IRD apologises for blunder after letters sent to infants wanting to review 'their earnings'

Inland Revenue is apologising for another major botch-up tonight, this time affecting young children.

It comes a day after a woman was mistakenly overpaid $12 million. 

This latest blunder is raising questions about the IRD's new tax system.

At eight-months-old, Lachlan doesn't find much time to hold down a job. It's perhaps surprising then that his taxes are coming under the microscope.

Lachlan's father, Rowan, joked to Newshub: "He's going to get his wages reviewed over the next little while, and then IRD is going to tell us how much he has earned and what tax breaks he's entitled to and all that sort of stuff."

Lachlan can't read the letter yet (he prefers the taste). The IRD's written to Lachlan: "We'll be processing income tax information for salary and wage earners like you."

Dad Rowan suspects someone screwed up and pressed the wrong button.

"Either that, or he has been working somewhere where we haven't been... which is interesting because he's around us 24/7 at the moment."

Lachlan's not alone. A number of parents have contacted us saying their infants have been sent the same letter.

The IRD told Newshub many children are technically income earners for tax purposes, like those whose parents have set up KiwiSaver accounts or investment funds for them. However, IRD admits this shouldn't have happened.

"We shouldn't have sent any letters to children who are not income earners, technically or otherwise. That was a mistake and we're sorry for any confusion that has caused."

The botch-up comes as the IRD is trying to simplify the tax system.

So far it has been anything but simple - just yesterday Newshub revealed an Auckland woman had been overpaid $12 million.

It's also apologising for sending a similar letter to pensioners, calling them "salary and wage earners".

Lachlan's Dad feels sorry for whoever made the mistake.

"We all make mistakes in our jobs... this one just happens to be on a massive scale."

As for Lachlan - well - he's just happy to have a new chew toy.