Tax firm Deloitte is reminding the public of the Inland Revenue’s \”scary\” search powers after a decision in the High Court.
Deloitte said a ruling after the Inland Revenue seized documents from properties linked to former Dragons’ Den star Paul Webb and his business associate Andrew Tauber illustrates the extent of the tax man’s reach.
Webb and Tauber were raided by the IRD in March, as part of an investigation into the pair’s tax affairs.
The IRD would not comment yesterday on the status of the investigation.
Webb, Tauber and their associates issued court proceedings in April challenging the lawfulness of the search operations.
They sought a court order requesting the Inland Revenue to return the documents seized and to destroy or deliver any photographs or videos taken.
One of their complaints involved the search of a child’s bedroom and the photographing of an open underwear drawer.
According to evidence filed by the IRD, the photo was taken because the drawer contained a BlackBerry phone.
The application challenging the search was dismissed by Justice Venning in August.
While the Inland Revenue’s right to search is not new, Deloitte partner Greg Haddon said the decision showed the tax commissioner’s search and seizure powers are likely to be broader than any other branch of the Crown.
\”[The ruling] identified a number of situations where perhaps in a criminal case, the search and seizure right wouldn’t have existed but under a tax case it does,\” Haddon said.
\”The rules around what that warrant looks like is a lot looser [in a tax case] than what would be required under a criminal case. Under a criminal case the warrant’s required to be specific about who is entitled to [enter a premise] plus what things they’re allowed to look at,\” he said.
The IRD does not need a warrant to search a business and copy documents found there and only requires one when it wants to search a private dwelling or take documents away, he said. Any information deemed necessary or relevant to a tax investigation can be copied or seized.
Haddon said the IRD can take anyone in it deemed appropriate to search a property, including police, dog control officers or locksmiths.
However, the public did have rights if the tax inspectors came knocking.
\”You certainly want to read the warrant if they’ve got one. If it’s a private dwelling and they don’t, don’t let them in.\”
TAX PROBES
IRD search and seizure powers:
* Can search a business without a warrant and copy documents.
* Can search a private dwelling or take documents away, but needs a warrant to do this.
* Any information the IRD deems relevant to an investigation can be taken or copied.
* Can bring dog control officers, police and locksmiths along with them.
By Hamish Fletcher
Reference: http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=10756846