Inland Revenue admits sending tax notices to 'unknown number' of babies
Thursday, 16 May 2019
Inland Revenue has admitted sending out an unknown number of letters to babies telling them they might have tax bills to pay.
'That was a mistake and we are sorry for any confusion that has caused,' spokesman Rowan McArthur said.
'We are still determining how many letters may have been sent to children who don't qualify in any way as income earners.
'Rest assured that if they haven't received any income in the last financial year, they won't get an automatic tax assessment,' he said.
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Similar letters had been sent in error to superannuitants, addressing them also as 'salary and wage earners', he said.
'We are reminding this group that NZ Super is also considered income so they can still expect to receive an automated tax assessment,' McArthur said.
'In the communication they have received from us we referred to 'salary and wage earners like you'. On reflection we could have worded that better to avoid the uncertainty it has created for some people and we're sorry about the lack of clarity.'
One Wellington man was surprised his baby received a letter from Inland Revenue about her yearly tax.
David Cormack said he had received a letter addressed to his 9-month-old Greta, and said Inland Revenue had not acknowledged whether it was a mistake.
The notice addressed to the tot said: 'Over the next two months, we'll be processing income tax information for salary and wage earners like you.'
'We'll send you a notice to let you know how much income you've earned and how much tax you've paid over the past year. You'll see if you have a refund, a bill to pay or if you've paid the right amount of tax – so you know where you stand.'
Other parents have come forward saying their children had also received letters from Inland Revenue.
Commenting on Twitter, one said their six-month old had received a letter, and their 30-month old daughter had got one as well.
Another parent commented that now her young child was a wage earner, she hoped he would start paying for food, and yet another mum said her son was hoping for a refund so he could buy toys.
Inland Revenue has been undergoing what it has called the biggest tax change in a generation.
Inland Revenue is preparing to begin automatically issuing 1.7 million annual tax refunds and about 115,000 tax bills, as a result of changes brought about by the second stage of its $1.6 billion Business Transformation project.
There have been teething issues, with people reporting disappearing student loans, and some people seeing child support payments that they make added to their taxable income when they viewed their accounts on Inland Revenue's website.
But the department has said they were only 'display errors' that would not impact people's actual tax affairs, and McArthur said Inland Revenue had no 'high priority' fixes to make to the system since it went live after Easter.
'We are, of course, responding to customer feedback and making enhancements and adjustments to our new system on a daily basis. That's completely normal for a system transformation of this size and scale,' he said.
Responding to another complaint on social media, McArthur said tax letters could sometimes be sent to old addresses and to people who had died, but said that would not be 'specifically related to the new system changes'.
'We routinely receive notifications from Internal Affairs when a death has been registered but there have been times when that hasn't been enough to stop all communications and we apologise for the stress and upset that this has caused,' he said.
Job cuts have been part of the transformation, with deputy commissioner Greg James announcing in 2016 the department planned to cut about 1500 jobs – 25 to 30 per cent of its workforce – between the start of last year and 2021.
In November, Inland Revenue reported it was about halfway through the job cuts.