Assumed dead taxpayer is alive

PETALING JAYA: A 45-year-old auxiliary policeman in Dungun, Terengganu, who was assumed to be dead by the Inland Revenue Board (LHDN) is very much alive.

LHDN had recently sent a letter to his wife a letter stating that he is dead. She was asked to settle RM1,728.50 in unpaid tax payments.

The letter, according to Amran Mohamed, was delivered to his wife Zakiah@Normah Sulong, 43, at their residence Taman Murni Perdana, Paka, on Thursday.

“The letter was signed by Terengganu LHDN tax collections officer on July 25. I am as shocked as anybody else to receive such a letter as I am pretty much alive and well,” Amran was quoted by Berita Harian as saying at his home on Friday.

Amran works as an auxiliary policeman with Petronas. He said he had never skipped his income tax payments as his salary is deducted monthly.

He asked how LHDN could make such an error when all letter details were correct. “I just hope this does not happen to me again or anyone else for that matter,” he added.

Meanwhile, LHDN has apologised over the letter. It admitted the error in the data form and its negligence in determining the status of the taxpayer.

“On further investigations, 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 oversight from happening again.

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

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

“If the beneficiary is unable to pay the arrears in one lump sum, LHDN will advise the beneficiary to visit IRB office on payment by instalment,” 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 passed 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 and would instead be considered as individual inheritance income and would 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, LHDN 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 to clear any outstanding arrears owed by the deceased from the previous year.

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