Step-by-step guide to dealing with tax debt and issues
There are several key points to be aware of in dealing with tax debts and issues:
- If you have outstanding returns, the IRD will usually require these to be filed before any meaningful negotiations can occur.
- If you have not disclosed income to the IRD, the voluntary disclosure process is important.
- Some types of unpaid taxes are more likely to lead to trouble than others. For example, if you have unpaid PAYE this is generally more serious than unpaid GST. Unpaid GST is generally more serious than unpaid income tax.
- The goal of a negotiation is to lessen your risk and to find the best possible monetary solution in the circumstances. In other words, move the IRD‘s focus from the threat of a criminal prosecution to the issue being a civil matter. And move your shortfall of tax paid down the penalty continuum: evasion to abusive tax position to carelessness to lack of reasonable care.
- Once the base amount to be paid has been established, consideration can be given to a debt write off or a repayment arrangement.