Resolving the disputes that arise from tax related issues in New Zealand is a time consuming and expensive affair. Presently, these disputes are settled by litigation or outside the court by agreement between the Inland Revenue Department (IRD) and the taxpayer. A process called ADR or Alternative Dispute Resolution if adopted will be of great benefit. The taxpayers can benefit a lot from the introduction of this element into the pre-litigation dispute method. Ask your tax agent in NZ-he or she too will be of the same opinion.
The most prominent improvement would be to boost the conference phase by providing ADR. The conference takes place at the stage where parties have set out their positions but a legal action isn’t yet expected.
Although not legislated for but an essential administrative practice, the main aim of the conference is to recognize and elucidate the issues and facts in dispute. Conference could be easily supplemented by introducing a formal method and the usage of ADR technologies. On the whole, the aim would be to give conference stage much more substance by offering a great chance to settle the disputes without recourse to courts. There must be no obstacle to IRD participating in Alternative Dispute Resolution, it being empowered already for settling down the disputes in accordance with its management powers and existing care. Obviously HMRC is certain that ADR falls within parameters of its identical powers and responsibilities.
While ADR may fit naturally at conference phase, there is obviously no cause why it couldn’t occur before in the disputes procedure. It is however, illogical to pay no attention to the probable efficiencies, which ADR has the potential to bring. The confidential and non-binding character of ADR means, there is a minimal downside to either of the parties. If resolution can’t be attained, each party may conclude the procedure with a better understanding of other’s position. After ADR, the matters in question will surely be narrowed.
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