REAL ESTATE SECTOR AUDIT
IRD have recently launched an audit campaign targeting those engaged in the real estate sector (real estate salespersons/agents).
This campaign is being run by the IRD’s Hidden Economy unit and will focus on suspected under reporting of income and overclaiming of expenses. For example, IRD’s analysis suggests expenses claimed are disproportionate to the levels of income reported and therefore believe private expenses are being offset against income to reduce tax payable. Of further concern is the lack of adequate records being maintained in support of expenses (e.g. log books, bank statements, invoices, etc).
IRD will send out letters to those with whom they are concerned and are likely to request documents such as bank statements, logbook and other information in support of expenses claimed. IRD is encouraging those engaged in this sector to disclose any errors voluntarily before a letter is issued or an audit undertaken. If you receive a notification from the IRD please contact us so that we can assist you with the review process.
To help raise awareness, IRD will be working with the Real Estate Authority (REA) and the Real Estate Institute of New Zealand (REINZ) to engage and educate their members.
If you have any concerns or would like to discuss anything further, please contact your Campbell Tyson advisor.
Please see here for more information: Real estate sector the focus of new Inland Revenue campaign