Being contacted by Inland Revenue (IRD) can feel stressful, particularly if you are unsure why your tax affairs are being reviewed. For many individuals and businesses, an unexpected letter or call from IRD can raise concerns about audits, penalties, or compliance issues.
What to Do If Inland Revenue Contacts You in New Zealand is a common concern for individuals and businesses who are unsure how to respond to IRD enquiries, reviews, or compliance requests.
It is important to understand that an IRD enquiry does not automatically mean something is wrong. Inland Revenue regularly contacts taxpayers for routine clarification, compliance checks, or information matching reviews. Knowing what to do if Inland Revenue contacts you in New Zealand can help you respond calmly, avoid common mistakes, and manage the situation effectively.
What to Do If Inland Revenue Contacts You in New Zealand
Inland Revenue may contact individuals or businesses for a range of reasons. Some enquiries are minor and can be resolved quickly, while others may require more detailed information or follow-up.
- Requests for clarification on income or expense reporting
- GST reviews or reconciliations
- Information-matching discrepancies between reported data sources
- Property transaction reviews or bright-line considerations
- Outstanding tax payments or late filings
First Steps When You Receive an IRD Letter or Call
Read the Request Carefully
IRD correspondence usually outlines what information is required and why it is being requested. Take the time to read the letter or email carefully before responding. Avoid making assumptions about the nature of the enquiry.
Check the Response Deadline
Most IRD correspondence includes a response timeframe. Missing deadlines can escalate matters unnecessarily or lead to penalties. If you require additional time, it is often possible to request an extension.
Gather Accurate and Complete Records
Inland Revenue may request financial statements, bank records, GST workings, invoices, or contracts. Providing clear, accurate, and organised documentation can help resolve enquiries more efficiently and reduce the likelihood of further questions.
Common Mistakes to Avoid When Responding to IRD
Many problems arise not from the enquiry itself, but from how responses are handled. Common mistakes include providing incomplete information, making estimates instead of using actual records, or offering inconsistent explanations across different responses.
Ignoring correspondence or delaying responses due to uncertainty can also increase risk. If you are unsure how to respond, seeking guidance early can help prevent unnecessary escalation.
When an IRD Enquiry Becomes More Serious
In some cases, an IRD enquiry may progress into a formal review or audit. This is more likely where multiple tax years are involved, significant discrepancies are identified, or matters relate to GST, property, or complex transactions.
General information about IRD reviews and audits is available directly from Inland Revenue New Zealand, which outlines audit processes and taxpayer obligations.
Understanding Your Rights and Obligations
Taxpayers have rights during IRD enquiries, including the right to request clarification, reasonable response timeframes, and professional representation in complex matters. Understanding these rights can help make the process less intimidating and more manageable.
How IRD Guru Helps You Stay Informed
IRD Guru (https://irdguru.co.nz) is an educational platform designed to help New Zealand businesses and individuals better understand tax compliance, IRD processes, and audit-related risks.
Through practical guides and explanations on topics such as IRD audits, GST compliance, record-keeping obligations, and common compliance mistakes, IRD Guru helps taxpayers build awareness before issues escalate into formal reviews or audits.
When Professional IRD Support May Be Needed
While some IRD enquiries can be managed independently, professional support may be appropriate when matters involve complex tax treatment, multiple years under review, or potential penalties and interest.
In these situations, professional tax and IRD compliance services are available through DFK ORB360 – Tax & IRD Compliance Accountants in New Zealand , who assist clients with audits, compliance reviews, and structured responses.
Frequently Asked Questions
Does being contacted by IRD mean I am being audited?
No. Many IRD enquiries are routine requests for clarification and do not automatically result in a formal audit.
How quickly should I respond to Inland Revenue?
You should respond within the timeframe specified in the correspondence. If you need more time, extensions can often be requested.
What documents might IRD request?
IRD may request financial statements, GST records, bank statements, invoices, or contracts depending on the enquiry.
Location-Based FAQs
What should I do if Inland Revenue contacts me in Auckland?
If IRD contacts you in Auckland, review the request carefully, gather the relevant records, and respond within the specified timeframe. Some enquiries are routine, while others may require professional guidance.
Can Wellington businesses get help responding to IRD enquiries?
Yes. Businesses and individuals in Wellington can receive guidance on responding to IRD enquiries, including understanding information requests and preparing documentation.