What It Means When IRD Puts Your Tax Return “Under Review”

Every now and then, Inland Revenue (IRD) decides to take a closer look at a tax return before they finalise it. They call this a “review”, and while it can sound stressful, it’s usually quite straightforward and doesn’t mean you’ve done anything wrong.

Here’s what actually happens behind the scenes, and what you can expect as a business owner.

Why IRD Reviews Tax Returns

When IRD reviews a return, they’re simply checking that the information you’ve filed matches what they already know about you.

They’re looking to confirm things like:

• The income you declared lines up with employer or bank records

• Deductions or expenses look reasonable

• Nothing important is missing

• Any unusual changes from past years make sense

Most of this is just part of IRD’s normal process — they receive heaps of data from banks, employers, and other sources, so it’s easy for them to spot anything that doesn’t match straight away.

What the Review Process Looks Like

A review is not the same as a full audit. It’s usually much lighter and quicker.

Here’s the typical flow:

1. IRD flags the return internally

This might happen if something looks different from last year, or if the return doesn’t match the other data IRD holds.

2. They may ask for more information

If IRD needs clarification, they’ll contact you (or us as your tax agent). They might ask for things like:

• A copy of an invoice

• Bank statements supporting income

• Evidence of an expense

• An explanation for a large or unusual item

Most of the time, these questions are simple and resolved quickly.

3. You respond with the information

Once IRD receives what they need, they continue their review.

4. IRD finalises the assessment

After checking everything, they’ll issue your final tax assessment.

Possible Outcomes

There are a few ways a review can end:

✔️ The return is accepted as filed

This is the most common outcome — IRD is satisfied, and your assessment is issued exactly as you lodged it.

📝 IRD makes a small adjustment

If they spot something that needs correcting (for example, missing interest income or minor errors), they might adjust it before final assessment.

We’ll always talk to you about any changes before they’re made.

📞 They ask more questions

If IRD needs extra clarification, the review can take a little longer. This still doesn’t mean anything serious is wrong — just that they want to be certain the details are correct.

⛔ If you don’t respond

If IRD asks for information and doesn’t receive it, they may issue an assessment based on estimates. This is never ideal, which is why responding promptly is so important.

When a Review Might Escalate

Very rarely, if IRD finds big discrepancies or believes something doesn’t add up, they may escalate the review into a more in-depth audit. This is uncommon and usually only happens where information is missing or there are repeated issues.

What you should do if your return is under review

1. Don’t stress - this is normal

Reviews happen to thousands of returns every year. It doesn’t mean you’ve done anything wrong.

2. Get your documents ready

Things like invoices, receipts, bank statements, or explanations of transactions are usually all that’s required.

3. Respond quickly

Responding on time helps IRD wrap things up faster and prevents unnecessary delays.

4. Let your accountant handle it

We deal with IRD all the time. We can review your return, check for anything that might cause issues, and respond on your behalf.

Final Thoughts

We know that hearing from IRD or having your return looked at more closely can feel stressful — even when you’ve done everything right. That’s why we’re always here to support you. If IRD asks questions or requests documents, we’re more than happy to help you work through the process, explain what’s happening, and make sure everything is handled correctly.

If you’d prefer us to manage all communication with IRD on your behalf, we can absolutely do that. Because this work is outside our standard compliance fees, our time is normally charged — which is exactly where Audit Shield becomes incredibly valuable. It covers our fees for dealing with IRD reviews, audits, and enquiries so you don’t have to worry about unexpected costs if something pops up.

If you’re not currently covered and would like to explore this protection, get in touch with the team and we can provide you with a quote for the cover.