Tax Debt Problems

Tax Debt Problems

Tax debt problems are extremely stressful until it is resolved with the Inland Revenue Department. It is stressful because it is not just civil liability of the tax debtor. In some cases, it can result in criminal liability also. Those who have been convicted of tax evasion can be liable on conviction to imprisonment. The IRD does prosecute tax evasion from time to time. As such, it is important to get on top of tax problems quickly. 

Whatever the tax position, talk to us. We can assist with:

  • Negotiating resolution of arrears in tax, such as GST, PAYE, Income Tax.

  • Dealing with and responding to letters of demand from the IRD.

  • Response to and settlement of civil legal proceedings served by the IRD (for example, Statement of Claim at District Court, Bankruptcy or Liquidation). 

  • Dealing with and/or defending criminal tax prosecutions. 

It is important when dealing with the IRD to resolve tax debt problems that the tax debtor:

  • Does not lie. 

  • Is meaningfully communicative. 

  • Is transparent. 

  • Align the tax debtors situation with the tax regime in order to get the most advantageous outcome.  

  • Use an expert to negotiate with the IRD. By doing so, the tax debtor increases the chances of better outcomes. Cheap can be expensive.

Tax Debt Solutions

We recognise that tax debt problems often occur because of unforeseen circumstances, bad advice or genuinely tough times. 

When we work with a tax debtor to solve the IRD tax issue:

  • We first obtain the facts. What happened? What went wrong? Why is the tax debtor in this situation?

  • We then look at the business and current circumstances to understand how the tax debt issue arose. We need to understand the fundamentals of how the problem arose so we can solve the historical problem but also make sure that it does not occur again.

  • We then communicate with the IRD in a meaningful manner setting out the relevant facts and applying it to the applicable law in order to obtain a favourable settlement with the IRD. Ultimately, the IRD simply seeks to maximise its tax recovery. We work with the tax debtor and the IRD to formulate a plan that is workable for all. 

Often, the IRD is willing to write off penalties and in some cases, interest and core tax. We regularly see the IRD demonstrate a willingness to enter into tax debt payment arrangements where the tax debtor can make payments of the historical debt over an extended period of time.

We help tax debtors present their case to the IRD in a manner most likely to be accepted.  

Avoid ​Liquidation or Bankruptcy due to Tax Debts

If tax debts are left ignored, it will likely result in bankruptcy (for individuals) or liquidation (for companies). 

The fastest way to this undesirable result is to be uncommunicative with the IRD.

Click here for more information on Bankruptcy.

Click here for more information on Liquidation.

If tax debt issues are left unresolved with the IRD and obligations (such as GST, PAYE, INC Tax etc) are left in limbo, it may result in serious Insolvency issues. We encourage early engagement to avoid this. 

Resolve Tax Debt Now

Please refer to our People for more information on who we are, our experience and how we can help. 

We offer a no obligation legal consultation where we can discuss:

  • The nature of the issues;

  • The ideal outcome;

  • Potential strategies to resolve issues and obtain the best outcome. 

Click here to book your no obligation legal consultation.