IRD Audittax audittax audit insurance

Tax Audit Stats

We received some interesting stats from our Tax Audit insurer this week outlining what they are seeing across the country in terms of claims.

Here’s the summary –

  1. The 3 most common areas of audit activity are GST Verifications (55%), Income Tax Return reviews (27.69%) and Client Risk Review (9.74%)
  2. They have seen increases of 48% in GST Verification activity and 67% increase in Income Tax Return activity
  3. Overall they have seen an increase of 31% of claims lodged

Just as an example, just before Christmas we received a list of clients that had purchased and sold property/s within the Brightline period with a please explain request as to what the property had not been disclosed as a sale in the tax return. Now there are reasons why it didn’t need to be disclosed but the IRD don’t know that so the project was started to go through with the information gathering exercise and replying and are happy to say that it has been completed. We unfortunately now wait for the next list whenever that may be.

So we need to all be aware that the IRD now are collecting a lot of data electronically (both from within NZ and overseas) and are matching and storing that data.

Remember that there is tax audit insurance still available .. click here to read about it. Contact Anne if you would like to take it up.