., on behalf of enterprises by Zonghui.

At the same time, the inspection team seized 16,000 books of paper vouchers retained by Zonghui in accordance with the law, filling two large trucks, completely restoring the whole chain of operations of Zonghui's own tax evasion and assisting enterprises to violate the law.

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Step 4: Penetrating and thorough investigation

With Zonghui as the core, the inspection team initiated a penetrating verification and carried out tax inspections on more than 6,000 enterprises it represented one by one. After comprehensive verification, it was finally confirmed that Zhonghui had committed two major types of illegal acts, namely, tax evasion and abetting enterprises to violate the law, and the amount of money involved was huge and the evidence was conclusive.

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04. 4,000 companies were eventually penalized together

As verified by the audit, of the more than 6,000 enterprises represented by Zonghui, more than 4,000 had tax-related violations, all of which were directly related to the illegal operation of Zonghui.

(i) Core reasons for business implication

Crowdwise uses a fixed set of routines to "avoid taxes" for all clients:

• Split income: over 5 million on new incorporation, decentralized invoicing
• Inflated payroll: falsified personnel, all stuck under $5,000
• False invoicing: Invoicing with cooperatives, shell labor companies to offset costs
• White entry, messy costing, two sets of accounts
• Private households charge agency fees and do not declare

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(ii) Specific consequences for implicated enterprises

1. Tax penalties: all implicated enterprises were required by law to recover underpaid taxes, add late fees and impose fines of up to 5 times the amount of the tax, depending on the severity of the offense, with some enterprises' accumulated amount of back taxes + fines + late fees amounting to hundreds of thousands of dollars.
2. Credit Discipline: The relevant enterprises are included in the key list of tax risk monitoring, invoices are restricted, tax credit rating is downgraded, affecting business activities such as enterprise bidding, financing and loans, qualification approval, etc., and some of the enterprises are included in the list of tax-related defaults to implement joint disciplinary measures.
3. Criminal Risk: For enterprises with serious violations such as maliciously accepting false invoices and concealing large amounts of income, their legal representatives and financial officers are transferred to the public security authorities in accordance with the law to be held criminally liable.
4. Subsequent Supervision: The implicated enterprises will subsequently face regular supervision by the tax authorities, which will carry out tax verification on a regular basis, and the cost of operating compliance will be significantly increased, and some of them will be forced to shut down or write off their business as they cannot bear the pressure of tax reimbursement and fines.

Hong Kong company registration, annual audit, audit, accounting and tax, Hong Kong identity application / renewal, e-commerce tax compliance, difficult write-offs, Beijing company registration, Shanghai company registration, Guangzhou company registration, Shenzhen company registration, Hangzhou company registration or qualification licenses and other issues, welcome to sweep the code to add our online customer service (WeChat: jxhqcy890 / cell phone: 16625410105) to arrange for managers! Answer questions, provide professional advice and full one-on-one service!

05. Case Alerts and Compliance Requirements

1. Low price = high risk: $200 in lieu of accounts, impossible to be compliant, will only help you lay mines with false starts, splits, and fake paychecks
2. Electronic accounts are more critical than paper accounts: now check the tax first check the electronic data, a deletion of a run, a direct situational weakness
3. When intermediaries break the law, businesses will be implicated: You can be ignorant of accounting, but you must hold the line: no invoices, no false costs, no smuggling of accounts, no double bookkeeping.
4. Regulatory focus for 2026: cracking down on tax-related intermediaries: Checking intermediaries → checking enterprises → checking funds → checking invoices, closing the whole chain.

Bosses remember: financial security, not saving money, is the bottom line of living. Don't wait for the audit to come to your door, only to realize: the hundreds of dollars you saved on behalf of the accounts, and finally have to pay back with back taxes, fines, credits, and freedom.

📌 Focus on tax compliance to guard your business future

Hong Kong company registration, annual audit, audit, accounting and tax, Hong Kong identity application / renewal, e-commerce tax compliance, difficult write-offs, Beijing company registration, Shanghai company registration, Guangzhou company registration, Shenzhen company registration, Hangzhou company registration or qualification licenses and other issues, welcome to sweep the code to add our online customer service (WeChat: jxhqcy890 / cell phone: 16625410105) to arrange for managers! Answer questions, provide professional advice and full one-on-one service!