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Inland Revenue Department Audits
This guide gives a general overview of what is involved in an IRD audit.
The Tax Administration Act 1994 provides the Inland Revenue Department with significant powers to audit companies, businesses and individuals in order to protect the integrity of the taxation system in New Zealand. Tax investigators from the Inland Revenue are able to:
Access property including books and documents; and
Require reasonable assistance with matters relating to tax audits; and
Require any person to supply written information and produce for
inspection any books and documentation considered pertinent to a tax
Remove and retain any books and documentation pertinent to a tax
If records or documents are covered by legal privilege, because they contain communications obtained for the purpose of legal advice, between an organisation or individual and a solicitor, they may be withheld. The Department is bound by law to keep the information it acquires from and about organisations and individuals confidential. The information privacy principles of the Privacy Act 1993 apply in respect of individuals, and, the Official Information Act 1982 applies to audits in respect of organisations.
The Department audits for a variety of reasons and has a number of
different audits that reflect those reasons. Audits can be precipitated by a variety of events, but may be random; either way the Department is not obliged to advise why it audits an organisation or individual, when, or how, it does this.
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