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Any information or records you give an investigator will remain confidential and be kept secure.
It will be used or disclosed only as required by law.
During an audit we may collect information about you. This will be gathered from interviews, discussions, correspondence, or from your records. We collect this information so we can assess your tax liability or entitlements. You are required to answer all questions and provide any information we ask for. If you do not, you can be prosecuted and possibly fined.
Under the Privacy Act 1993, you are entitled to see almost all of the personal information we hold about you, and ask us to correct any errors.
You can expect an investigator to:
All investigators carry a delegation of authority card showing their name and photograph, and stating their legal authority to check your records. You can ask to see this at any time, and we recommend that you do so before you give them any information.
You are expected to be courteous and honest and to give reasonable assistance during an audit.
This includes giving access to your business premises and supplying information and documents. We don't expect you to stop all activity and focus on the audit, but your cooperation will mean we can finish the audit as quickly as possible with minimal disruption to you.
We cannot accept gifts from taxpayers. If you would like to recognise the work done by our investigator, you could send us a letter of acknowledgment.
If any of our investigator's questions are not clear to you, ask them to clarify the question so there is no misunderstanding. Most of the questions will be about your business, but some may be about your private activities. For example, you might be asked what you spend your money on, what bank accounts you have and what your leisure activities are. We ask these questions to check that you're living within the level of income you have returned.
You can have someone with you at an interview, or at any other time during the audit. This might be your tax agent, solicitor or a friend. But you will need to provide documented authority (such as a signed letter) before an investigator can discuss your tax affairs with another person present.
The investigator will take notes of all interviews held during an audit. You are also welcome to take notes. We may also record the interviews- in some circumstances a recording may be a requirement, and in others, the investigator requires your consent. You may request a copy of any tape and a copy of the investigator's notes. We will also ask you to sign the notes as being correct, but you have the right to refuse.
If you have to collect any extra records or information, we will give you reasonable time to do this before continuing the audit. We may ask you to fill in a Statement of assets and liabilities (IR110) form which lists your assets and liabilities at a particular date, or other forms that relate to your audit.
It's a serious matter if you obstruct an Inland Revenue investigator or officer as they carry out their audit.
Obstruction can mean:
A shortfall penalty may be increased by 25% for obstruction.
The investigator also has the right to enter your private dwelling if they have a court warrant.
Obstructing Inland Revenue in carrying out its lawful duties, or in exercising its lawful powers, is also an offence.
The penalties for conviction are up to:
There are some communications between you and your solicitor that you don't have to give us. This right, known as legal privilege, is allowed under the Tax Administration Act 1994.
Privileged communications must be for the purpose of getting or giving legal advice or assistance and must not relate to an illegal or wrongful act. Most records relating to a solicitor's trust account are not privileged.
If you are unsure whether a document is covered by legal privilege, we will give you reasonable time to consult a solicitor. This applies even on an unannounced visit.
If necessary, we'll ask the courts to determine whether a document is privileged or not. It's not a matter for the investigator to decide.
A non-disclosure right applies to tax advice documents which Inland Revenue wants to have disclosed. This right only applies to certain documents prepared by tax advisors bound by their code of conduct and disciplinary practices of an approved advisor group.
See Maintaining you status as a tax agent for a list of approved tax advisory groups.
The right also extends to:
For more information, go to our Operational Statement OS 18/02 Non-disclosure right for tax advice documents.
Two Acts give you the right to see most of the information we hold about you and your business.
We will factor in the intention of these Acts when considering your request. However, some records and information are protected from release by the Tax Administration Act 1994 which overrides the Privacy and Official Information Acts.
If you disagree with a decision to withhold information from you, you have the right to a review of the decision by the Ombudsmen. Contact the:
Office of the Ombudsmen
PO Box 10152
or call 0800 802 602.
You and the investigator should try to sort out any problems that arise between you. If this isn't possible you may need to contact the investigator's team leader or manager.
Corporates clients should contact their sector manager or specialist business manager.