Requesting discretion to use tax pooling

Discretion to use tax pooling is typically sought in cases where a voluntary disclosure has been made by a taxpayer, but no previous return for the tax type has been filed.

To read more on IR's criteria, please see HERE.

⚠️ Important: IR reserves the right to refuse the use of tax pooling

The taxpayer must meet Inland Revenue’s criteria in order to be eligible, and IR judges eligibility on a case-by-case basis.

The template below is provided as a suggestion only and should be submitted at the judgment of the taxpayer's agent.

Template message

Subject: Request for discretion to use tax pooling – [taxpayer name], [IRD number]
To: Inland Revenue – Tax Pooling Team
From: [Your name], [Your firm or role]
Date: [Insert date]

Kia ora,

I am writing to formally request that the Commissioner exercise discretion under RP 17B (12), (13) and (14) of the Income Tax Act 2007 to allow the use of tax pooling for the following taxpayer:

• Taxpayer name: [Insert name]

• IRD number: [Insert number]

• Tax type: [Insert tax type]

• Tax period: [Insert period]

• Amount of tax: [Insert amount]

This request relates to a situation where the taxpayer has incurred additional tax as a result of a voluntary disclosure. Approval is sought to use tax pooling outside the standard 75‑day window to satisfy this liability. 

In support of this request, I confirm that the requirements set out in RP 17B (12), (13) and (14) are met:

• The taxpayer has been taking reasonable care to comply with their tax obligations [include a brief explanation] 

• The voluntary disclosure relates to a new tax liability that did not arise from a return filed by the taxpayer, and was not the result of an assessment previously made by Inland Revenue [include a brief explanation]

• The voluntary disclosure is made within a reasonable time after the taxypayer becomes aware of the new liability, and before IR has contacted them [include a brief explanation]

• The taxpayer has notified the Commissioner of the details of the new liability and the notification has resulted in an assessment of the new liability or in an obligation to pay the new liability [include a brief explanation]

In light of the above, I respectfully request that the Commissioner exercise their discretion under RP 17B to allow the use of tax pooling to meet this tax obligation.

Supporting documentation is attached for your review. Please let me know if any further information is required.

Ngā mihi,
[Your full name]
[Your position / firm name]
[Your contact information]

Tips for submission

• Commissioner's discretion should be sought at the same you make the voluntary disclosure to IR. 
• Include a summary of the taxpayer’s compliance history.
• Be clear and concise in your justification.
• Submit the request promptly -- IR allows 60 days from the notice of assessment date to use tax pooling.

Helpful articles

• Tax Information Bulletin (Vol. 34, No. 5, pg. 33-35): Outlines the criteria for Commissioner’s discretion to use tax pooling in situations where an original return was not filed. It provides some examples of what ‘reasonable care’ might look like and states it “involves establishing what a reasonable person would do in the same circumstances and takes into account such factors as the age, health, and background of the taxpayer in question”.

• INS00035 (Shortfall Penalty for Not Taking Reasonable Care): The ‘reasonable care’ test for the purposes of Commissioner’s discretion is linked to the criteria that IR uses to determines if shortfall penalties apply.