Voluntary disclosure to IRD
Voluntary Disclosure to IRD: A Pathway to Rectify Tax Issues
For many businesses and individuals, voluntary disclosure is a proactive approach to rectify previous tax inaccuracies with the Inland Revenue Department (IRD). This process can be essential for reducing penalties, avoiding potential prosecution, and securing a fresh start in tax affairs. However, it is crucial to approach voluntary disclosure with accuracy and precision, as submissions are reviewed carefully by the IRD and may lead to further investigation.
Why Make a Voluntary Disclosure?
The decision to make a voluntary disclosure is often driven by the desire to rectify tax misstatements or omissions, which might have occurred due to misunderstandings, mistakes, or even unforeseen financial challenges. Making a disclosure before the IRD initiates any audit or investigation offers significant benefits:
Reduction in Penalties: Disclosures made before notification of an impending IRD investigation can lead to substantial penalty reductions.
For instances where the shortfall penalty is due to not taking reasonable care, taking an unacceptable tax position, or an unacceptable interpretation, the penalty can be reduced by 100%.
For other situations, a 75% reduction is available.
Minimized Risk of Prosecution: Timely voluntary disclosure can also mitigate the risk of prosecution, providing a degree of assurance for business owners looking to rectify their tax affairs in good faith.
How IBBZ Accounting Can Assist
At IBBZ Accountanting, we are committed to supporting clients through the voluntary disclosure process, ensuring that submissions are meticulously prepared to meet IRD standards. Our services include:
- Guidance and Consultation: We provide in-depth consultations to help you understand whether voluntary disclosure is appropriate for your situation, considering both the short- and long-term implications.
- Accurate Disclosure Preparation: Our team works with you to collect, verify, and organize all necessary documentation to create a clear, accurate disclosure that addresses all relevant tax shortfalls.
- Negotiating Settlements with the IRD: Leveraging our experience, we negotiate on your behalf to secure the most favorable terms possible, minimizing penalties and helping you gain certainty over your tax obligations moving forward.
Through this tailored support, IBBZ Accountants ensures that the voluntary disclosure process is not only manageable but also effective in achieving the desired outcome with the IRD.
Read More about Voluntary Disclosures to learn how taking control of your tax obligations can protect your business and foster a reliable relationship with the IRD.