Faced
with bankruptcy at the hands of Inland Revenue, Rotorua car dealer Ronald
Maxwell Wilson was given a second chance with the High Court approving payment
by instalments over five years of some $150,000 in tax arrears and penalties.
Mr Wilson argued Inland Revenue was being
punitive, seeking to bankrupt him on a $17,693 GST debt dating back to
2003. This GST debt had blown out to
$137,303 with interest added for late payment. Little had been done in the
interim to enforce the debt, he claimed.
He was willing to pay the debt in full if given time. Inland Revenue was chasing Mr Wilson for tax
payable by his trust: Il Mondo Trust. The
Trust has no assets. As trustee, Mr
Wilson is personally liable for the Trust’s tax obligations.
Inland Revenue said the situation was
more complicated than Mr Wilson indicated.
It said he had failed to respond fully to requests for further
information and had failed to file Trust tax returns on time. Beyond the Trust’s tax affairs, Mr Wilson
still owed as at March 2016 $46,500 in unpaid personal income tax and $5600 for
unpaid child support, Inland Revenue said.
It doubted whether he had sufficient resources to support any promised
instalment plan. Bankruptcy sends a
clear message to taxpayers about the need to meet their tax obligations.
Associate judge Christiansen said the
offer to make full payment by instalments was generous, given that most
applications offer only part-payment in full satisfaction. He approved an instalment plan wiping all tax
debts if Mr Wilson paid $150,000 over five years starting with an upfront
payment of $38,000. The repayment plan
can be cancelled and bankruptcy proceedings resumed if even one of the promised
instalment payments is not met, he warned.
Wilson v. Inland Revenue – High Court
(22.04.16)
16.063