Plans to hire 300-400 Inland Revenue staff to administer KiwiSaver are yet another example of the Labour Government’s public sector hiring binge, says National Party Associate Finance spokesman Craig Foss.
“This hiring will increase IRD’s staff numbers by around 8%. IRD already has 5,358 full-time equivalent staff on its books.
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Inland Revenue will get more say over who is fit to be a tax agent under new powers proposed in a Government discussion paper.
The paper reviews tax compliance and penalty rules and suggests relaxing some penalties where there has been genuine consistent attempts to meet the rules, while extending others.
It proposes tougher criteria and scrutiny for tax agents, with the IRD Commissioner getting the discretion to bar an agent to protect the integrity of the tax system.
Potential grounds for disqualification may include a history of non-compliance in an agent’s own tax affairs, any convictions for dishonesty, breaches of professional rules, and bankruptcy or insolvency.
At the moment IRD has only limited restrictions on who can be a tax agent, and cannot refuse a listing even if an agent has a long record of tax breaches or has been convicted of serious dishonesty offences.
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Inland Revenue spent $864,000 on a tv show aimed at small and medium-sized businesses that attracted woefully tiny audiences, says National Associate Economic Development spokesman Chris Tremain.
NBR has reported that IRD supported the production of “Business is Booming� to the tune of $72,000 an episode. On a dollar-per-minute basis, the show cost four times more than current affairs show Agenda.
Average audiences for the Saturday morning screenings were 34,700 viewers aged 25-54, while the Tuesday night screenings only attracted 25,400 viewers.
“While the IRD funding might have been well-intentioned, it is disappointing that the show cost so much and so few people watched it.
“The timing of the show was poor. Saturday mornings aren’t a good time for anybody – including busy small business owners.
“IRD should rethink its support for this show – especially in its current time slots.
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A former Inland Revenue Department (IRD) employee with a “fragile mental state” pleaded guilty to three charges of fraud in the Wellington District Court yesterday.
Vernon Duckmanton had been charged with 125 charges of fraud but defence lawyer Val Nisbet and crown prosecutor Grant Burston agreed to a revised plea of guilty on three representative charges.
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The Treasury says it has revised up its tax revenue by $1.8 billion for the year ended June 30 due to changes in accounting methods.
The Treasury says the adjustment is one-off and reflects the period of transition between methods and should not be mistaken for an increase in the government’s underlying tax revenue.
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The tax department is again investigating developer Dave Henderson, who this week officially opens his $2 billion “whole new town� near Queenstown.
Henderson’s previous battle with the IRD – which left him bankrupt but triumphant -is being made into a movie by Whale Rider producer John Barnett.
Henderson said the movie, which will tell how he fought the IRD for four years, eventually winning a $65,000 refund after it claimed he owed it $1 million, would start filming in January for an October release.
Henderson’s good mate and Act leader Rodney Hide, who helped him write a book about his experiences, will on Saturday turn the first dirt on the Five Mile development. Described in its publicity blurb as a “whole new town�, Five Mile stretches across 33ha near Queenstown airport.
Henderson, who was discharged from bankruptcy in 1999, said the IRD this year began back-auditing five years of his dealings. He said the IRD wouldn’t let go and their officials’ “children’s children� would be investigating him. “I’ve just learnt to live with it … I’m up for whatever they throw at me.�
A spokeswoman for the IRD declined to say why the department was again investigating Henderson, saying it was unable to detail specific taxpayer affairs.
Follow up: Article in NZ HeraldÂ
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The IRD has updated the audit section of their website.
This is interesting:
We may choose to audit you for any one of these reasons:
* to analyse your business accounts or tax returns
* to check someone else’s records (such as your employer, or a bank that pays you interest) and matching them to your records
* information received in another audit, which suggests that your records should be checked
* your compliance record (whether you have kept to the tax laws in the past)
* your payment record (whether you have paid your taxes on time in the past)
* selecting a particular industry
* examining a particular issue or problem that affects a group of taxpayers
* where you live, or run your business (if we are auditing a particular area)
* local knowledge, perhaps arising from media reports or unexplained wealth
* information we get from other people about you, or
* we may choose you randomly.
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 A change in the Inland Revenue’s guide for individual income taxpayers could lead to some people underestimating the tax they owe and having to pay up later – even if they have done exactly what the IRD says.
It affects independent contractors who are registered for GST.
Their incomes may include payments that include GST.
The guide tells the contractors to enter the GST-exclusive amount at question 12 of the IR3 tax return, which records income, but also to include the GST at question 26, which relates to deductible expenses.
This appears to allow people to deduct the GST twice, and is a reversal of the instruction in last year’s guide, which was to show the gross withholding payments (including the GST) as income and deduct the GST later.
Accountants warn that a defence of following IRD instructions does not get a taxpayer off the hook if what the department says is wrong.
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A judge had some unflattering words to say about Inland Revenue yesterday as the department tried to liquidate a West Coast company.
During a civil hearing in the High Court at Greymouth, Justice Anthony Christiansen described the IRD as “lurking in the background like a shark waiting to consume failing companies”.
The comments arose following an attempt by the department to liquidate possum skin company Gray Fur Trading. It said the company owed almost $200,000 in overdue income tax and GST, but the court was told the facts revealed that almost half that amount was added on in costs and penalty payments.
The initial debt was closer to $90,000 but ballooned from 2003, when the company was first advised it was in trouble, and again in October 2004 when the IRD answered correspondence sent in reply to its demands the previous year.
Gray Fur Trading lawyer Bev Connors said a crash in the international fur market had hurt the company and Justice Christiansen agreed, saying the crash had hurt a lot of businesses.
It was then the judge compared IRD with lurking sharks.
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