Steve Irwin’s zoo subject of Australia tax probe at The Insider

Pictures: Terri Irwin Not Selling Steve's Australian Zoo

Australian tax officials are probing the affairs of late "Crocodile Hunter" Steve Irwin and his wife Terri over an offshore scheme involving their Australia Zoo wildlife business, the zoo said on Thursday.

General Manager Frank Muscillo said the zoo, where the khaki-clad Irwin got up close with crocodiles and other wildlife at the 5,000-seat "Crocoseum," had done nothing wrong except fall victim to a "highly sophisticated case of deception."

"This situation has cost us a lot. Not just in monetary terms but in respect of our reputation," Muscillo said in a statement to Reuters, adding that the zoo in tropical Queensland state was fully cooperating with the tax investigation.

Steve Irwin was killed in September 2006 when a stingray barb pierced his heart while he was filming a documentary. His daughter Bindi and American-born wife Terri have vowed to continue his work on conservation and crocodile research.

The scheme, under investigation by the Australian Taxation Office, allowed the Irwin's zoo to claim large tax breaks by paying more than A$600,000 a year ($550,000) in fees to a Singapore-based company, the Australian newspaper said.

Muscillo said the ATO investigation was linked to a A$2.5 million civil lawsuit against Terri Irwin and Australia Zoo which was in turn tied up in tax advice given to the Irwins and their advisers by a disgraced former ATO tax lawyer."Clearly we wish we had not dealt with these organizations and people," Muscillo said. "We would certainly never knowingly have become involved or associated ourselves with anything illegal or deceitful," he said.

The zoo is being sued by a collection company over unpaid debts after the Irwins signed off on the tax scheme in 2005, before the television naturalist's death.

Steve Irwin's father, meanwhile, told Australian television in an interview to be aired next Monday that he recently quit the zoo he founded 36 years ago, and which his son made famous, because he was becoming a "disrupting influence."

"It's a strange feeling to spend half your lifetime building something up and walking away from it. I was becoming a disrupting influence, not that I meant to be," Bob Irwin told Australian Broadcasting Corp. television.

Magazine reports have suggested the 68-year-old was upset with the direction of the zoo and the high-profile career of 9-year-old Bindi Irwin, falling out with Terri Irwin.

Terri Irwin, who plans to extend the zoo to give it a "Disneyland feel" with luxury accommodation and more staff, has denied there is a rift between the two.