Published: June 2026 | Last Updated: June 2026
How to Respond to an IRD Notice of Proposed Adjustment (NOPA) in New Zealand
IRD Notice of Proposed Adjustment documents can be intimidating when they arrive from Inland Revenue. However, receiving a NOPA does not automatically mean Inland Revenue’s position is final. Understanding what a NOPA is, why it was issued, and how to respond correctly can significantly improve your ability to protect your interests during the disputes process.
Whether you are a sole trader, contractor, property investor, or business owner, taking prompt action after receiving a Notice of Proposed Adjustment is critical.
Quick Answer: How Should You Respond to an IRD Notice of Proposed Adjustment?
If you receive an IRD Notice of Proposed Adjustment (NOPA), you should:
- Read the NOPA carefully.
- Understand Inland Revenue’s concerns.
- Gather supporting documentation.
- Review the relevant deadlines.
- Seek professional advice if necessary.
- Prepare a structured response supported by evidence.
Ignoring a NOPA or missing important deadlines may reduce your ability to challenge Inland Revenue’s position.
What Is an IRD Notice of Proposed Adjustment?
A Notice of Proposed Adjustment (NOPA) is a formal document used within New Zealand’s tax disputes process.
Either Inland Revenue or the taxpayer can issue a NOPA to propose a change to a tax assessment, return, or tax position.
The purpose of the NOPA is to clearly identify:
- The adjustment being proposed.
- The reasons for the adjustment.
- The facts relied upon.
- The legal basis supporting the position.
Official Inland Revenue Guidance:
How the Taxpayer-Initiated Disputes Process Works
Why Inland Revenue Issues a NOPA
Inland Revenue may issue a NOPA when it believes a taxpayer’s tax position requires adjustment.
Common reasons include:
- Underreported income.
- Incorrect GST claims.
- Disallowed deductions.
- Business expense disputes.
- Property tax issues.
- Audit findings.
- Compliance review outcomes.
Receiving a NOPA does not automatically mean additional tax is payable. It represents an opportunity for both parties to discuss and review the proposed adjustment.
Most Common Reasons Taxpayers Receive a NOPA
GST Adjustments
GST disputes often arise when Inland Revenue believes GST has been claimed incorrectly or supporting records are insufficient.
Business Expense Claims
Disputes commonly involve:
- Motor vehicle expenses
- Home office claims
- Travel expenses
- Entertainment expenses
- Mixed-use assets
Income Reporting Issues
Income discrepancies may be identified through information matching, audits, or reviews.
Audit Reviews
Many NOPAs are issued following an Inland Revenue audit or investigation.
Related Resource:
Received an IRD Audit Letter? What Should You Do Next?
Tax return errors can also trigger Inland Revenue reviews. Learn more in our guide to:
9 Hidden Reasons DIY IRD Filing Goes Wrong
Step 1: Read the NOPA Carefully
The first step is understanding exactly what Inland Revenue is proposing.
Review:
- The proposed adjustment.
- The tax periods involved.
- The facts relied upon.
- The legal reasoning.
- The calculations supporting the adjustment.
Many taxpayers focus only on the tax amount involved and overlook important details that may affect the dispute.
Step 2: Gather Supporting Documentation
Documentation often determines the strength of a taxpayer’s position.
Relevant records may include:
- Tax returns.
- Invoices.
- Receipts.
- Bank statements.
- Contracts.
- GST records.
- Accounting reports.
If some returns remain outstanding, address those issues as early as possible.
What Happens If You Have Unfiled Tax Returns in New Zealand?
Step 3: Understand Your Response Timeframe
One of the biggest mistakes taxpayers make after receiving an IRD Notice of Proposed Adjustment is delaying their response.
New Zealand’s tax disputes process includes strict deadlines. Missing these deadlines can significantly impact your ability to challenge Inland Revenue’s proposed adjustment.
Official Resource:
Official Inland Revenue Disputes Process
Taxpayers should review all correspondence carefully and take action as soon as possible.
Step 4: Seek Professional Advice Before Responding
A NOPA is a formal legal and tax document. While some matters may be straightforward, more complex cases often benefit from professional review.
Professional advice may help:
- Review Inland Revenue’s position.
- Identify factual inaccuracies.
- Assess supporting evidence.
- Prepare technical tax arguments.
- Improve communication with Inland Revenue.
- Reduce dispute risks.
Taxpayers dealing with GST disputes, audits, property tax issues, business deductions, or multiple years of assessments may particularly benefit from specialist support.
Professional Accounting Resource:
Accounting & Reporting Services New Zealand
Step 5: Prepare a Structured Response
If you disagree with Inland Revenue’s position, your response should focus on evidence rather than emotion.
A strong response generally includes:
Facts
Clearly explain the circumstances and relevant events.
Evidence
Provide documentation supporting your position.
Technical Analysis
Where appropriate, explain why you believe the proposed adjustment is incorrect.
Clarity
Present information in a logical and professional manner.
The goal is to help Inland Revenue fully understand your position and supporting evidence.
Common Mistakes to Avoid When Responding to a NOPA
Ignoring the Notice
Ignoring a Notice of Proposed Adjustment can limit your available options and may allow the proposed adjustment to proceed.
Missing Important Deadlines
Failing to respond on time can negatively affect your ability to challenge Inland Revenue’s position.
Submitting Incomplete Information
Partial documentation often creates additional questions and may weaken your case.
Responding Emotionally
Disputes are most effectively resolved through evidence, facts, and technical analysis.
Failing to Seek Advice
Complex tax disputes may involve technical issues that require professional review.
Related Resource:
Top 5 IRD Dispute Support Services for Sole Traders
What Happens After You Respond to Inland Revenue?
After reviewing your response, Inland Revenue may:
- Accept your position.
- Modify the proposed adjustment.
- Request additional information.
- Continue through the formal disputes process.
Where disputes remain unresolved, additional review stages may become available.
Official Information:
When Should You Speak With a Tax Professional?
While some Notice of Proposed Adjustment matters can be resolved through direct communication with Inland Revenue, more complex disputes often require professional review.
Taxpayers may benefit from professional assistance when a NOPA involves:
- Large tax adjustments.
- GST disputes.
- Property investment income.
- Business expenses and deductions.
- Tax audits and investigations.
- Multiple years of tax returns.
- Significant penalties and interest.
For accounting, tax advisory, and business compliance support, visit:
Need Help Understanding an IRD Notice of Proposed Adjustment?
IRD Guru helps taxpayers understand Inland Revenue correspondence, tax disputes, audits, GST issues, and compliance obligations.
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If you’ve received a Notice of Proposed Adjustment, obtaining guidance early may help you understand your options and respond more effectively.
Frequently Asked Questions About IRD NOPAs
What Is a NOPA?
A Notice of Proposed Adjustment (NOPA) is a formal document used to propose a change to a tax assessment or tax position.
Does Receiving a NOPA Mean I Owe Tax?
No. A NOPA proposes an adjustment and provides an opportunity for the position to be reviewed.
Can I Challenge a NOPA?
Yes. Taxpayers may challenge proposed adjustments through New Zealand’s formal disputes process.
Should I Ignore a NOPA?
No. Ignoring a NOPA may reduce your ability to dispute Inland Revenue’s position.
Do I Need Professional Help?
While not mandatory, professional advice may help taxpayers understand their rights, obligations, and available dispute options.
Final Thoughts: Taking the Right Action After Receiving a NOPA
An IRD Notice of Proposed Adjustment is an important document that should never be ignored. While receiving a NOPA can feel overwhelming, it is designed to provide taxpayers with an opportunity to understand and respond to Inland Revenue’s proposed position.
By reviewing the notice carefully, gathering supporting evidence, understanding deadlines, and seeking professional guidance where appropriate, taxpayers can place themselves in a stronger position during the disputes process.
The sooner you act, the more options you are likely to have when resolving a dispute with Inland Revenue.
At IRD Guru, we regularly assist New Zealand taxpayers who are unsure what options may be available when they have outstanding tax debt or are struggling to meet IRD obligations. Through our experience helping individuals, sole traders, contractors, and businesses navigate Inland Revenue matters, we understand the challenges taxpayers face when dealing with payment difficulties, penalties, audits, and compliance concerns.