Immigration officials allegedly forced their way into a house and took photos of a 5-year-old boy so they could send him to China with his overstaying parents.
The family's immigration agent, Tuariki Delamere, has lodged a police report accusing immigration officials of unlawful entry, assault and fraud.
"This is one of the most disgusting cases I have come across, and it just makes me so angry," he said.
Mr Delamere, a former immigration minister, said officials needed to process travel documents to send 5-year-old New Zealand-born Eason Diao to China with his parents, who are overstayers.
But when his mother did not let them, the officials allegedly entered their home, grabbed Eason off the couch as he was watching television, pushed him against the wall and snapped the photographs they needed for the entry permit into China.
It was also alleged that the officials then made Ms Hao sign a handwritten letter they had written in poor English, stating that she wanted to take Eason, a New Zealand citizen, back to China to learn Chinese for three months.
Eason's father, Chuanjin Diao, was arrested on January 15 for being an overstayer and imprisoned.
The boy's mother, Xianglan Hao, suffered a mental breakdown while visiting Diao at Mt Eden Prison last Friday and was admitted to hospital after learning that her husband was to be expelled.
Immigration records state that Diao came to New Zealand from Liaoning, China, in October 2001 and provided false documents to support his business visa application, which has since expired.
Xianglan Hao, also from Liaoning, arrived in 2001 as a visitor, and neither renewed their visas after they expired.
Immigration documents stated that both Diao and Hao, who worked as painters, did not qualify for temporary or residence permit under current policy.
After interviewing the couple, immigration officer Aiden Rolls wrote in a report: "I do not believe there are any exceptional circumstances of a humanitarian nature that would make it unjust or unduly harsh for the family to be removed from New Zealand."
Eason is temporarily being cared for by Mr Delamere. Under the British Nationality and New Zealand Citizenship Act 1948, Eason automatically became a citizen because he was born before the law change in 2006.
"The department may have the legal rights to remove the parents from the country, but as a New Zealand citizen, Eason is entitled to his rights. We often criticise the human rights records of China and Asian countries, but sometimes we are far worse in New Zealand."
Lawyer Frank Deliu, who is acting for the family, said: "It is not only legally wrong, but civilly and morally wrong as well.
"This could bring New Zealand's reputation into disrepute internationally ... This child, a citizen, one of our own, is being left out high and dry. It's just not right."
Immigration New Zealand chief Andrew Annakin said the service was taking the allegations very seriously and was instructing an independent investigator to look into them.
"The fact that foreign nationals have a New Zealand-citizen child does not, in itself, give them a right to stay or reside in New Zealand. But no two cases are the same, and therefore a great deal of judgement and sensitivity is required," Mr Annakin said.
A spokesman for Immigration Minister Jonathan Coleman said: "The minister views these as very serious allegations and is demanding a full report from the Department of Labour [which oversees Immigration NZ]. Until such time as the minister has all the facts before him, he is unable to comment further."