IRD will occasionally visit workplaces. Whether it is a building site or an office, there are certain practices that may assist you in any later dispute.
The first is to limit IRD’s access as much as you can. Provide IRD with a meeting room or other segregated space to which you can bring them requested materials.
Secondly, seek advice. Do not be afraid to call your tax agent when you are aware that IRD is present or intending to visit. If IRD is at a worksite, but your files are at your office, you can request that IRD visits the office at an agreed time and arrange for your tax agent to be there with you.
Should IRD request documentation, before providing IRD with copies of documents it is important to consider whether any are protected tax advice documents or legally privileged documents. It is good practice to keep tax advice documents and legally privileged documents in separate files to other business records. This is to ensure you can claim privilege should the need arise. The protection afforded to tax advice documents and legally privileged documents can be lost. Accordingly, you need to control who has access to these types of documents. For example, a tax advice document may lose its protections if incorporated into an auditor’s work paper file. Equally, you should not grant IRD access to privileged documents without seeking advice. It is important that you work through this process with your advisers as soon as possible to ensure that you do not accidentally forfeit privilege.
You should keep a copy in a separate file of any document you have provided to IRD. This ensures that you and your advisers know exactly what information the IRD has, and what it does not.
When IRD asks questions, stick to the facts. If IRD asks you a question, answer it truthfully and do not speculate or provide the answers that you think IRD wants to hear. Answer only that question and do not volunteer information. It is important that you keep a record of what you say, for example by taking notes.
By following the above practices, you give yourself the best opportunity with any subsequent query or dispute. Findex has experts in tax disputes throughout the country. If you would like further information, contact your Findex Adviser.