IRD Reviews & Audits – What Triggers Them and How to Prepare

Receiving a notice from Inland Revenue for a review or audit can be nerve-wracking — especially if you weren’t expecting it. While it may feel like you've been randomly selected, in most cases there are specific triggers that prompt IRD to take a closer look at your financials.

Common triggers include:

• Significant or sudden changes in income or expenses compared to previous years

• Large GST or income tax refunds that seem unusual based on your business size or activity

• Consistently late or missing returns

• Inconsistencies between your declared income and actual bank deposits

• Expenses that don’t match the nature or size of your business

• Tip-offs or information shared through data-matching programs

The good news is that with the right systems and support in place, you can reduce the risk and be fully prepared if IRD does come knocking.

So how do you prepare?

• Keep detailed and accurate records of all income, expenses, and supporting documentation

• Ensure your returns are filed on time, every time

• Double-check that the figures in your tax returns align with what’s in your bank statements and accounting software

• Avoid estimating figures without proper documentation

• Stay updated on current tax rules, especially if your business structure or operations change

If you're already concerned that your business might attract unwanted attention from IRD — or if you’ve received a review notice — don’t wait. Engaging an experienced tax professional early can make a major difference in how the process unfolds.

We can help you review your records, identify potential issues, and respond to IRD inquiries with confidence and clarity.

Remember: early intervention is always better than damage control. If you have any doubts or questions, reach out to us today.