Search and seizure in tax criminal proceedings

Admissibility of search at the suspect's home

Search and seizure are the most important and frequent criminal procedural measures and often the situation in which the person concerned is confronted with the proceedings against him for the first time. In contrast, the formal notification of the initiation of criminal tax proceedings is rather the exception.

The admissibility of the search of the suspect is regulated by Section 102 of the Code of Criminal Procedure (StPO). According to this, an initial suspicion, i.e. the existence of sufficient factual indications from which, according to criminalistic experience, a tax offense can be concluded, is sufficient for ordering the search. The search covers the suspect's home and other rooms as well as his person and property belonging to him. This includes, in particular, bank safe deposit boxes belonging to the suspect. If the suspect has acted as a representative of a legal entity, the premises of the legal entity are also included. Computers of the suspect can be searched by commissioning and data medium reproduction.

Data of the person concerned stored on external storage media (on a server in the Intranet or Internet) may be searched in accordance with Section 110 (3) of the Code of Criminal Procedure in order to determine their relevance as evidence. If this is the case, the data may be saved. Since this may also affect the owner of the external storage medium, Section 110 (3) sentence 2 provides for a court decision in accordance with Section 98 (2) of the Code of Criminal Procedure. In this case, the owner of the external storage medium must first be granted a hearing in accordance with Section 33 (2) and (3).

Not covered by Section 102 are emails of the suspect that are in his mailbox. They are subject to telecommunications surveillance pursuant to Section 100a of the Code of Criminal Procedure. According to this, the search of the emails is only possible if the suspicion against the person concerned relates to a so-called catalog offense of § 100a para. 2. From the tax code these are conclusively:

• tax evasion, if the perpetrator, as a member of a gang that has joined forces for the continued commission of tax evasion, evades sales or excise taxes or obtains unjustified sales or excise tax advantages (sales tax carousels),
• commercial, forcible and gang smuggling in accordance with Section 373, and
• tax evasion in the case of Section 374(2).

Admissibility of the search of third parties (in particular tax advisors)

The search of third parties is governed by Section 103 of the Code of Criminal Procedure. According to this, the search is only permissible if facts exist from which it can be concluded that the trace of a criminal act or a certain object is located in the rooms to be searched. The objects of evidence must be specifically designated in the written search order. The mere assumption that the tax advisor has copies or originals of all tax-relevant documents of his client is not sufficient (see Durst, PStR 2012, 146, 148; Rund, AO-StB 2004, 451, 452).

In the event of a search ordered orally due to imminent danger, the tax advisor must insist that the investigating authority describe in detail the reasons for the existence of the danger and the evidence sought. For this purpose, a written note must be made for the purpose of evidence in the case of legal remedies with the aim of a prohibition of utilization.

Despite the wording of Section 103 of the Code of Criminal Procedure ("...in the rooms to be searched..."), according to prevailing opinion, other objects within the meaning of Section 102 of the Code of Criminal Procedure may also be searched, as well as the person of the third party who is being searched (body search).

Execution of the search

The person affected by the search has a right to be present during the measure. However, Section 164 of the Code of Criminal Procedure applies, according to which persons who interfere with the performance of official acts may be arrested. Actions that endanger the purpose of the search may be prevented. In any case, however, the person concerned must be allowed to inform his lawyer or tax advisor of the search. The latter is also entitled to be present during the measure. The officers should be asked to wait for the advisor to arrive before beginning the search, but there is no right to do so.

The search is only permitted in exceptional cases at night time. However, this is of limited value, because according to Section 104 (3) of the Code of Criminal Procedure, night time in the period from April 1 to September 30 includes the hours from nine o'clock in the evening to four o'clock in the morning, and in the period from October 1 to May 31 includes the hours from nine o'clock in the evening to six o'clock in the morning. However, the investigating authorities like to appear regularly at the times when the person's surroundings or his business or practice clearly notice the search.

At the beginning of the search, the officers' badges and, in particular, the search warrant should be inspected. The first thing to check is the date of the warrant, because after six months have passed, the warrant loses its justification (BVerfG NJW 1997, 2165). Incidentally, this time limit must also apply to the duration of the search itself (cf. Quedenfeld/Füllsack, Verteidigung in Steuerstrafsachen, 4th ed., marginal no. 711 with further references). This is relevant in large-scale proceedings in which the presence of the investigators can last for months. A search warrant also loses its effectiveness if a search has already taken place on its basis or the person concerned has voluntarily permitted the search. This also has significance for a criminalistic trick that can sometimes be observed: the officers leave after a relatively unsuccessful search, only to return after a short time in the hope that the person concerned, under the impression of the measure that has just taken place, will sort out or remove the documents that have not been found. Since the warrant has been "consumed" by the previous search, the results of such measures are subject to a prohibition on exploitation (Quedenfeld/Füllsack, Verteidigung in Steuerstrafsachen, 4th ed., marginal no. 744).

A copy of the search warrant should be made and the personal details of the officers should be recorded; it is best to have their business cards handed over.

The criminal defense must begin at the latest at the moment of the appearance of the search officers. The tax investigation is not a company audit, the methods of the investigators are those of the police: The person concerned is taken by surprise and at the same time attempts are made to play down the criminal risk in order to induce the suspect to make a statement. Both the taxpayer and his or her advisor must remain consistently silent here, because any statement can cut off defense options.

The cooperation with the tax investigation should be limited to the submission of requested documents, but in no case should they be voluntarily surrendered. In the protocol, the box for objection to detention must be checked. Care should be taken to ensure that the list of items seized is as specific as possible and that it is known where the items will be taken. If loose documents are seized, each must be individually designated in the protocol. Under no circumstances is the description: "A file cover with various documents" sufficient. The request for the exact designation of the documents will meet with little enthusiasm with the officials, since this takes up possibly much time. If the officers refuse, the decision of the competent investigating judge must be obtained by telephone in accordance with Section 98 (2) of the Code of Criminal Procedure.

The presentation of the documents sought has the advantage that the purpose of the search is settled and a further search thus becomes inadmissible. This also prevents so-called chance finds within the meaning of Section 108 of the Code of Criminal Procedure from being made.

Review of the found papers

According to § 404 S. 2 AO, the tax investigation/customs investigation has the authority to look through the papers found (this also includes photos, films, sound carriers, hard drives, etc.). This becomes problematic in the case of a search at the tax advisor's/lawyer's office with regard to his hand files. Pursuant to Section 97 of the Code of Criminal Procedure, records of the non-suspicious holder of professional secrets to which his right to refuse to testify pursuant to Section 53 of the Code of Criminal Procedure extends are not subject to seizure and may not be searched. This includes in particular the correspondence of the consultant with the suspect. In detail, the seizure privilege with regard to the client's accounting documents and tax returns is hotly disputed.

The investigating authorities claim to check whether § 97 of the Code of Criminal Procedure (StPO) is relevant at all by reviewing the documents. Therefore, an attempt must be made to have the seized papers sealed so that they can be submitted to the investigating judge for review and decision. Under no circumstances may the documents be surrendered voluntarily. Otherwise, the consultant runs the risk of violating the confidentiality requirement under Section 57 (1) StBerG and of becoming liable to prosecution under Section 203 StGB for the violation of private secrets. The seizure should always be objected to.

Seizure

Pursuant to Section 94 (1) of the Code of Criminal Procedure, items may be seized that may be of significance as evidence for the investigation. Documents in the tax advisor's custody, which are in principle subject to the prohibition of seizure under Section 97 of the Code of Criminal Procedure, may be seized, among other things, if the suspicion of tax evasion also extends to the tax advisor (Section 97 (2) sentence 3 of the Code of Criminal Procedure). This also applies if the tax advisor or defense counsel is suspected of favoring or obstructing justice in favor of the client. Accordingly, it happens that the prosecuting authority and the court extend the suspicion to the tax advisor. If the suspicion is later removed, the information from the file etc. may nevertheless continue to be used against the client. The Federal Court of Justice has rejected a prohibition of use to this extent (Federal Court of Justice, judgment of 20.10.1982 - 2 StR 43/82 = NStZ 1983, 85).

In the event of seizure, it must be clarified whether and to what extent copies of the seized documents and data can be made. As a matter of principle, an appeal against the search and seizure should be filed and the appeal repeated in writing. This applies at least to the tax advisor who has been searched, so as not to expose himself to the accusation of having violated the client's interests by cooperating too hastily (cf. Durst, PStR 2012, 146, 149; Rund, AO-StB 2004, 451, 452). Documents and objects which, in the opinion of the person concerned, are subject to Section 97 of the Code of Criminal Procedure must be sealed. Under certain circumstances, however, it may be more favorable not to appeal against the measures taken by the investigating authorities (see Quedenfeld/Füllsack-Quedenfeld, Verteidigung in Steuerstrafsachen, 4th ed., marginal no. 745 et seq.).

Legal remedies

As long as the search continues, the revocation of the search warrant may be pursued by means of an appeal pursuant to Section 304 of the Code of Criminal Procedure. After the search has ended, the appeal is admissible with the aim of establishing the illegality of the measure.

Search orders issued by the police or public prosecutor's office due to imminent danger may be appealed by analogy pursuant to Section 98 (2) of the Code of Criminal Procedure. An appeal against the decision is admissible pursuant to Section 304 of the Code of Criminal Procedure.

An application for a court decision against the manner of the search is also admissible after the end of the measure in accordance with Section 98 (2) of the Code of Criminal Procedure by analogy. Here, too, an appeal against the decision is generally admissible.