Last chance for 'Penny and Hooper' taxpayers
The taxman is urging businesses with "Penny and Hooper-like disclosures" to do so in the next fortnight, or risk penalties.
Penny and Hooper, two Christchurch orthopaedic surgeons, were found to have reduced their income tax obligations through an income diversion arrangement.
At the end of February, more than 271 taxpayers in positions that were broadly equivalent to Penny's and Hooper's had made voluntary disclosures resulting in nearly $7 million being collected.
IRD said taxpayers had until the end of this month to take advantage of its concession to make a voluntary disclosure.
IRD tax counsel Graham Tubb said the concession was granted after the Supreme Court's decision in the Penny and Hooper case in 2011 and was available for those who made voluntary disclosures.
"There is still time for people who are in a similar situation to Penny and Hooper and have used a similar company or trust structure to artificially lower their incomes to discuss their arrangements with Inland Revenue," Tubb said.
Those who make a voluntary disclosure before March 31 would be required to make adjustments for only the last two income years before November 24, which was when the concession was offered.
Those who did not come forward might incur not only penalties, but IRD might also reassess their tax position over four years.
IRD issued a Revenue Alert to outline the circumstances in which income diversion could be considered tax avoidance after the Supreme Court's decision.
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