How to handle issues with the IRD
The IRD can be a scary bunch even if you don’t get offside with them, so it’s best to be wary of how you talk to them and handle any issues that arise. As many have found, the consequences of getting your tax obligations wrong can deplete your wallet considerably, perhaps even leading to bankruptcy and financial ruin.
Ideally of course, it’s best to avoid getting into a situation where it’s necessary to even have contact with the IRD. If you file all your returns and pay on time, and take a reasonable approach with taxes, you can keep a low profile and thus avoid getting yourself into an audit or enquiry situation. After all, it’s mostly common sense, and there’s always someone out there doing something really stupid to take the heat off you (such as filing tax returns showing $10,000 worth of income with no other means of support).
You should also avoid asking the IRD for advice. If you ask what they consider to be easy questions, it’s a bit of a giveaway that you don’t know what you’re doing. That means they might come a-calling to see what else you don’t know or have done wrong on your returns. In any case, it’s a bit like the poacher asking the gamekeeper for advice! Are they really going to go out of their way to help you reduce their taxes? The most ridiculous thing I’ve heard of are people who used to deliver their books to the IRD and ask them to work out their taxes — how crazy is that?