You’re at your office, or home, and the doorbell rings – it’s the Canada Revenue Agency (“CRA”).
The first thing to do is find out why they’ve come. If it is an “inspection, audit or examination” of your books and records under §231.1 Income Tax Act (“ITA”) then they have a right to be at your place of business, during business hours, to do these things.
Just collect a copy of the business card of the officer and ask them to write what authority under the ITA they are relying on. Other than that cooperate with them, and produce your books and records.
If they are there to serve you with a “Requirement to Produce Information or Documents” under §231.2 then, they’ll have an RPID, in writing, to give to you. Subject to certain technical prerequisites this is something CRA is empowered to do.
Just collect a copy of the business card of the officer, as well as, a copy of the RPID and ask them to write on the back of their business card; whether it is you, or someone else, who is the subject of the RPID.
If it someone else, ensure that their name is listed on the front of the RPID. CRA must give you a “reasonable time” to produce the information or documents and use this time to consult with your accountant or lawyer. Normally, however, you’ll be required to produce the materials required.
Once again, be polite and listen to what is said. When the officer’s leave write everything you can remember down.
But, if they are at your house, or present you with a search warrant then this is something else entirely, and you need to know your rights.
There is no substitute for prompt legal advice, but the following suggests may assist you, when and if this ever happens to you:
1. Ask to see the search warrant before you let anyone in. If you are at home, step outside and close the door behind you while you examine the Search Warrant (“SW”) papers.
The searchers are required to show you a copy of the warrant or tell you what is in it before executing it. Examine the paperwork very carefully. The officers are required to leave you a copy of the SW when they leave.
SWs can be based on incorrect, incomplete or inadequate grounds and searches can be carried out as a “fishing” expedition by CRA; if any of those prove to be true then you do you have legal rights, but that is something that your lawyer will have to handle for you – in the future – while the search(es) are on-going your only responsibilities are to be observant, record everything that occurs, be polite and avoid a confrontation with the officers.
2. Ask the person in possession of the search warrant to identify themselves and all of those with him (or her) and to indicate whether those persons are authorized to aid in the execution of the warrant.
See if the persons who are present are listed on, or authorized by, the warrant to conduct the searches. Collect business cards from each of the searchers, and if someone doesn’t have a card then get a card from another searcher and have them write their information on the back of that card.
3. Request time to review the warrant and to obtain legal advice with respect to your appropriate course of conduct.
4. Read the warrant carefully to determine:
– the premises covered
– the specific documents or objects it covers
– the alleged offence(s) which are the subject of the warrant(s)
– Read the date and times that the warrant authorizes search.
While you do these things the officers will see that nothing is removed from the premises, either by you or by someone else; but as long as they can ensure this to be the case, they should give you the time to review and satisfy yourself on the terms of the SW.
5. At the same time that the warrant is being reviewed, instruct someone to make the following calls:
– to your legal counsel; say something like “Officer, I have nothing to say until I speak with my lawyer.” You have the right to be silent, use it.
NB: if your lawyer’s office, or home, is searched they should claim your solicitor-client privilege and follow the procedures set forth by their provincial Law Society. Because you are not the lawyer’s only client the lawyer should ask to have their Law Society send a representative out to attend at the search site and ensure that your lawyer’s other client’s rights and privileges are not violated.
– to your accountant
– other individuals named in the warrant whose offices or homes are to be searched. They should be told not to remove any books or records before the SW is executed on their premises.
6. If told that you must sit down and not use the phone, ask: “Am I under arrest?” If the answer is “No” or “Not yet” then no one has any right to touch you, or to hinder your use of the telephone.
If an officer does touch you, then ask again: “Am I under arrest?” If the answer is no, then say: “In that case, please take your hand off me.” If this happens call your lawyer immediately, and seek their advice.
Be polite and if you make an objection make it calmly and ensure that you record all of the details carefully.
It is possible that you may be subjected to “administrative detention,” which is practically like being arrested, but it will stop when the search is over.
7. Do not “agree” that the search can be expanded beyond the limits described in the warrant. If you are asked to “agree” say very clearly that you don’t agree and ask the officer in charge to witness your refusal.
This may be important if the officers make over-seizures; that is, take things not authorized by the warrant (and chances are that they will). Some such extra seizures may be authorized by law, but keep detailed notes and discuss this with your lawyer.
8. Do not answer any substantive questions; that is, don’t make any statements or allow yourself to be questioned without your lawyer being present – use common sense here.
If you insist on ignoring your right to remain silent, then when you do say something be honest and tell the truth.
9. The CRA will be accompanied by an RCMP officer, ask this officer for a business card as well. This officer is present to keep the peace and not to search. If the RCMP does appear to be searching or making seizures then tell your lawyer.
10. Keep track of the paperwork that is being seized; see that each item (as far as possible) is authorized for seizure by the search warrant and that the officers don’t engage in over-seizures. If they do take things not authorized by the warrant, then record the particulars and tell your lawyer – do not argue with the officers.
11. In the unlikely event that the searching officers damage your property then politely object to the officer in charge, giving any pertinent details and ask them to stop. Be sure to write down as much information as possible.
12. DO NOT attempt to impede, physically, verbally or otherwise, any person from executing a search warrant. To do so may be an offence.
If you believe that the warrant doesn’t authorize a particular seizure, then ask the officers to wait while you call your lawyer. Have your lawyer discuss any technicalities with the CRA officers.
13. If you have any documents over which solicitor-client privilege may exist, identify the documents and their location and indicate to the search officer that the documents are subject to solicitor-client privilege and that you require that the appropriate procedures be followed to protect the privilege.
This includes sealing the documents into a separate box, listing the contents (in general terms) and having the box taken to the Sheriff.
CRA will ask you to give them custody of these materials, but it is better to have them delivered to an independent third party.
14. Keep an accurate log (or copy) of all documents seized and have the officer in charge confirm that your copy is accurate – do this before the officers leave the premises.
If the officer(s) refuse then obtain from them a written undertaking tell you when you will get an inventory, and ask for both the paper and the electronic versions, to make reviewing the data easier on your lawyer.
15. If CRA takes a copy of your computer hard drive(s), or takes copies of your computer disks, CDs or DVDs then request a copy of all of the seized originals before they leave the premises.
If possible observe each disk being copied, and have the officer sign the copy, numbering each disk in the series (i.e., 1 of 5, etc.)
16. The CRA officer in charge, or team leader, will have sworn a document called an ‘Information to Obtain a Search Warrant’ (“ITO”) which was presented before a Justice who must be satisfied that the officer has reasonable and probable grounds that there has been an offence committed and that a search of the premises will disclosure evidence relating to the commission of that, or those, offence(s).
17. Once the search has been completed the officer in charge, or the searchers having, must file a “Report to a Justice” with the court, explaining what they did with the SW and listing what they took.
Examine the attached scheduled must list all that is seized, if you find any discrepancies between what is listed there and with what you recorded as seized tell your lawyer immediately.
18. Have your lawyer request the right to attend at the hearing before the Justice, when the Report to a Justice is presented.
19. Have your lawyer request a copy of the Witness List(s), for all of the officers who attended the search, as well as, a copy of their statements, any affidavits sworn in support of the Report to a Justice, and any Will Say Statements, as they become available.
If you are charged, your lawyer will be entitled to these documents, but do what you can to obtain copies as soon as possible, because any problems should be raised at the first possible opportunity by your lawyer.
20. Get your lawyer to obtain from CRA a copy of the ITO relating to the search warrant. They will also be available from the Court Office where it is a public document and can be obtained for the cost of photocopying – this ITO will prove to be valuable to your defence.
If you have not been charged with an offence under the Income Tax Act (“ITO”) or Criminal Code (“CC”) then CRA will require a Retention Order to keep your seized materials.
21. The Income Tax Act and Criminal Code each provide a code of rules which CRA officers must comply with in preparing ITO’s and executing warrants. If they have failed to do so or otherwise fail to comply with the law, then your lawyer may be able to pursue remedies on your behalf.
Just like you, CRA officers, are required to follow the law.
The more accurate and complete your search notes are, the more assistance you will be to your lawyer in ensuring that all of your legal rights have been protected.