What Is a Compound Offer Letter From the IRD?

A Compound Offer Letter is issued by the IRD when tax non-compliance or irregularities are identified. It combines enforcement action with an offer to settle the case without prosecution.

The letter typically includes:

• Details of the IRD’s findings and the nature of the non-compliance.
• The amount of additional tax, penalties, and interest payable.
• A proposed settlement amount to compound the offence.

If the taxpayer agrees, the signed letter must be returned to the IRD. A penalty invoice will then be issued with payment instructions and deadlines. If the taxpayer disagrees, they may correspond with the IRD to explain or negotiate, but the matter should be handled carefully.

Because compound offers can carry legal and financial consequences, professional support is strongly recommended.