Another IRD Win, Of Course – The Alesco Case

This stuff is boring now. For all the reasons this blug keeps banging on about, IRD have not lost a major case for over a decade, nor are they likely to from this point. If you want to read the details of this latest case, it’s on Granny Herald here.

The Cactus has written on it this morning here, and I’m going to borrow her quotation from the former article:

Ernst & Young senior tax partner Jo Doolan said this morning's decision was an "alarming result".

"Even where taxpayers have real businesses behind what they are doing, the Commissioner can still rewrite the tax outcomes, often years after the transaction is finished," Doolan said.

"This is a worrying. It reinforces the feeling of many inbound investing corporates that the NZ tax environment is too uncertain. It may discourage them from continuing to do business here," she said.

University of Auckland Business School senior lecturer in tax, Mark Keating, said this morning that the decision was a "complete slam dunk" for the IRD.

"Not much joy for taxpayers here," he said.

Look at every post on my blog: this result was entirely predictable. I simply repeat below the comment I’ve made (edited a bit) on Cactus Kate’s post:

… there's a (great) blog that runs in New Zealand with the by-line:

'Civilisation is a movement toward privacy, an Orwellian surveillance state the opposite, and tax legislation, especially tax administration, has become the legislation and administration of surveillance and authoritarian rule, in contravention of the rule of law, and common decency. '

Every member of the judiciary hearing tax cases here has been through our state school curriculum which inculcates in them the socialist ethic of the 'common good', hence they all believe the wallets of individuals and corporates only exist to be divided amongst the total population to breed the welfare state. With the classical liberal Westminster principle shamefully struck down in New Zealand, no individual or corporate will find justice in our tax courts anymore; they are only the place that outright state theft is given the official sanction. Courts that once, in proud Western tradition paid for in blood, stood between the state and the individual, have turned tail entirely, and have become the chief agents and rubber stamp of Big Brother. Through taxation and a philosophically bereft judiciary, judging over a stupid people having to fund a profligate politick, where it matters we are a hard left country, as has been the West for some time.

And not just a country immured on left politics: obviously to destroy the notion that a man's wallet is his property, and only exists to be taken and shared out equally, you need a police state, which tax administration gives the judiciary and the politicians who are happy to give IRD every privacy busting, snooping, interrogatory, seizing power they require.

Indeed, I've become bored with bringing case after case of this up, and that department's increasing use of retrospective application, proving the death of individualism, classical liberalism, freedom, in the face of a mobocracy not having a clue what I'm ranting on about, and whose only response is the slave touting of ‘why don’t you go live somewhere else’ - you imbeciles.

Find me a sea-steader with a comfortable pad and decent flush toilet system and I would seriously consider the off.

It’s no coincidence that the one revolution that has had long term good - which is being destroyed at pace - that revolution in America, started as a revolt against the taxation thugs, because taxation is where the truncheon hits a victim’s backside of the police state.

Just saying.

/rant off

Update 1:

Also unsurprising, National touting David Farrar, on Kiwiblog, is just another Big Brother Statist. Don't worry about the principles involved in this case, David, or the retrospective application, or the arbitrary state it signifies.

Update 2:

Nice comment from Brent Gilchrist, tax advisor, on the (paid content) NBR thread:

Quote:

The real problem with such outcomes is identified in the IRD justification that the taxpayer "acted outside of the intended scope" of the rules. The problem for taxpayers is that the "intended scope" is often never clear at the time new tax policy is enacted, so IRD watches use of the laws and develops it's "intended scope" policy along the way if it becomes clear that the black letter tax law creates an outcome IRD simply does not like. If the black letter tax law was badly written because it did not cover the intended scope, then amend it, under urgency if it is a big enough problem. Hell, even amend it retrospectively if the revenue leak is too big and identified too late. Then at least Parliament becomes directly accountable. Under the current approach IRD can in effect retrospectively alter tax policy, heavily penalise taxpayers for their audacity in applying the actual written law and state that their position reflects the intended scope of the law. Taxpayers then must attempt to find evidence of what the intended scope might be in order to get over the guilty till proven innocent burden on taxpayers. Trouble is, the intended scope is what IRD eventually says it is, or what IRD tells the Minister of Revenue to say it is.

Update 3:

Christchurch Press headline: 'Tax Experts Call for IRD Sanity'.

Clueless.

IRD long ago ditched the 'it's out job to be fair' subterfuge, so we know what to expect from them, running as they do, the governmental fencing racket.

Where we need sanity, read philosophy, as I've said over and over, is our judiciary. It is the judiciary that is historically there to arbitrate and keep safe the citizen from an out of control state; and that is where the capitulation has been which has caused the most harm, for the reasons I keep explaining in this blog ... the group-think we are all indoctrinated with from our most formative period of youth, by Gramsci at the head of every classroom (my by-line above). IRD will only take a case to court if they are confident on winning.

I realised years ago from watching the classical liberal Westminster principle being bloodily dismantled by a judicial bench characterised above all else by molly-coddled infantilism, that the death spin our society was in is terminal, a view given credence by tax experts having no clue to our constitutional arrangements either.

If our politicians were interested in legislating for the truly free, Western society, then in the current constitutional review, they would be looking at incorporating the Westminster principle as integral to our constitutional arrangements. But instead of that we have the opposite, statism, exemplified by that princess of the Emptiness of Airheads, Jacinda.