There are many things to avoid in business, and one of the most unpleasant is triggering an IRD audit. Here’s how it commonly happens.
Having been involved in many tax investigations (on behalf of clients of course), I can confirm they are not very pleasant and can result in stress and serious financial difficulties, often leading to relationship breakups and bankruptcy.
What is an IRD audit?
According to the department, an Inland Revenue audit is an ‘examination of your financial affairs to check that you’ve paid the correct amount of tax, and your complying with tax laws’.
As a result, an audit process can be as simple or as exhaustive as the department requires in order to confirm the status of things like GST registration, taxes paid and even your personal finances.
If you’re found to be in the wrong, you may face fines or even criminal charges depending on the severity of the offence.