IRD contacting our clients

Friends tax agents don’t let friends clients look at the IRD website

Taxpayers who derive income from NZ sourced salary and wages, interest and dividends with tax correctly deducted at source do not require assistance.

Taxpayers who derive any other sorts of income generally DO need assistance, and often appoint a tax agent.

In that case agreed protocols generally provide for all correspondence to be sent to the tax agent who can deal with it in a professional and timely way.

IRD continues to undermine those protocols through the IRD website, written and electronic correspondence.

IRD is constantly telling taxpayers they can handle their own affairs and misleading them into filing tax returns and paying tax prematurely.

Examples:

What IRD tells taxpayers	example	The true position
IRD Website indicates urgent action is required by use of alerts		Frequently the alerts are for routine matters, and action is not required for many months if at all
IRD Website processes default assessments with a note “Request to complete”		IRD’s default assessments leave out assessable income and deductible expenses.  When linked to a tax agent we have up to 31 March[1] following balance date ie the following year to file a return
IRD Website says to file returns		When linked to a tax agent we have up to 31 March
Website notifies 2022 terminal tax or 2023 provisional tax left to pay, opposite a link “make a payment”.  The payment link doesn’t disclose the due date – just shows how to hand over funds		Terminal tax is due 7 April Provisional tax is spread between August 2022 and May 2023
Tax return guides, even the foreign income tax return guide, have a bold stamp that says ‘Save time, do it online at IRD.govt.nz  –		IRD should be encouraging taxpayers with complex affairs to get professional assistance
We have lodged voluntary disclosures to IRD, sometimes for tax IRD may never have identified, and ask IRD to not contact our client.  IRD then writes to the client and demands immediate payment, or simply steals from another tax type.		We may have arranged a repayment plan, or purchased back tax credits through an intermediary
Sometimes IRD goes to the taxpayer’s employer or bank “You’ll need to make extra deductions from salary, wages (including bonuses and overtime) and any other payments you make to your employee”	.	This can cause serious economic repercussions
IRD staff ring taxpayers direct from a blocked number, only give a first name, and ask for personal details.  The staff wont accept incoming calls or emails.		This can soften taxpayers up for phishing calls
IRD sends text messages to taxpayers

 

 

In the real world, an exclamation mark inside an orange triangle indicates that you are about to lose your hand or maybe your life

The IRD’s messaging results in taxpayers filing returns and making payments much earlier than required, rushing their decisions and often making mistakes that tax agents are left having to fix.  Despite our guidance we even had several clients panicked into filing their own tax returns, and inevitably getting them wrong.

Others have paid IRD directly when we had already arranged purchase of tax credits. 

Ironically IRD is also busy sending tax refunds to people who aren’t entitled to them for example

• premature auto assessment of tax returns when foreign income has not yet been returned
• recently paying out cost of living credits to people living overseas

We recommend agents tell their clients to ignore the IRD website, and if they do receive direct correspondence to forward it directly to their agent who should then lodge a formal complaint.

It is time government instructed IRD to modify their behaviour

[1] Assuming a 31 March balance date