IRD Mini-Daily-Horror Files the Tooth.

Oh dear, someone’s had too much time on their hands at Christchurch IRD:

In line with the changes made at Inland Revenue regional sites, our service to tax agents will now be managed by the Christchurch Community Compliance team.

While there are no changes to the services that Inland Revenue provide to tax agents, there will be changes to the contact point and contact person.

 -The term ‘Agent Account Manager’ has been replaced by ‘Account Manager, Community Compliance Officer’

 -You could be assigned a new Account Manager for your face to face visits and performance monitoring

-Instead of contacting your Account Manager directly, please now use the email address below for all enquiries that can’t go via normal channels (eg requesting AMBR reports) as well as any exceptional issues [snip email address]

Our Community Compliance team are experienced Inland Revenue staff who will be mentored …

Well, if they’re ‘experienced staff’, why the mentoring? Anyway, reply sent back to the new contact address:

Dear Community Compliance Officers

Please note I wish to lodge my objection at changes to my agent/account manager relationship announced by your email of 13/3/2013. I don't want to be dealing with a 'Community Compliance Officer'; after my laughter at the community bit (don’t take offence, but you’re IRD), and the "eye roll" at the Compliance Officer bit (yep, the big stick, IRD right back again), I know this is going to be a bad idea. I’m a grown-up, for twenty two years I've basically achieved 100% filing, year on year, so I don't need a compliance officer regarding my client filings, just a ‘colleague’ to smooth out the odd problem that comes along. Indeed, there's some sort of weird PR meltdown between the oxymoron of the fluffiness denoted by the community bit, then the coercive overkill of the compliance bit – good cop and bad cop within the same officer: it just doesn't work on paper, as it won't work in actuality. Perhaps as a taste of what’s to come, I note the email (13 March) announcing what are major changes in how agents/accountants interact with IRD, didn’t even have a subject line - I almost ditched it as spam until I noted the sender. And the timing of these changes are appalling, almost as if you were going for maximum inconvenience for all of us.

I can sum up my position as follows:

I am no longer to work through a single account manager, I am to send issues to a faceless email address, and I'll be contacted back, if I'm lucky, by a Community Compliance Officer: I suspect this simply means inconvenience and run around. A one on one relationship with an individual is what gets stuff done, always, especially when working with bureaucracies. I have a great relationship with my current account manager, who puts up with me, and who has always smoothed out and solved those administrative niggles that arise from time to time, including through the earthquakes. I want to carry on dealing with an individual, not a nameless, faceless email address. That never works. I can guarantee your changes are going to add to bottlenecks, not resolutions.

I'd write much more on this, but my time is needed to complete my years work by Easter; on average I’ve been putting in twelve hour days since January 28. There is one single client that I may possibly not make due to unforeseen circumstances – information required from an earthquake affected trustee (Perpetual): my account manager would normally have resolved that with an additional time extension by a quick phone call at no more waste of my time than a few minutes, but I'm now wondering by going through the new Community Compliance Officer how many hours I'll be repeating myself to how many people you've stuffed the chain of communication up with. Please leave us able to talk to individuals who know our practices and histories, which in itself cuts a lot of repeated 'explanatories' having to be attached to every correspondence. Please leave us with our account managers and the existing agent/IRD system. That is, nothing was broken, there was nothing needing to be fixed. And please, please ditch the group-think and the silly names department :)

Thank you.

Mark Hubbard

Today’s Mini-IRD Horror File

Just two things which seem beyond me today:

First, the below is a reply to a simple query on why a client, with extension of time, was showing as having terminal tax not payable until 7 April coming, as ‘owing immediately’ on their assessment with penalties for ‘late payment’. You’ll just have to take my word that the below answer through online correspondence doesn’t actually answer the question at all, indeed, missed it entirely – you’ll have to take my word for it, because you figure it out otherwise.

Thank you for your email regarding terminal tax.
The reason the penalties have been charged is that the provisional assessment is usually based on the residual income tax (RIT)for 2011 but as the 2011 return was not filed before the first provisional tax instalment was due it is based on the 2010 year. The provisional assessment for 2012 was $5025.00. Then as the RIT was under the $2500 for 2010 they are not liable for the first two prov tax instalments for 2012, therefore when the 2012 Income tax return is filed the RIT is lower than than the provisional tax assessment therefore the provisional tax assessment is the same as the RIT for 2012. The only provisional tax instalment was due on the 28 June 2012 $3591.64. Your client had only paid $2562 therefore was short by $1029.64 and this is the reason penalties have been charged.

My second is an on-going horror with a company client who due to a mix up between paying provisional tax on the ratio option and the traditional safe harbour uplift option ended up overpaying their 2011 provisional tax by $80,000. One would think as the company at all relevant times has had enough imputation credits in its account – there must be enough credits to match all refunds - it would be a simple matter of getting the overpayment refunded.

Don’t be silly.

After filing the company’s 2011 income tax return we assumed the overpayment would be refunded as, then, a terminal tax refund. It was not.

I rang IRD to ask them to release the credit showing in the 2011 year, but it was unfortunately by this time into the 2012 year, so they said I had to file an interim Imputation Return, which I did. I then asked – stupid me, I should have kept checking up on it – the client to advise me if the amount wasn’t refunded by the end of that relevant month. They didn’t check in with me, but it was not. We were then into the 2013 tax year, so when they brought me their records we decided to get their 2012 year tax return filed, with its imputation schedule as that should then release the $80,000 credit in the 2011 year. I filed that return two weeks ago, we’ve just got the assessment back, all figures correct, however the overpayment is still being held to credit of 2011 year, not refunded. I’ve just rung IRD to ask could they please now release the $80,000 to be told although I had filed the company 2012’s income tax return, it could take up to ten weeks to process the included imputation return – PARDON, this is all on electronic efile – which may well take us beyond the end of March and into the 2014 year, at which time I’ll have to file an interim imputation schedule.

Mr Dunne. … Mr Dunne, Mr Dunne, Mr Dunne, what have you done?