New IRD System Might Be Faulty

When it comes to anything where money is involved, it is always best to have legal protection. For instance, there is now the so-called chartered accountant insurance for professionals to be protected in case troubles come knocking. Now there is a new issue rising from the recently introduced IRD system which was worth $1.6 billion.

According to an accountant, her parents have fallen victim to the new system’s faulty operation after they were told that they have an outstanding debt of over $10,000. The amount is a combination of taxes, fines and penalties that were determined by the Inland Revenue. The accountant daughter was the one who assisted the couple who are already in their 70s. She utilized the latest computer system of the department in order to comply with the IR3 tax returns of her parents.

Melanie Gabriel was an accountant based in Auckland and she revealed that her parents have paid more than they should with regards to provisional tax therefore they should be able to apply for a refund. The problem is the newly introduced income tax system used by Inland Revenue missed the provisional tax that was already paid and therefore it was not included in the calculation.

Gabriel said that the system was the one responsible for processing the return but there is an error with the calculation and it did not take into consideration the payment for the provisional tax. The error was the same on the two accounts that were reviewed.

She then assisted her parents to create an online letter to be sent to the Inland Revenue so that the mistake can be corrected right away. The only response they got was quite vague which said that the processing of the return did not push through. After the first response, the agency sent another letter advising the couple to pay the amount they owe together with the penalties and fines.

The spokesman of the agency said that they are already looking into the case. This incident taught Gabriel about getting chartered accountant insurance because she’ll never know when this kind of misunderstanding will happen with her practice.