Technical tax area: General articles

Changes to the disputes resolution process

We have been working with the New Zealand Law Society and New Zealand Institute of Chartered Accountants to improve the disputes resolution process and tailor it more to the needs of our customers.

From 1 April 2010, we have implemented a number of administrative enhancements to the disputes resolution process to improve the timeliness of the process and provide certainty for disputants. Below are some of the main changes you will see.

Better prepared notices of proposed adjustments (NOPAs)

From now on, you can expect to see more focused notices of proposed adjustments (NOPAs) issued by Inland Revenue that are much easier to read. Notices will have a short outline of key relevant facts presented in a logical order to inform the recipient of the proposed adjustments and the reasons for them. Our legal staff will provide input earlier, and we'll strengthen our quality reviews. We'll also ensure that a NOPA is issued only once the investigation is substantially complete.

Conferences with a clearer purpose

From 1 April, taxpayers whose dispute remains unresolved after the notice of response (NOR) phase will be invited to attend a conference meeting, and offered the opportunity to have any meetings facilitated by an Inland Revenue facilitator. A number of our people have already been trained as conference facilitators, and they can attend a conference on request.

A facilitator won't have the authority to resolve issues. However, they do have the ability to determine that the conference phase is at an end, if the parties are unable to agree on this point.

Clarifying our position in the opt-out process

We now have guidelines setting out the circumstances in which we will agree with a taxpayer's request to opt out after the conference phase. For most cases these are when one of the following applies:

• the total amount of tax in dispute is $75,000 or less, except where the dispute is part of a wider dispute. The $75,000 excludes shortfall penalties, use of money interest, and late payment penalties if applicable
• the dispute turns purely on issues of fact
• the dispute concerns facts and issues already waiting to be resolved by a Court
• the dispute concerns facts and issues similar to those already considered by the Adjudication Unit of the Office of the Chief Tax Counsel in a past dispute, and
• the taxpayer has participated meaningfully in discussions during the conference phase.

Improvements in timeliness

We have set tighter internal deadlines for our staff, and these will be closely monitored. Should the dispute continue beyond the conference phase, we'll also advise the taxpayer how long it will take to issue a statement of position (SOP). In most cases this will be within three months of the conference phase closing, and internal approval will be required for cases that may take longer than three months, such as those involving complex or precedential matters.

Next steps

Revenue Minister Peter Dunne and Inland Revenue Commissioner invite feedback on the revised Standard Practice Statements, which reflect the administrative changes to the disputes process:

• SPS 08/01 Disputes resolution process commenced by the Commissioner of Inland Revenue, and
• SPS 08/02 Disputes resolution process commenced by a taxpayer

Submissions are also sought on possible legislative changes set out in an officials’ policy paper.

Find out more about the consultation on the tax disputes process on our Policy Advice Division's website.

Consultation closes on 20 August.

 

 

Date published: 12 Jul 2010

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