More taxpayers are storing information using â€ścloudâ€ť technology and using cloud-based software.Â While Inland Revenue is able to use its search powers to access information remotely in some situations, these powers require review to ensure Inland Revenue can access this information in all relevant circumstances.Â To maintain the integrity of the tax system it is important this information can be accessed in the same way as information stored digitally or physically on a taxpayerâ€™s premises.
The Search and Surveillance Act contains specific provisions on remote access search powers.Â A â€śremote access searchâ€ť is a search of an item such as internet data storage facility that does not have a physical address that a person can access and search.Â The powers in the Search and Surveillance Act, however, are crafted in relation to remote access searches authorised by search warrants.Â In many cases Inland Revenueâ€™s search powers are carried out without need for a search warrant (unless it is a search of a private dwelling).
Currently Inland Revenue accesses â€ścloudâ€ť or other remotely stored information in the course of exercising its search powers under the Tax Administration Act â€“ that is, when on-site at a business premises or private dwelling and the relevant storage is open.Â This might be, for example, an email account that is open on the computer at the premises being searched.Â Certainty is need on whether Inland Revenue is able to access electronically stored information under the following circumstances:
- when the account is closed and password protected;
- when the information is encrypted; or
- when information has been deleted remotely by the taxpayer upon Inland Revenue entering the premises.
To ensure Inland Revenue has the ability to obtain necessary or relevant information, no matter how stored, the Government proposes clarifying the rules around remote access searches by Inland Revenue.Â The preferred approach is to align the rules in the Search and Surveillance Act with clarification of how Inland Revenue uses the remote access rules, recognising that many Inland Revenue searches are carried out without requirement for a warrant.Â This will entail some remedial amendments to the legislative provisions governing remote access.