New IRD update incorrectly penalises New Zealand couple

Thursday 30 May 2019, 12:52PM
By Media Giant

As Inland Revenue rolled out their first batch of tax assessments under the new automated IRD system, a couple in their 70s have reported that they were incorrectly told they owed more than $10,000 in tax, penalties and fines by Inland Revenue.

Their daughter, Auckland accountant Melanie Gabriel, helped them fill out their IR3 tax returns using the tax department's new computer system. The couple had overpaid provisional tax so were due a refund, but Inland Revenue's new income tax system did not take the provisional tax they had paid into account.

Gabriel issued a complaint to IRD, which she stated she felt was poorly handled, resulting in her parents' online access to myIR being ancelled by Inland Revenue on the assumption they had disclosed their passwords to their daughter.

"The system had processed the return, but the calculation was flawed and did not deduct the provisional tax paid. The error was consistent on both accounts.I cannot stress enough how immensely stressful this was for a couple of pensioners who are meticulous about their tax affairs," Gabriel told reporters.

Inland Revenue spokesman Baden Campbell responded to the incident, indicating the organisation was "investigating this matter, looking at how the complaint was handled and whether or not there are other instances of this kind” with the new tax system continuing its automated assessments until July, 2019.

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