Output expense 2

Output expense 2
Adjudication and rulings

Description

This output expense provides services that contribute to people meeting payment obligations of their own accord and maintaining their confidence in the tax administration system. This is achieved by providing clear, correct, impartial and independent interpretations of Inland Revenue Acts (including other relevant laws and consideration of case law), to give guidance and (in some cases) certainty to taxpayers.

Activities undertaken:

• adjudication on behalf of the Commissioner on proposed taxpayer assessments
• providing binding rulings and other statements on the interpretation and application of the law administered by Inland Revenue.

 

Financial performance for the year ended 30 June 2006 (GST-exclusive)

Revenue $000	Expenses $000	Net surplus/(deficit) $000
6,982	7,155	(173)

 

Output 2.1 Adjudication

Description

This output involves:

• providing a technical review of existing taxation disputes referred to the Adjudication Unit
• issuing an adjudication report to the parties concerned
• issuing, where required, an assessment consistent with the conclusions of the technical review.

 

Performance measures

	Budget	Actual
Quality
We will ensure that all adjudication reports supporting each decision meet the purpose, logic and alternatives standard.		Achieved
Timeliness
On average, we will complete all adjudication cases within 20 weeks of receipt of all necessary information.	20	28.333
33 The average time from allocation until completion of cases reduced substantially from last year. The large number of cases received in the fourth quarter of 2004-05 impacted on our allocation time for the whole 2005-06 year and consequently, our ability to complete cases within 20 weeks.

 

Activity forecast

	Budget	Actual
Quantity
We will complete an estimated 50 to 70 adjudication cases.	50-70	82

 

Output 2.2 Rulings

Description

This output involves:

• considering applications for and providing binding public, private and product rulings, and statutory determinations
• developing and publishing non-binding statements on the Commissioner's view of the law administered by Inland Revenue, for example interpretation statements and interpretation guidelines
• preparing and publishing statutory determinations and valuations (for example livestock valuations, taxpayer-specific accruals and depreciation determinations) and handling technical correspondence about these matters.

 

Performance measures

		Budget	Actual
Quality
We will ensure that all reports supporting the decision to issue, or decline to issue, a private or product binding ruling or determination (and any letter setting out the reasons for these decisions), meet the purpose, logic, alternatives and practicality standards.			Achieved
We will ensure that all public items giving the Commissioner's view of the law meet the purpose, logic, alternatives, consultation and practicality standards.			Achieved
We will ensure that all technical correspondence is correct, complete and clear.			Achieved
Timeliness
We will deliver at least:
	50% of draft private and product binding rulings and draft taxpayer-specific statutory determinations within 3 months	50%	57.7%
	70% within 5 months	70%	73.2%
	80% within 9 months	80%	91.5%
of the receipt of any additional information necessary and the applicant accepting the cost estimate.

 

Activity forecasts

		Budget	Actual
Quantity
We will finalise the Commissioner's ruling for an expected 700 to 1,100 technical issues contained in:
	applications for private and product binding rulings accrual and taxpayer-specific depreciation determinations technical correspondence.	700-1,100	48034
We will publish or finalise consideration of an expected 30 to 50 public items, giving the Commissioner's interpretation of the law.		30-50	30
34 A number of matters contributed to the rulings finalised for the year being below forecast. We carried out a substantial amount of work on a project, but were unable to count the issues because we have declined to rule under the Tax Administration Act 1994. We were unable to finalise 215 issues contained in draft rulings issued before 30 June because we were addressing agent submissions and waiting for agent responses.

 

Output statement: Adjudication and rulings
for the year ended 30 June 2006

Actual 2005 $000		Actual 2006 $000	Main estimates 2006 $000	Final voted 2006 $000
	Revenue
5,351	Crown	6,135	5,885	6,135
643	Other	847	1,140	1,140
5,994	Total revenue	6,982	7,025	7,275
	Expenses
6,459	Annual appropriations	7,155	7,025	7,275
0	Other appropriations	0	0	0
6,459	Total expenses	7,155	7,025	7,275
(465)	Net surplus/(deficit)	(173)	0	0
922	Output 2.1 Adjudication	1,837	1,112	1,152
5,537	Output 2.2 Rulings	5,318	5,913	6,123
6,459	Output expense cost	7,155	7,025	7,275

 

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