IRB apologises to ‘deceased’ taxpayer

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KUALA LUMPUR: The Inland Revenue Board (IRB) today issued an apology after an IRB letter to demand arrears from a taxpayer who was listed as deceased went viral on social media.

The IRB, in a media statement today, admitted the error in the data form and its negligence in determining the status of the taxpayer.

“On further investigations, the IRB found the taxpayer is still alive and would like to apologise to the taxpayer for the mistake,” the statement said.

The agency also clarified that a letter of apology would be sent to the taxpayer and appropriate actions would be taken to prevent such an oversight from occurring again.

An auxiliary policeman, Amran Mohamed, 45, was shocked after receiving the letter from the agency which sought his next of kin to settle an arrears of RM1,728.50 apart from stating his status as deceased.

According to the IRB, it was currently assessing remaining taxpayers on whether they still had arrears as stated in the letter or otherwise, and this would be updated according to the status of the taxpayer after detailed assessments had been made.

The statement also clarified that under Section 74 and Section 106 of the Income Tax Act 1967, the agency had the authority to demand outstanding tax from the legitimate beneficiary of any deceased individual.

“If the beneficiary is unable to pay the arrears in one lump sum, the IRB will advise the beneficiary to visit the IRB office (to settle) the payment by instalments,” the statement said.

The statement also clarified that the income of a deceased individual earned until the day of his death would still be subjected to tax even though it would be made in the name of a legitimate representative.

“For example, in 2015, ‘A’ passes away on 1.6.2015. As such the income earned from 1.1.2015 to 31.5.2015 will be assessed as tax on the income of ‘A’ for 2015 and the assessment will be made in the name of the representative or beneficiary of A,” the statement said.

According to the statement, any income earned after the death date would not be considered as income of the deceased. Instead it would be considered as individual inheritance income and be assessed in the name of the beneficiary or administrator.

The tax on the beneficiary or administrator would be the same as the rate for an individual.

If the deceased has credit, the IRB said the beneficiary could claim repayment or extra credit by producing documents such as the death certificate, Grant of probate and Borang Am 80 if the taxpayer did not have assets.

The beneficiary will also be responsible for clearing any outstanding arrears owed by the deceased from the previous year.

However if the beneficiary could not settle the outstanding tax, the IRB could arrange for discretionary payment.