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Tax Agents Receiving Cold Shoulder From NZ Taxman

by Mary Swire,, Hong Kong

10 December 2010

The New Zealand Institute of Chartered Accountants (NZICA) has received complaints from tax agents that the Inland Revenue is refusing to speak with them when they are trying to get client tax debts resolved.

NZICA Tax Director, Craig Macalister, says that tax agents play a very large role in the overall operation of the tax system. “From giving clients guidance on their tax positions, to ensuring clients file and pay on time, to a large extent Inland Revenue and the tax system are reliant on the work of tax agents."

“Generally, there is a very good relationship between tax agents and Inland Revenue, and generally it all works very well. However, NZICA is receiving complaints from tax agents, mainly from the Wellington area, that Inland Revenue is refusing to engage with tax agents over client tax debt matters. In some cases Inland Revenue have not responded at all, and in others they have told the tax agent they will only meet if payment is received in full, and liquidation action will continue unless payment in full can be made,” says Mr Macalister.

When the financial crisis hit, Inland Revenue advised NZICA that it would take an understanding approach when taxpayers were facing debt issues as a consequence of the economic downturn. This was happening for a while, but that seems not to be the case any longer, particularly for those based in Wellington.

NZICA could understand Inland Revenue’s frustration when taxpayers continually fail to meet obligations. “However, many of these taxpayers are facing very tough times and that is the reality of the situation. It also does not help when Inland Revenue do not respond or just refuse to meet with the tax agent. Ironically also, the Commissioner is required to maximise the revenue for the Crown, and in many of the cases raised with NZICA, the return to the Crown will be little if anything after secured creditors and liquidator’s expenses,” says Mr Macalister.

TAGS: individuals | compliance | tax | business | tax compliance | law | individuals in business | enforcement | self-employment | New Zealand

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