2006 media releases
Inland Revenue revises rules on shortfall penalty application
5 May 2006
Under a recent legislative amendment, taxpayers have until 30 September 2006 to request the cancellation of some shortfall penalties.
Inland Revenue has just published a Standard Practice Statement (SPS 06/01) that sets out the grounds upon which the Commissioner will have the discretion to cancel or not to impose shortfall penalties for an unacceptable tax position.
"Inland Revenue can now exercise discretion in cases resulting from a simple mistake or oversight on the part of a taxpayer," says Naomi Ferguson, Deputy Commissioner Service Delivery.
A 2003 amendment meant that penalties for having an unacceptable tax position were being applied to a wider range of tax shortfalls than was envisaged by Parliament when it passed the original legislation in 1996.
"The penalty was aimed at cases where there was potential for very large shortfalls," says Miss Ferguson. "It should not generally apply to those who have made a clear mistake or simple oversight and then tried to rectify it."
Inland Revenue is reviewing the whole area of shortfall penalties, but, in the meantime, this change will mean that, in some cases, shortfall penalties imposed since 1 April 2003 for taking an unacceptable tax position may be cancelled. Taxpayers who meet the criteria in the SPS have until 30 September to write in and request cancellation of shortfall penalties for taking an unacceptable tax position.
"Because taxpayers only have until 30 September 2006 to apply for the cancellation of penalties already imposed, we have not gone through the normal consultation process with this SPS," says Miss Ferguson. "However we have consulted extensively with the New Zealand Institute of Chartered Accountants and have also given other interested parties a chance to comment on the draft SPS.
"Taxpayers and practitioners may still comment on the published SPS, and we will consider these comments and will update the SPS if necessary."
SPS 06/01 is available from our website and will be published in the June edition of the Tax Information Bulletin.
Other media releases this year
- It's IR 3 time - for many of us
- Owner of chain of rest homes get 21-month prison term for million dollar tax evasion
- Family assistance payments to be made early
- Inland Revenue welcomes tough sentence on tax fraudster
- False identity charges lead to jail term for Christchurch woman
- PAYE evasion leads to jail term
- Family assistance payments to be made early
- Inland Revenue welcomes Govt3 award wins
- PAYE Subsidy available for employers
- One month left to seek penalty cancellations
- Christchurch painter jailed on tax charges
- Inland Revenue can offer help to weather-affected businesses
- Prison for Tauranga contractor on tax fraud charges
- Inland Revenue confirms stand on depreciation
- Family Assistance payments to be made early
- Tax discount for new businesses
- Tauranga contractor jailed for tax offences
- Inland Revenue Flood Support
- Family Assistance to be paid early
- Inland Revenue website wins People's Choice award
- Tax due date coming up on 7 February
- Family assistance payments to be made early
Corporate Affairs
Inland Revenue
To make a media query:
Phone 04 890 1698 or email mediaqueries@ird.govt.nz
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P O Box 2198
Wellington 6140
New Zealand
Date published: 05 May 2006
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