Tax experts hit out at IRD's aversion to email

09:35, Nov 21 2011

Tax practitioners are frustrated at the Inland Revenue Department's ongoing aversion to email, saying relying on the postal service is out of step with modern business practice.

The IRD was permitted to communicate electronically with taxpayers and had an internal policy on the issue, Wellington tax agent Jeff Owens said.

The problem was that the policy was not used uniformly across the department and it was up to the individual managers. Some units would email, some would not. ''Exactly how they apply that in particular also does not seem to be controlled by a central area,'' Owen said.

Continuing to communicate by post slowed proceedings down and could cause unnecessary distress.

In the case of one recent client, IRD did a partial assessment for $50,000. Before Owens had a chance to respond the taxman sent a demand by post directly to the client without informing him. ''Then my client's back on the phone saying, 'what's going on, I thought this was sorted'.''

Postal letters also generally had an electronic signature on them and the person named wouldn't necessarily know anything about the case, so they were hard to follow up.

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Aother bugbear was the IRD's reluctance to send spreadsheets electronically. This often forced agents to spend many hours scanning and entering data and calculations manually, Owens said.

New Zealand Institute of Chartered Accountants tax director Craig Macalister said the lack of email communication was an ongoing issue for practitioners. ''We are living a little bit behind the eight-ball in this area.''

The IRD had just reviewed its secrecy rules and made some legislative changes, so this would have been the idea opportunity to sort it out, he said.

He confirmed it varied from division to division. The assurance, or audit, section was flexible, whereas taxpayer services would not email.

Generally the investigations area was more comfortable about email because they would be having regular contact with a tax agent or taxpayer over a matter, he said.

Terry Baucher, tax working group spokesman for the Tax Agents Institute of New Zealand, said the situation was ''incredibly frustrating''.

Tax agents could sign an email waiver allowing them to communicate via a secure email link with IRD account managers, but this had to be done on a client-by-client basis and there were restrictions on what could be sent.

The department was hiding behind security and privacy issues. Other major organisations such as banks and large corporates seemed to be able to deal with these issues, he said.

''Where there's a will there's a way. We're not sure there's much of a will at the moment.''

Patrick Goggin, IRD's group manager assurance, said the department was required to maintain the confidentiality of taxpayer-specific information at all times.

It had an established framework for electronic communication with customers and this required formal consent.

''Inland Revenue only sends information electronically when there is an acceptable balance between the benefits of using e-channels and our responsibility to maintain confidentiality,'' he said.

Information was sent in PDF format to ensure its integrity and security. However a working document, for example an Excel spreadsheet, could be sent on a case-by-case basis.

Inland Revenue was able to communicate electronically with customers prior to recent legislative changes. Howeve these changes gave it greater discretion, Goggin said.

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