Accountant types... Student loan advice?

[Brett]

Hey all, I will run this past my accountant (when I find one...) but thought I would get some opionions from here...

So I get a letter out of the blue from IRD on Friday telling me I owe them back payments of $1700 for some income I made in 2005 that didn't have SL deduction taken out. I was a freshie back then, and had not used the right code and hence had got a letter telling me that I was using the wrong code and please to update to allow for deductions, which I did and hence from that day on I have been making payments. (Had been prior to that as well, not too sure what changed that for that window period I was categorised as M and not MSL...)

So anyway, the years go by and I am here assuming that my SL payments are being made as required, I recieve regular account statements showing me my outstanding balance and payments etc made including interest credited etc and not once am I informed that I have an oustanding balance to be paid.

Thus out of the blue just over 4 years later I get a letter telling me that I owe them this unpaid sum from 2005 and another $1600 of penalties.

Now I have no issue paying the sum from 2005 that should have been paid, now that I am aware it even existed (hell, my SL balance is only $1800 now...) but can they charge me the penalties since I have not ONCE had them noted on a letter or statement right up untill my latest statement a few months ago?

I have only once recieved a letter saying that I had underpaid for the year by $1500 (for 2007 I think) and I immediately sent them in a cheque...that was a year and ago back but I have never heard of the sum from 2005.

Verdict? Am I about to be shafted by the Inland Revenue Gestapo?

[kunoichi]

When i passed the earning threshold of income they first contacted me then my employer. My employer actually ended up changing the code. As far as i'm concerned, if the IRD is doing your tax (i.e. ur an employee) then it is their responsibility to advise u to be in the correct tax code (as a regular accountant would do). So i would definatly hit it up with your accountant before forking out the cash. Sounds a bit suspicious to me.

[Mully]

Did you do one of those "Find out if you're owed a refund" things lately??

FOCUS: I'd ask them to waive the penalties if you have had no notice. My last job underpaid the tax on my final pay when I left - ended up getting a letter from IRD. Their (IRD) view is that it's your problem to ensure you're on the correct tax code.

[scracha]

Verdict? Am I about to be shafted by the Inland Revenue Gestapo?

Just leave the country and come back when they have a student loan amnesty.

[CookMySock]

They dont call them the Inland Revenge for nothing.

Steve

[marty]

I had a similar problem. I just called IRD, escalated to the next manager until I got the answer I was looking for, then started an AP to pay it off. This was for 18 months of wrong tax code, so was for a fair bit. I suffered constant invoices for overdue amounts until I had paid the whole lot off, but in the end they didn't charge interest or penalties for any of the outstanding amount.

[avgas]

Yep its your responsibility to do 2 things.
- Provide the correct ird number
- Provide the correct tax code

It is also by default your responsiblity to check your employer pays the correct ammount.

It is your employers resposibilty to pay the correct ammount, but it is your responsibilty to ensure that the correct ammount is paid. Clear as mud.

Key words here are the past-tense ones. If you have changed employers - it is your responsiblity to ensure everything was paid in full. If it was not - you must take your previous employer to court (not IRD).

As for the fees - complain to IRD, say you want to pay the SL, but think its bullshit that you have not received earlier letter from them. If that doesn't help an accountant can argue the whole financial year thing.

[phoenixgtr]

You will be able to negotiate with the IRD and if you are lucky they will drop the penalties. It was an obvious error as you had been on the right tax code before and after. They will also have on record all the reminders they have sent you and if it's only one then it should be ok. Believe it or not the IRD can be quite reasonable some times.

Just give them a call or go and see them. You will have to pay the core repayments due in 05 though.

[Mully]

Key words here are the past-tense ones. If you have changed employers - it is your responsiblity to ensure everything was paid in full. If it was not - you must take your previous employer to court (not IRD).

Indeed. Unless your employer deducted the amount and simply didn't pay it, in which case, IRD will kill them (Miss Mully had this happen).

In my situation, the incorrect amount was deducted before I got the money. IRD's opinion was that since I had benefited (i.e. got more money than I should have), then I should pay it back and they wouldn't take any action against my ex employer for cocking it up. Informal legal advice I got was that if I took my ex employer to court (even Disputes Tribunal) I would loose because I had received the money.

LESSON FOR THOSE PLAYING AT HOME: If you change jobs, make sure your employer pays your holiday pay at the correct rate (mine calculated it like it was salary, $X at X%, next $Y at Y%, instead of a bulk payment which should have been at the top tax rate).

I did one of those "Free refund" thingys and got $400-ish back. IRD then reviewed my account and pinged me $700-ish. They almost admitted on the phone that the activity on my account triggered them to review it.

IMO, do your own refund check on-line. If the debt exceeds the refund, walk away, cos IRD will come looking for the money. (Those stalls in shopping malls say they only process refunds, but IRD pick up the rest)

[Brian d marge]

Just leave the country and come back when they have a student loan amnesty.

Who would do a thing like that !

Stephen

grass IS Greener !

[BiK3RChiK]

You will be able to negotiate with the IRD and if you are lucky they will drop the penalties. It was an obvious error as you had been on the right tax code before and after. They will also have on record all the reminders they have sent you and if it's only one then it should be ok. Believe it or not the IRD can be quite reasonable some times.

Just give them a call or go and see them. You will have to pay the core repayments due in 05 though.

This is generally how the IRD operate these days. One other suggestion, put it all in writing. If you ring them, they will require you to write in anyway....

[scracha]

This is generally how the IRD operate these days. One other suggestion, put it all in writing. If you ring them, they will require you to write in anyway....

Umm...is ACC much the same? You know...if they've kinda erm...not noticed you for 3 or 4 years. Can they backdate it and can they add interest/penalties?