The Compliance Focus was released recently and Deloitte Dunedin tax partner Peter Truman said aspects of it could be unexpected.
"The underlying theme is that IRD exists to support New Zealanders through contributing to New Zealand's economic and social wellbeing by collecting and distributing money."
A subtle reminder of that was set out on the front page of the document - pictures of hospitals, schools and roads - to illustrate a higher sense of purpose overlaying the detail set out in the document, he said.
"It is looking to influence behaviours as perception works its way through the tax code.
People also feel better about paying tax if they think others are also paying their share, unlike countries like Greece where not complying with tax liabilities is viewed by some as a national pastime."
The main planks of IRD's approach were making it as easy as possible for people to understand their obligations and identifying those who did not comply so they could be chased up.
Penalties for getting it wrong were used as an incentive for people to get it right for themselves, Mr Truman said.
"An improved compliance framework is not achieved overnight. It is a long-term game with many building blocks."
The document sent a strong signal about the areas the IRD would focus on during the next 12 months, he said.
Among the items of note in the IRD document, Mr Truman highlighted the structures to divert personal income.
IRD was continuing to focus on structures business people had in place to divert the income earned from their personal effort into trusts or companies.
While the "immediate rate mischief" had now been reduced after the reduction in the top personal tax rate to 33%, there were advantages people sought through increased social support claims such as Working for Families or to reduce liabilities such as child support.
IRD was continuing to identify structures it considered inappropriately sheltered income, he said.
"While the property market has cooled off somewhat, IRD continues to have project teams focused on identifying taxable property transactions."
These could include properties bought with the intention of being "done up" and resold and some subdivision activities and transactions undertaken by persons related to property developers, he said.
IRD was accessing land transfer records and carrying out detailed analysis of transactions taking place to identify those which had the hallmarks of being taxable, Mr Truman said.
With the more difficult economic conditions that had prevailed in recent years, an increasing number of businesses had produced tax losses because of poor trading.
Those losses could be carried forward and offset against profits derived in the future, although where a company had a tax loss there were mitigating requirements, he said.
Because of the increased claims for brought-forward tax losses, IRD was putting a greater focus on ensuring the loss claims were correctly made.
The department would be checking for both basic arithmetic and transposition errors and also checking fully for changes in the ownership of companies that might have resulted in past tax losses being forfeited, Mr Truman said.
"Life is never quite that straightforward or easy, as tax is a complicated matter and mistakes happen. Often, it's only when the system is tested through having to deal with a mistake that the true relationship with the department emerges," he said.
