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Tax Administration Act 1994

Disputes procedures - Notices of proposed adjustment

89C: Notices of proposed adjustment required to be issued by Commissioner

You could also call this:

"When the Commissioner Might Send You a Notice Before Changing Your Tax"

Illustration for Tax Administration Act 1994

The Commissioner must give you a notice of proposed adjustment before making an assessment, unless certain conditions are met. You will not get a notice if your assessment matches your tax return or if it corrects a simple mistake. The Commissioner can also skip the notice if they think you might leave New Zealand or hide your assets to avoid paying tax, or if you have been involved in fraudulent activity.

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Topics:
Money and consumer rights > Taxes
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89B: Commissioner may issue notices of proposed adjustment, or

"The Commissioner can send you a notice to fix mistakes in your tax return."

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89D: Taxpayers and others with standing may issue notices of proposed adjustment, or

"You can question a tax bill by sending a notice of proposed adjustment."

Part 4ADisputes procedures
Notices of proposed adjustment

89CNotices of proposed adjustment required to be issued by Commissioner

  1. The Commissioner must issue a notice of proposed adjustment before the Commissioner makes an assessment, unless—

  2. the assessment corresponds with a tax return that has been provided by the taxpayer; or
    1. the taxpayer has provided a tax return which, in the Commissioner's opinion, appears to contain a simple or obvious mistake or oversight, and the assessment merely corrects the mistake or oversight; or
      1. the assessment corrects a tax position previously taken by the taxpayer in a way or manner agreed by the Commissioner and the taxpayer; or
        1. the assessment reflects an agreement reached between the Commissioner and the taxpayer; or
          1. the assessment is made in relation to a matter for which the material facts and relevant law are identical to those for an assessment of the taxpayer for another period that is at the time the subject of court proceedings; or
            1. the Commissioner has reasonable grounds to believe a notice may cause the taxpayer or an associated person—
              1. to leave New Zealand; or
                1. to take steps, in relation to the existence or location of the taxpayer's assets, making it harder for the Commissioner to collect the tax from the taxpayer; or
                2. the Commissioner has reasonable grounds to believe that the taxpayer has been involved in fraudulent activity; or
                  1. the assessment corrects a tax position previously taken by a taxpayer that, in the opinion of the Commissioner is, or is the result of, a vexatious or frivolous act of, or vexatious or frivolous failure to act by, the taxpayer; or
                    1. the assessment is made as a result of a direction or determination of a court or the Taxation Review Authority; or
                      1. the taxpayer has not provided a tax return when and as required by a tax law; or
                        1. the assessment is made following the failure by a taxpayer to withhold or deduct an amount required to be withheld or deducted by a tax law or to account for an amount withheld or deducted in the manner required by a tax law; or
                          1. the taxpayer is entitled to issue a notice of proposed adjustment in respect of a tax return provided by the taxpayer, and has done so; or
                            1. the assessment corrects a tax position taken by the taxpayer or an associated person as a consequence or result of an incorrect tax position taken by another taxpayer, and, at the time the Commissioner makes the assessment, the Commissioner has made, or is able to make, an assessment for that other taxpayer for the correct amount of tax payable by that other taxpayer; or
                              1. the assessment corrects a tax position taken by the taxpayer in relation to a tax position taken by a look-through company in a return of income under section 42B, and the Commissioner and the company have completed the disputes process for that return of income and that tax position; or
                                1. the assessment results from an amendment made under section 22G(6); or
                                  1. the Commissioner is making an amendment before finalising the account of a qualifying individual under section 22H; or
                                    1. the assessment is of a penalty under section 142H or 142I; or
                                      1. the assessment extinguishes all or part of a taxpayer's tax loss in accordance with section 177C(5); or
                                        1. the assessment extinguishes all or part of a taxpayer’s excess amount under section EL 4 of the Income Tax Act 2007 in accordance with section 177C(5BA); or
                                          1. the assessment includes a calculation by the Commissioner of a tax credit under the family scheme.

                                            Notes
                                            • Section 89C: inserted, on , by section 11 of the Tax Administration Amendment Act (No 2) 1996 (1996 No 56).
                                            • Section 89C: amended, on (applying to 2002–03 and subsequent income years), by section 202(1) of the Taxation (Taxpayer Assessment and Miscellaneous Provisions) Act 2001 (2001 No 85).
                                            • Section 89C(db): inserted, on (applying to assessments for which notices are issued on or after 1 April 2005), by section 95(1) of the Taxation (Venture Capital and Miscellaneous Provisions) Act 2004 (2004 No 111).
                                            • Section 89C(db): amended, on , by section 232 of the Taxation (Depreciation, Payment Dates Alignment, FBT, and Miscellaneous Provisions) Act 2006 (2006 No 3).
                                            • Section 89C(eb): inserted, on (applying to assessments for which notices are issued on or after 1 April 2005), by section 95(2) of the Taxation (Venture Capital and Miscellaneous Provisions) Act 2004 (2004 No 111).
                                            • Section 89C(eb): amended, on , by section 190 of the Taxation (Savings Investment and Miscellaneous Provisions) Act 2006 (2006 No 81).
                                            • Section 89C(g): amended, on (applying to 2002–03 and subsequent income years), by section 202(2) of the Taxation (Taxpayer Assessment and Miscellaneous Provisions) Act 2001 (2001 No 85).
                                            • Section 89C(i): replaced, on (effective for 2008–09 income year and later income years, unless the context requires otherwise), by section ZA 2 of the Income Tax Act 2007 (2007 No 97).
                                            • Section 89C(k): amended, on (applying to 2002–03 and subsequent income years), by section 202(3)(a) of the Taxation (Taxpayer Assessment and Miscellaneous Provisions) Act 2001 (2001 No 85).
                                            • Section 89C(k): amended, on (applying to 2002–03 and subsequent income years), by section 202(3)(b) of the Taxation (Taxpayer Assessment and Miscellaneous Provisions) Act 2001 (2001 No 85).
                                            • Section 89C(k): amended, on (applying to assessments made or deemed to be made on or after 1 April 1999), by section 25(1) of the Taxation (Simplification and Other Remedial Matters) Act 1998 (1998 No 101).
                                            • Section 89C(ka): inserted, on , by section 152 of the Taxation (GST and Remedial Matters) Act 2010 (2010 No 130).
                                            • Section 89C(l): replaced, on , by section 51 of the Taxation (Annual Rates for 2018–19, Modernising Tax Administration, and Remedial Matters) Act 2019 (2019 No 5).
                                            • Section 89C(lbaa): inserted (with effect on 1 April 2019), on , by section 211 of the Taxation (KiwiSaver, Student Loans, and Remedial Matters) Act 2020 (2020 No 5).
                                            • Section 89C(lba): inserted, on , by section 13 of the Taxation (Business Tax, Exchange of Information, and Remedial Matters) Act 2017 (2017 No 3).
                                            • Section 89C(lb): inserted, on , by section 166 of the Taxation (Tax Administration and Remedial Matters) Act 2011 (2011 No 63).
                                            • Section 89C(lbb): inserted, on , by section 188(2) of the Taxation (Annual Rates for 2022–23, Platform Economy, and Remedial Matters) Act 2023 (2023 No 5).
                                            • Section 89C(m): inserted, on (applying to 2002–03 and subsequent income years), by section 202(4) of the Taxation (Taxpayer Assessment and Miscellaneous Provisions) Act 2001 (2001 No 85).
                                            • Section 89C(m): amended, on , by section 39 of the Families Package (Income Tax and Benefits) Act 2017 (2017 No 51).
                                            • Section 89C(m): amended, on (effective for 2008–09 income year and later income years, unless the context requires otherwise), by section ZA 2 of the Income Tax Act 2007 (2007 No 97).