Inland Revenue hits a brick wall trying to contact 14 wealthy advertisers

The Inland Revenue Department is struggling to contact 14 rich-listers implicated in a mandatory tax investigation.

Artem Rastorguev/Supplied

The Inland Revenue Department is struggling to contact 14 rich-listers implicated in a mandatory tax investigation.

  • 14 Wealthy Advertisers Failed to Respond to an IR Instruction to Complete a Wealth Survey
  • The survey was designed to shed light on how much tax the rich pay
  • The individuals could face lawsuits, but IR won’t say whether it will take that step.

The Inland Revenue has not heard from 14 of the 376 wealthy people it has asked to take part in a mandatory survey that could help reshape the tax system.

Spokesman Gay Cavill said failure to comply with his requests for information would be a violation of tax administration law, but could not say whether he was considering enforcement action.

Deloitte said last year that failure to comply with an IR request for information could result in a $25,000 fine or three months in jail, for a first offense.

Revenue Minister David Parker ordered the inquiry into the very wealthy last year, in a bid to gather information that many believe could be a precursor to the government’s proposed tax on inheritance or another form of wealth tax at or after the next election.

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Cavill said he was unable to get in touch with the 14 people despite the “email and/or physical addresses” of the people who were to take part in the investigation at the start of the fiscal year. information gathering.

“We also had tax agent details for some of these very wealthy people.

THINGS

Revenue Minister David Parker discusses a bill that would establish principles of fairness in the tax system (video first published in May).

“The project team tried to contact high net worth individuals using all available contact details, including those of their tax agents,” she said.

The survey is now coming to an end, with IR sending out a form last month with what will be for most wealthy listers the last set of questions they will have to answer.

Cavill would not comment on whether IR went so far as to attempt to knock on the door any of the 14 wealthy individuals he had not heard from, or whether IR had now abandoned efforts to reach them.

There is no general legal requirement for people to provide up-to-date contact information to the IRS, but the Tax Administration Act states that an IR notice to someone’s last known address is “a notice effective,” she said.

“Therefore, for the Inland Revenue to give legal notice of its actions, an up-to-date address is not strictly necessary.

“It is therefore in the interest of the taxpayer to update their address and contact information so that they are aware of any action IR may take or consider regarding their tax affairs,” she said.

Parker told a select committee last week that IR remains on track to report the results of the investigation next year.

The aim was to “better understand the tax rates paid by wealthier New Zealanders”, he said.

The exercise really kicked off in November, when IR wrote to 406 people it said had a net worth of more than $20 million, asking for details of their family ties.

But 30 people were excluded from the project for humanitarian or other reasons.

IR said it attempted to contact wealthy individuals using

Tom Pullar-Strecker/Stuff

IR said it attempted to contact the wealthy individuals using “all contact details available, including those of their tax agents”.

The third, and for most people, last 21-page form was sent to the remaining people and their partners last month, seeking a wide range of financial information, most of which would not normally be known to the FISC administration.

This included information about inheritances and gifts that wealthy individuals and their partners had received in previous decades since 1970, “rounded to the nearest million dollars,” and information about their trusts, investments and interests. real estate.

IR also asked for rough estimates of their annual expenses, breaking down their spending on items such as homes, cars, overseas travel and financial products, so they could estimate the GST they might have paid. .

Responses to this survey are expected by August 24.

Tax Justice Aotearoa chairman Glenn Barclay said it would have been preferable if the survey could have included data from all high net worth individuals that IR chose to contact.

Deloitte tax partner Robyn Walker says the Inland Revenue may need to consider whether enforcement action is worth it.

Provided

Deloitte tax partner Robyn Walker says the Inland Revenue may need to consider whether enforcement action is worth it.

Barclay had no opinion on whether enforcement action would be warranted if wealthy advertisers had ignored the investigation, but agreed that if that was the case then IR might have reason to consider to audit these people.

Deloitte tax partner Robyn Walker said the question IR might have to ask when considering enforcement action is whether it’s worth the fight.

“It’s about what is the best use of resources and whether it’s better for the IR team working on the project to just analyze the huge amount of data they have.”

Taxpayer behavior was something that was considered when IR considered audits, she said.

But the very wealthy have already come under scrutiny, and IR’s previous comments indicated they were a “very compliant group as a whole”, she said.