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Inland Revenue Department agrees to review decision to withhold information under Tax Administration Act

Taxation
Legislation:
Ombudsmen Act 1975
Related legislation:
Tax Administration Act 1994
Legislation display text:
Ombudsmen Act 1975; Tax Administration Act 1994
Agency:
Inland Revenue Department
Ombudsman:
Sir Brian Elwood
Case number(s):
W39522
Issue date:
Format:
HTML,
PDF,
Word
Language:
English

Inland Revenue withheld information requested by taxpayer relating to audit and prosecution and contained on taxpayer’s income tax review file and penal action file—the reason for withholding was pursuant to s 81(4)(I) of Tax Administration Act—the Department was encouraged to reconsider the discretion used in this case in light of Tax Disputes Resolution Procedures introduced subsequent to the decision having been made—IRD agreed and on review released most of the information, hence the investigation was closed as the complaint was resolved  

The taxpayer was audited by the Inland Revenue Department and subsequently prosecuted. After the completion of the case he requested, under the provisions of the Privacy Act and the Official Information Act, every document relating to the audit and the prosecution. The Department advised the taxpayer that his request had been considered under section 81(4)(l) of the Tax Administration Act 1994. Although the Commissioner had exercised his discretion to release some information, the majority had been withheld.  The taxpayer requested a review of this decision under the Ombudsmen Act, alleging that the decision to withhold was unreasonable.

In the course of the investigation, the Department was encouraged to review its decision in light of such legislative changes as the Tax Disputes Resolution Procedures, introduced on 1 October 1996 through the addition of Part IVA to the Tax Administration Act. These changes signalled legislative approval for the development of procedures to encourage ‘open and full communication’ in tax dispute cases.

The Ombudsman also considered whether policy guidelines with respect to the withholding of information had been applied reasonably in all the circumstances of the case. A great deal of information had been withheld simply because it had been categorised as ‘comment’ or ‘opinion’ by staff members. However, this information did not appear to go to the heart of departmental policy or strategy, nor did it relate to details of the Department’s auditing and prosecution procedures or thresholds.

On review, most of the information was released by the Department, including on-screen information, statements of fact and statements of opinion and comment by staff members relating to the statements of fact. On the basis of this release the complaint was resolved.

This case note is published under the authority of the Ombudsmen Rules 1989. It sets out an Ombudsman’s view on the facts of a particular case. It should not be taken as establishing any legal precedent that would bind an Ombudsman in future.

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