IRD's warrantless power of entry
"The Commissioner of Inland Revenue has the powers to fully and freely access places for the purpose of inspecting any documents, property, process or matter which are considered necessary or relevant for the purpose of collecting any tax or carrying out any function lawfully conferred on the Commissioner". IRD policy statement.
The Commissioner can remove documents for copying and/or inspection. The powers include warrantless power of entry.
This means that, except for private dwellings, the Commissioner does not need to obtain a warrant to access all lands, buildings and places.
Occupiers of places are required to assist the Commissioner by providing all reasonable facilities and assistance, and to answer all proper questions.
Inland Revenue officers can use reasonable force, including the services of a locksmith, where necessary to open property, such as locked doors and cabinets.
Step back from the shredder. Occupiers and other taxpayers who take steps to destroy documents or who fail to assist the Commissioner, could be liable to prosecution. The penalties for such offences range from fines to sentences of imprisonment.
In our experience unannounced visits from the IRD are extremely rare.
But in the event you do experience the unannounced visit from the IRD then follow two simple steps:
Ask the key question. Ask "Why?". No, don't bother asking the IRD officer because they have already decided you are guilty. The "why" should be directed at your tax advisor. Why has your business appeared on the IRD radar, and why does the IRD think the issue is that serious for the IRD to invoke a rarely used (and extreme) power?
Get a better tax advisor.