Question :
How can I get properly unbiased advice about options in dealing with aggressive IRD action over alleged personal debts that cannot now ever be paid as a result of covid19.  Accountants cannot help.  Tax lawyers want you to pay them to negotiate on your behalf. Insolvency ‘experts’ want you to pay them to help you into bankruptcy.

Question submitted 14/05/20 @ 10:33am
Industry: Funding & Finance
  • @axlespring, sorry to hear of your situation.
    For many COVID-19 was the straw that broke the camel’s back.
    I’m not sure where you would go for help…but I’m thinking there must be a govt agency or even a hardship division of IRD that can help.
    My recommendation, for what it is worth, is to keep talking with IRD (disengaging won’t help you), to document everything and to avoid using words like ‘cannot/will not be paid’.
    COVID-19 doesn’t absolve people or companies of their commitments…creditors (including IRD) should understand it and be open to negotiating reasonable deferred payment plans but they don’t have to so you are better off trying to find a way to pay what you owe over a longer term than the alternative.
    Sorry, no silver bullet here, just some encouragement to find a way and to keep this in perspective as this is just a bill, what is most important is health, family and friends.
    Best of luck!

    Hi @axelspring that sounds incredibly tough.

    I agree with @Brendan-francis that continuing to communicate with IRD is the best course of action (and the same course of action that I’d recommend with any creditor) and negotiating a payment arrangement with them that makes it manageable for you, and acceptable to them.

    The options around tax payment deferrals are a moving feast https://www.ird.govt.nz/Updates/News-Folder/covid19-business-changes and https://www.ird.govt.nz/covid-19/manage-my-tax so it’s also worth keeping an eye on those pages to see whether additional announcements provide other options.

    I also think staying engaged would help. Finding someone to support you to have those conversations maybe a starting point.

    That’s a tough one! Your accountant / tax agent should be able to help and is usually first port of call for this type of issue, and they should be an advocate for you (hopefully they aren’t biased!) When you say “alleged” do you mean you don’t agree with the assessments that the IRD have made? Are they default assessments because a return wasn’t filed? If that’s the case filing the outstanding returns would be good starting place. If you are unsure, then log on to the IRD website and check the details of the assessments. I think there is an increased willingness from IRD to accept compromised arrangements that they might not have done prior to COVID-19, but that doesn’t mean they will agree to everything either. It’s hard to provide general advice on this topic, because it will depend entirely on the full circumstances (type of debt – whether it’s predominantly core tax or interest and penalties, how the debt arose, why it wasn’t paid at the time, your full financial circumstances). One pathway you could consider is to file an IR590 disclosing your full financial position to the IRD, from there they will make an assessment about recoverability of the debts. I can’t advise doing that without full knowledge of the circumstances though, it is an option you could discuss with your accountant. If it’s predominantly tax debts that you are facing, you may be able to avoid bankruptcy.


    I’m co-founder of Debtfix.co.nz – we are a social enterprise that specialises in resolving debt issues for individuals and all of our advice is free – contact our team at helpline@debtfix.co.nz or call us on 0800 DEBT 101

    Best wishes


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