At one end there is the letter that comes out of the blue, after not hearing from them for 20 years, where they ask you to contact them. This letter means that you are on the IRD's radar, they know where you are, and the debt is not going to go away or be forgotten by the IRD. While it may be some time before the IRD takes serious steps against you (or it may be tomorrow), this type of letter means that it is time to get the debt sorted before things gets worse and before you run out of time.
A common stronger letter will be one that insists that you make contact within a stated amount of time (usually 30 days). This type of letter should not be ignored as doing so will mean that you will probably receive a demand notice in the near future. If the IRD knows that you are working hard and trying to find a solution this lessens the risk of their action against you being escalated.
Then there is the type of letter that is a "final notice" and which often states that the debtor has broken the law, is at risk of arrest, and that legal proceedings will be taken if payment is not made within a short time frame. Based on our many years of experience, these letters are not bluff and the IRD may even have the legal proceedings drafted and ready to go at the time when the letter is sent to you. Sometimes the letter will arrive personally via a process server, or by post, or by email. This type of letter is very serious and doing nothing may mean legal action and bankruptcy not just in New Zealand, but in the country in which you live. If you do get this kind of letter, urgent action is needed. Even if bankruptcy is your only real choice at this late stage, if you have the choice of bankruptcy in New Zealand or overseas, you are usually better off to try to keep this to New Zealand only, as the impact on your overseas credit rating, or your life overseas, may be minimal if you don't have much in the way of assets or income. If the IRD bankrupts you in the country in which you live the impact on your credit rating will be serious.