A reader emails about my post on Sunday covering some shonky accounting at TUIA union.
Some comment on the TUIA tax write off. There are three possible ways TUIA got the write off they received.
- Staff incompetence on IRD’s part;
- misleading conduct by TUIA; or
- A combination of 1 and 2.
I am guessing a combination of 1 and 2 and I will explain why.
The Tax Administration Act sets out IRD’s duties and provides for the circumstances where a write off can occur.
The Inland Revenue Commissioner (and all his staff) has a duty to uphold the integrity of the tax system and a duty to collect the highest net revenue practical.
Its pretty simple when you consider both these duties – if you owe tax and you have the means to pay you need to pay. If you don’t have the means to pay you may get relief. If you undermine the integrity of the tax system (decide not to pay tax, engage in tax avoidance) you will still have to pay but the mercy may not be there if you can’t pay. In these circumstances rather than provide relief through a write off it may be considered more appropriate to bankrupt or liquidate and also consider some criminal sanctions. Read more »