DOUBLE STANDARDS: Tax lecturer Dr Lisa Marriott says her research reveals serious variations in sentencing.

White-collar criminals evading the taxman are far less likely to go to jail than blue-collar fraudsters, new research shows.

The unequal treatment of rich and poor will now be further investigated by a Marsden Fund grant recipient, who says tax cheats are costing the country billions more than welfare cons but rarely see the inside of a cell.

"They have the same victim - the government and society - yet one is punished much more harshly than the other," said tax lecturer Dr Lisa Marriott of Victoria University. "The study does indicate there is a fairly serious problem there."

In her pilot study examining three years of tax evasion compared to welfare fraud in New Zealand, Marriott found that welfare fraud was significantly more likely to be prosecuted than tax crime.

This was despite huge differences in scale.

In 2010 alone, tax evaders cheated the country of between $1 billion and $6b, while welfare fraud cost $39 million.

The average offending for welfare fraudsters was $70,000, and those found guilty had a 60 per cent chance of being jailed.

For tax evaders the average was $270,000, but those found guilty had only a 22 per cent chance of being jailed.

The cases were barely comparable. For example, a welfare fraudster who stole $148,000 - at the upper end of the scale - received 18 months in prison. Meanwhile, a tax cheat who failed to pay $222,000 in tax - at the lower end of the prosecution scale - got eight months' home detention and 250 hours' community service.

Marriott said the reasons for the differences in sentencing were not obvious.

"The sentences are intended to reflect society's views. And it seems we take a dimmer view of people on welfare - even the language is more punitive," she said.

Marriott found that attitudes towards tax evasion were indulgent, even occasionally admiring, while beneficiaries were considered "scroungers or cheats".

Auckland Action Against Poverty spokeswoman Sarah Thompson said that perception needed to change. "We have a cult of prejudice against beneficiaries. This research shows not only is that belief unfounded, but it's wrong. Tax evaders are ripping off the country to a much greater extent than beneficiaries are."

Auckland law professor Bill Hodge said the legal discrepancies could have evolved because of the complexities in tax law compared to the "black and white" welfare law.

"There's greater clarity [with welfare fraud] because of the amount of paperwork beneficiaries are required to fill out," Hodge said.

"Whereas the spectrum of tax minimisation to evasion, which is unlawful, has a lot of grey areas."

Marriott will further investigate sentences for fraudsters and the reasons behind them to complete her study, called The Colour of Crime: Investigation of attitudes towards blue and white-collar offending. She received $345,000 from the Marsden Fund to carry out the work.

SENTENCING EXAMPLE:

Blue collar – serious examples of welfare fraud:

Offending of $106,000: 20 months' prison

Offending of $121,000: Eight months' prison

Offending of $128,000: 18 months' prison

Offending of $148,000: 18 months' prison

White collar – examples of tax evasion

Offending of $222,000: Eight months' home detention and 250 hours' community service

Offending of $230,000: Six months' community detention

Offending of $500,000: 12 months' home detention

Offending $683,000: 30 months' prison