How we negotiated a client’s $500K tax debt down to $25K

11 May, 2018 | Bret Gower

Have you been behind with your tax payments and need some direction to tidy up your returns?
At Smith and Partners we have had some recent success for our clients to reduce their tax payments to the Inland Revenue Department (“IRD”).

What was the situation?

We had a client who was in significant arrears with the IRD amounting to approximately $500,000. This particular client had three separate entities that had, due to unforeseen circumstances, failed to file annual tax returns for a number of years.
This client had:

  1. A company;
  2. A trust; and
  3. Personal debt.

The client came to us for advice because the IRD had served him with bankruptcy proceedings and his company with liquidation proceedings.

What did we do?

First, we explained the consequences of the each proceeding to our client. Understanding the steps and the timelines in a legal proceeding can help reduce a client’s stress levels allowing them to approach the issue sensibly.

Second, we engaged an accountant who specialises in tax compliance to file tax returns for each legal entity to bring all the tax administration up to date. Although this was a significant task, it greatly assisted with our client’s ability to approach IRD to negotiate a settlement and to avoid bankruptcy.

Third, after receiving advice from the accountant as to the correct amounts payable, we approached IRD with a settlement proposal (including an application for financial assistance).

What was the outcome?

The outcome was an astounding $475,000 reduction in the tax payable! Our client was able to avoid bankruptcy and resolved the matter entirely by paying a lump sum of $25,000.

AND, most importantly, our client could move on with life free of the stress of having arrears with the IRD.

 If you would like further information in relation to negotiating a settlement with IRD to eliminate your tax problem please contact Bret Gower on 09 837 6893 or email bret.gower@smithpartners.co.nz

 

Do you need help with a ballooning IRD debt?

Let us help ease your stress and get your debt sorted – contact our tax law expert, Bret Gower today to set up an appointment.

email Bret
09 837 6893

About the author

Bret is a key member of the commercial team at Smith and Partners, having joined the firm after a successful career as a design agency owner. Bret’s clients have confidence in him because of his unique combination of down-to-earth communication
Read More »

Related articles

What Happens When an IRD Dispute Is Referred to the Disputes Review Unit?

Jan 16, 2018 | Read more »

Inland Revenue Disputes: What Might Happen and What Can You Do?

Jan 16, 2018 | Read more »

What is Bankruptcy?

Dec 14, 2016 | Read more »

Alternatives to Bankruptcy

Oct 31, 2013 | Read more »