Prime Minister John Key has denied in parliament that he had anything to do with IRD's decision not to review foreign trust rules.
Mr Key faced a grilling at question time today over an issue that's been festering since early last week when it was revealed his personal lawyer, Ken Whitney, used his name when he lobbied against tightening the rules.
Mr Little asked Mr Key about people close to him receiving "special treatment" and Mr Key denied that.
He said Mr Whitney and a group of trust lawyers met Mr McClay to discuss their concerns, which was standard procedure.
"They didn't get special treatment. They were entitled to raise their concerns," he said.
Opposition MPs have been saying IRD had intended reviewing the rules but decided not to after Mr Whitney spoke to Mr Key and then led a delegation of trust lawyers at a meeting with the then revenue minister, Todd McClay.
In parliament today Labour's Grant Robertson questioned Revenue Minister Michael Woodhouse about the IRD's reasons for not reviewing the rules.
"The view at the time was that this would have required the Inland Revenue Department to dedicate significant resources to an area that did not affect New Zealand's revenue base," Mr Woodhouse said.
"Other issues on the tax work programme were deemed more important by both IRD officials and the then minister."
Labour leader Andrew Little says the IRD had started work on the review, which was in an action plan given to ministers in November 2014.
"After the December meeting between Todd McClay and Ken Whitney the minister ordered a halt to the review," Mr Little said in a statement.
"It's remarkable how quick this review was scrapped.
"There's no way Todd McClay - a new minister - would not have felt pressure from above."