smart-tax-solutions-limited

From Risks to Results: How we resolved an IRD audit review

Sun, 22 Feb 2026 09:21:15 GMT

From Risks to Results

How we resolved an IRD audit review

An Inland Revenue audit can be one of the most stressful experiences a business faces. Tight deadlines, complex financial histories, and the risk of significant tax exposure can quickly overwhelm even experienced directors.

That was exactly the situation a group of companies found themselves in when they approached us for help.

For more than three years, they had been engaged in an ongoing review with the IRD. During that period, they had worked with three different accounting firms, yet the matter remained unresolved. What began as an IRD risk review had escalated into a full audit, with an estimated tax liability of $5.2 million. To add to the pressure, they had just two weeks left to respond to the IRD’s latest assessment.

The Challenge

Stepping into a long-running audit means untangling years of financial data, prior advice, and historic decisions. With limited time and high financial risk, the stakes were significant.

Our immediate priority was time. We contacted the IRD to request an extension, but were told several had already been granted and none would be considered. Through careful negotiation and a clear plan of action, we successfully secured a six-week extension - giving us the critical breathing room needed to conduct a thorough review.

Our Advice

Once we examined the accounts, the core issue surfaced quickly. Income tax returns prepared by the IRD was significantly overstated, because internal transfers between the accounts were recorded as income by the IRD.

Our team reprocessed seven years of financial statements to ensure accuracy and consistency. We prepared a voluntary disclosure outlining the discrepancies and corrections, demonstrating transparency and good faith. Throughout the process, we kept the directors informed at every stage, ensuring they understood both the risks and the strategy.

The Outcome

The results were significant. The original $5.2 million estimated liability was reduced to $1.2 million. We also negotiated to prevent prosecution and secured substantial reductions in shortfall penalties .

What once felt unmanageable became structured, evidence-based, and ultimately resolvable.

Key Takeaways

Whether it starts as an IRD risk review or progresses into a full IRD audit , transparency is critical. Disclose errors early, maintain clean coding practices, and conduct annual reviews of your financial systems. Proactive compliance is always less costly than reactive defence

Action Plan

Tax issues don’t disappear with time; they grow. So, get in touch with experienced advisers who can help you with a clear, honest approach, and can even turn complex audits into opportunities to reset, rebuild, and move forward with confidence.

Assisting a business owner through a complex IRD audit

Thu, 25 Sep 2025 02:50:39 GMT

IRD Audit Support for Business Owners

Assisting a business owner through a complex IRD audit

The Challenge

Faced with a complex IRD audit , a business owner with multiple active companies, approached Smart Tax Solutions Limited . The client already had a chartered accountant to manage their regular tax compliance. However, due to the scale and seriousness of IRD’s investigation, they realised that the audit required specialist expertise.

The stakes were high: discrepancies in financial reporting had triggered concerns from IRD, and the client now faced the potential for significant tax arrears, PAYE scrutiny, and penalties of up to 250%.

Our Advice

We began with an IRD risk review of the client’s financial records, covering four years of both business and personal bank statements. Our analysis confirmed discrepancies in reported sales across the companies, raising red flags for both GST and income tax obligations.

Understanding the gravity of the situation and the need to act swiftly, we advised the client to submit a voluntary disclosure to IRD. Our team managed the entire disclosure process - drafting and filing it on the client’s behalf, with full transparency.

Throughout the audit process, we acted as the client’s liaison with IRD - attending multiple meetings, managing expectations, and addressing complex queries, such as:

What IRD asks for during an audit?
How long does an IRD audit take?
What are the implications of a voluntary disclosure?

The Outcome

Our proactive and strategic intervention ensured IRD accepted the voluntary disclosure and agreed to waive shortfall penalties. This was a major win, given the severity of potential outcomes, including prosecution.

We worked closely with the client to establish robust internal processes and strengthen compliance practices across all entities, thereby minimising the risk of IRD investigations .

Key Takeaways

Proactive disclosure can significantly mitigate penalties.
In spite of an existing accountant, specialist support is essential during an IRD enquiry.
Ongoing compliance is not just about regular tax returns. It's about having the right systems in place to avoid IRD audit scrutiny.

Action Plan

An IRD enquiry can be daunting; but you don’t have to navigate it alone. Whether it’s a GST audit, PAYE audit, or preparing for an IRD audit, Smart Tax Solutions Limited is here to help with their expert and confidential IRD audit assistance, so you can move forward with clarity and confidence.

Get in touch today to learn how your trusted partner in tax compliance can support you.

Introducing Smart Tax Solutions Website

Mon, 02 Oct 2023 22:05:16 GMT

Welcome to the revamped home of Smart Tax Solutions Limited, your trusted partner in simplifying tax matters. We're thrilled to unveil our redesigned website, created with you in mind. Our commitment to delivering top-notch tax solutions now comes with an enhanced online experience.

Explore our user-friendly interface, where you can discover a range of valuable services designed to streamline your tax journey. Whether you're an individual seeking tax advice or a business looking to optimize your financial strategies, Smart Tax Solutions Limited has you covered.

Navigate with ease, discover with confidence, and let us help you make your tax experience smarter than ever. Welcome to the future of tax management, right here at www.smarttax.co.nz!

smart-tax-solutions-limited

From Risks to Results: How we resolved an IRD audit review

From Risks to Results

How we resolved an IRD audit review

The Challenge

Our Advice

The Outcome

﻿ Key Takeaways

Action Plan

Assisting a business owner through a complex IRD audit

IRD Audit Support for Business Owners

Introducing Smart Tax Solutions Website

Key Takeaways