Glossary of Terms

Aggressive Tax Issues – the description given to schemes or arrangements entered into where the investors receive more tax losses than the amount of money they have invested. These tax savings occur regardless of the success of the scheme or arrangement. The schemes or arrangements cover a range of projects, from films to forestry and the commercialisation of “concepts”.

Audit Portfolio Holder – This role is currently held by a service centre manager who has responsibility for the delivery of agreed national audit outputs, promoting best practice and providing cohesion, consistency, and a co-ordinated approach to reporting on taxpayer audit performance across the service centres. Taxpayer audit staff are accountable to their service centre manager, not to the Audit Portfolio Holder.

Branch Offices – under the control of a service centre, these are small offices that provide similar services to the service centres. There are 12 branch offices and all have some audit staff.

Central Agencies – the organisations that work across the whole of central government (e.g. the Treasury and the State Services Commission).

Compliance Risk Analysts (CRAs) – formerly called Compliance Risk Officers, CRAs were introduced in 1999 to collect and collate information to improve the targeting of case selection for audits.

Corporates Division – the Corporates Division concentrates on large corporate taxpayers with an annual turnover of more than $100 million and other specific groups such as Government agencies.

Data Warehouse – the IRD’s main analytical database that contains a wide range of information about taxpayers and the tax they pay. The database has been progressively developed as part of an ongoing project.

Design and Monitoring Group – a group based in the IRD’s National Office responsible for devising new initiatives for a range of functions, including taxpayer audit.

Discrepancy – the difference between the tax ascertained as a result of audit activity and the tax on income previously returned by the taxpayer.

Investigators – the IRD’s term for staff undertaking taxpayer audits.

Quality Measurement System (QMS) – used to measure and report on the quality of the audits conducted by investigators.

Service Centre – an office in which the staff provide a range of services to taxpayers – including audit, debt collection, and customer services. The five service centres are located in Takapuna, Manukau, Hamilton, Wellington and Christchurch.

TACTICS – the computerised Taxpayer Audit Case Selection, Management and Reporting System.

Taxpayer Audit – the audit of taxpayers’ reporting of income and other amounts liable for tax. Audits are conducted to detect non-compliance with tax laws and to deter potential non-compliance.

Taxpayer Compliance Model – provides a framework for how the IRD can interact with taxpayers to best meet their specific needs.

Tax Practitioner – someone involved in dealing with tax matters, such as an accountant, lawyer, or tax agent.

Technical and Legal Support Group (TLSG) – a group based in the service centres that provides specialist taxation advice to staff, including investigators.

The Way Forward 2001 Onwards – the IRD’s strategic business plan that includes the Taxpayer Compliance Model.

Time Bar – the end of the time within which the Commissioner of Inland Revenue can amend a taxpayer’s return. The general rule for income tax returns is that the Commissioner can only amend the return within four years after the end of the year in which the return was filed. There are exceptions – for example, when the return is fraudulent or wilfully misleading, or where the taxpayer has agreed to extend the time bar (sections 107 and 108, Tax Administration Act 1994).