Can the tax authorities search your home?

A tax search is one of the most intrusive procedures available to the tax authorities.

Provided for by Article L. 16 B of the French Tax Procedures Code (LPF), it allows officers of the tax authorities, with the prior authorisation of the liberty and custody judge (juge des libertés et de la détention), to enter business or private premises without warning in order to search for and seize evidence capable of revealing tax fraud.

It may directly concern the taxpayer suspected of fraud, but also third parties where the tax authorities consider that documents relevant to their investigation are likely to be held on their premises.

In practice, the intervention is often deeply unsettling: several officers may arrive at the same time, accompanied by a judicial police officer, without any prior notice to the taxpayer. The operations may last several hours and cover a large volume of documents, computers, email accounts and remotely accessible data.

When faced with such an intervention, the initial reactions are decisive.

1. Tax searches: a procedure strictly governed by law

In what circumstances may the tax authorities carry out a search?

A tax search cannot be used to look for any irregularity whatsoever.

Article L. 16 B of the LPF applies exclusively to offences relating to income tax, corporation tax and turnover taxes.

By contrast, this procedure cannot be used, in particular, to investigate offences relating to inheritance tax, gift tax or the real estate wealth tax.

The tax authorities must also point to presumptions of fraud falling within the cases provided for by law: purchases or sales without invoices, the use of invoices or documents that do not correspond to genuine transactions, deliberate omissions of accounting entries or the recording of inaccurate or fictitious entries in the accounting records.

The case law nevertheless accepts that mere presumptions may be sufficient to justify judicial authorisation. The tax authorities therefore need not prove the fraud conclusively before the visit: the very purpose of the search is to look for evidence of it.

A tax search must be authorised by the liberty and custody judge

The tax authorities cannot decide on their own to carry out a home visit.

Each operation must be authorised in advance by an order of the liberty and custody judge of the court within whose jurisdiction the premises concerned are located.

This order must in particular identify the premises to be visited and the officer authorised to carry out the operations, and must remind the taxpayer of their right to call on an adviser of their choice.

The judge must give reasons for the decision by setting out the factual and legal elements giving rise to a presumption that the fraudulent conduct under investigation has taken place.

Examining this order is therefore essential. An irregularity affecting the judicial authorisation may call into question the validity of all the operations carried out on its basis.

2. Tax searches at home: how does the visit unfold and what are your rights?

A surprise intervention that nonetheless remains subject to precise rules

The visit may not begin before 6 a.m. or after 9 p.m. It may, however, continue beyond 9 p.m., since the legislation sets no maximum duration for the operations.

It begins with service of the order on the occupant of the premises or their representative.

The operations take place under the authority and supervision of the liberty and custody judge, who may give any appropriate instructions, attend in person and, where appropriate, decide to suspend or halt the visit.

The occupant of the premises or their representative is in principle present during the operations. Where this is not possible, the judicial police officer calls upon two witnesses chosen from outside the persons under his authority or that of the tax authorities.

At the end of the operations, the tax authorities must draw up a record describing how they were conducted, together with an inventory of the documents seized.

These documents must be examined carefully, as they make it possible to verify precisely what was seized and under what conditions.

Electronic devices, email accounts, documents on remote servers: the tax authorities have very extensive powers of seizure

The tax authorities' power of seizure is not limited to paper documents.

Officers may seize computer data accessible from the premises visited, including where it is stored on servers located on other premises or abroad.

The items seized need not belong to the suspected taxpayer. They may also concern third parties, provided they have a connection with the fraudulent conduct under investigation.

Determining the exact scope of the seizures then becomes a key issue.

Some documents may have been taken even though they have no connection with the facts covered by the order. Others may be protected by professional secrecy. In such cases, the lawfulness of their seizure may be challenged.

It is, on the other hand, strongly inadvisable to obstruct the operations physically.

Obstructing access to computer data may in particular lead to an ex officio assessment for obstruction of a tax audit and to a specific fine of up to 50,000 euros, or 5% of the duties reassessed if that amount is higher.

The challenge is therefore not to resist the search physically, but to scrutinise its conduct from a legal standpoint and to safeguard your rights immediately.

3. Challenging a tax search: acting promptly

Two separate remedies are available

Article L. 16 B of the LPF makes it possible to challenge, on the one hand, the order of the liberty and custody judge authorising the visit and, on the other, the conduct of the search and seizure operations.

These appeals are brought before the first president of the court of appeal and must, in both cases, be lodged within fifteen days. They do not have suspensive effect.

The procedure must therefore be analysed without delay in order to identify any irregularities and preserve the available remedies.

An irregularity may render the seized material unenforceable against the taxpayer

The annulment of the order authorising the visit entails the annulment of the operations carried out on its basis. The tax authorities may then no longer use the information gathered to justify reassessments.

Likewise, documents seized that have no connection with the facts under investigation, or in breach of professional secrecy, may be excluded and become unenforceable against the taxpayer.

A search is, however, merely an investigative measure: it does not in itself result in a tax reassessment. A reassessment requires the subsequent initiation of an audit procedure and, where appropriate, a reassessment procedure.

The involvement of a tax lawyer makes it possible to examine immediately the lawfulness of the order and of the seizures, to pursue the necessary remedies and to anticipate the tax audit that may follow.

The firm supports taxpayers faced with a tax search in order to safeguard their rights, challenge any irregularities identified and prepare their defence against any subsequent action the tax authorities may take.