Inland Revenue says I owe years of back tax, what should I do?

Act promptly, since ignoring the assessment allows interest and penalties to keep accruing. Under the Tax Administration Act 1994, you can dispute an assessment if you believe it is wrong, but there are strict time limits, usually within a set number of days of receiving a notice of proposed adjustment or the assessment, so get advice from a tax agent or lawyer immediately to check the deadline. If the assessment is broadly correct, Inland Revenue has discretion to remit penalties in some circumstances, for example where you have taken reasonable care or voluntarily disclosed the error, and a voluntary disclosure before Inland Revenue notifies you of an audit can significantly reduce shortfall penalties. You can also apply for an instalment arrangement if you cannot pay in full. A tax agent can help review the calculation, gather records and negotiate with Inland Revenue.