Can I be penalised for an honest mistake on my tax return?
- 01.09.2026
Inland Revenue has issued an assessment that increases my tax liability substantially, based on an interpretation of the law that I believe is wrong. I want to formally challenge it. What is the correct process to dispute a tax assessment?
The disputes process under the Tax Administration Act 1994 is formal and time-limited. If Inland Revenue proposes to adjust your assessment, it typically issues a notice of proposed adjustment, and you generally have a limited period, usually two months, to respond with your own notice of proposed adjustment if you disagree, setting out the facts and law you rely on. If the dispute is not resolved, it proceeds through a disputes conference and then, if unresolved, either party can issue a statement of position, leading potentially to adjudication by Inland Revenue's disputes review unit, and ultimately to challenge proceedings in the Taxation Review Authority or the High Court. Missing a deadline can seriously prejudice your ability to dispute the assessment later, so get advice from a tax specialist as soon as you receive any correspondence indicating a proposed adjustment.
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