When the IRD Wants More Info!
This year (2016) we've seen a dramatic increase in requests for information from IRD, generally, letters where they want a more detailed breakdown of expenses. We've also seen some more "direct" methods employed. What is this all about?
Focus On Property
This year, as in previous years, IRD is continuing to focus on property. Why? Well, see articles like this at NZ Herald:
The Herald reports: "Inland Revenue's 52-strong property compliance team has generated an extra quarter of a billion dollars that landlords and property flippers avoided paying in the past five years. The team is spread around the country, with a strong focus on the hotspot of Auckland, and is charged with finding people who have not paid the required tax on rental income or property speculation."
So, the government has given IRD more money to find property owners who aren't paying the tax that they should. The results have been quite spectacular, and so the IRD has been given even more money to follow up. You can see how effective the program has been from looking at the Herald graphic. Really, this is good news for everyone as tax cheats hurt us all.
However, this also means that law-abiding people sometimes are caught up in this effort, and asked to provide extra info. And as mentioned, we have certainly seen an upswing of queries from IRD.
The "Direct Method"
IRD have starting calling people directly, instead of via their accountant/tax agent. Frankly, this can be intimidating. However, please feel free to refer them to your accountant (it is your right to do so).
Is there anything you can do to minimise risk? Well, apart from being honest, you may want to take a look at AuditShield insurance. Contact us for a quote. You may also be interested in reading WHAT DOES AN IRD "REQUEST FOR MORE INFORMATION" LETTER LOOK LIKE?
NB: This article does not imply any endorsement by NZ Herald or its writers. All rights belong to NZ Herald.
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