Powers of the IRD

Powers of the Commissioner
The powers of the Commissioner of Inland Revenue are extensive.

The Inland Revenue Department Act gives the Commissioner and officers of the department very wide powers, enabling them to obtain all the necessary information for the administration of the Tax Act, concerned principally with the collection of income tax and duties, etc.

The Act gives the Commissioner, on behalf of the IRD, powers perhaps unprecedented in any other public office.

The main powers conferred are briefly summarised as follows:

  1. Inspection of books and documents.
    The Commissioner or his officers have powers of free access to all land, buildings and places, and all books and documents for the purpose of inspecting where they consider it necessary or relevant in the collection of tax.

  2. Power to remove and copy documents.
    The Commissioner of Inland Revenue or any officer of the IRD is authorised to remove any book or document inspected for the purpose of making copies. This power is intended to prevent taxpayers from destroying records that the IRD considers necessary to an investigation.

  3. Power to carry out tax audits and investigations.
    The Commissioner has the power to call for the examination of the returns of all taxpayers in depth within a 5 year cycle in addition conducting annual checking of returns (even if on a less detailed manner). The checking of returns are made on a more limited basis so routine enquiries are substantially reduced.

  4. Owner or manager to provide assistance.
    For the purpose of any investigation, the tax office may require the owner or manager of any property or business being investigated to give all reasonable assistance and answer all questions relating to an investigation.

  5. Information must be given on request.
    Any person, whether a taxpayer or not, shall if required by the Commissioner furnish in writing all information or produce any books or documents considered necessary. They may require information in writing or books and documents to be produced at any IRD office.

  6. Enquiries before a district court judge.
    The Commissioner is given power to hold any enquiry before a judge and for this purpose all persons called can be examined under oath. The enquiry is usually held in chambers.

  7. Power to request attendance.
    The Commissioner has the power to require any person to attend and give evidence and to produce all documents and information necessary to an investigation. It is an offence to refuse to attend or give evidence or to neglect to appear or take an oath.

  8. Recovery of tax.
    The Act empowers the Commissioner with special powers to enforce the recovery of tax not paid. He has the power to impose additional tax by penalty or sue for overdue tax in court, or require deductions from an employer’s income and debtors.

  9. Power to deduct from wages.
    The Commissioner has the power to deduct any overdue tax from wages or salaries. This power is also increased so the Commissioner can order any bank to deduct money from a bank account to clear any unpaid tax.

  10. Determine loss and tax credit.
    The Commissioner has the power to fix the current loss of a business, as well as determining any credits to be allowed to that business.

  11. Determining loss carried forward.
    The Commissioner can fix the loss the business can carry forward. A notice has to be issued showing the amount determined by the Commissioner.

  12. Extending time to file.
    The Commissioner has the power to extend time for furnishing tax returns.

  13. Rule on residency status.
    The Commissioner has the power to make a ruling on the residency status of any taxpayer.