The IRD has wide investigative powers. It is entitled to full and free access to your business premises without warrant and, with an access warrant, to private homes. It will normally notify an investigation and request information formally or informally. Failure to respond to information requests can lead to serious consequences, including criminal penalties. It is important to take advice on the scope of an information request to be sure that what is supplied conforms with the notice and that no competing interests (such as claims of privilege) are compromised.
If the IRD seeks access to premises without notice it now routinely seeks to gain access to computer records and to clone computer hard drives. It is important that procedures for this are agreed with the IRD and that information which is protected from disclosure is not disclosed unwittingly.
Sometimes as part of an investigation the IRD can compel a person to undergo an interview on oath which is recorded. You have no right against self incrimination in such interviews but you are entitled to legal representation and you should be advised by someone who is familiar with the IRD’s processes and with tax law.
Tax investigations are often on-going. They require the application of time, personnel and resources and have to be managed to ensure that they are conducted efficiently and with the least disruption to your business. It is best to arrange for information requests to come to one member of your staff and for them to be copied to a nominated adviser so that what is being sought is clear to all. An investigation diary should be kept to keep track of agreed deadlines. Copies of everything that is supplied to the IRD should be taken. Where the IRD has removed material for copying, strict agreements should be made to cover how the material will be used, who will see it, and how claims to non-disclosure are to be made and tested.