I guess this depends on the country, it sounds an unfortunate situation but in my country the taxman can command the army in collection of taxes. They dont need a search warrant, nothing they just walk in and take everything. Every other part of the law requires due process but the tax man he serves only the government. I hope you live in a democratic country so you have some recourse but some of the most harsh laws are in favour of tax because they give government money to run.
I always mention Irwin Schiff because he should never be forgotten. He died chained to a hospital bed while suffering late term cancer and blindness in one eye. His crime was to write a book which USA government banned throughout the land. One of two books to ever be banned from sale in every state of the USA. The book was about how Federal taxes are illegal, about a century ago USA started income taxes and the Federal reserve. 90% of the dollar value has been lost since then and they are over 20 trillion in debt and its looking worse unfortunately.
These things are relevant to crypto because dollar decline is inverse to BTC and crypto overall. Forget the tax, I suggest pay it but inflation also is a tax and you cannot avoid this except through alot of effort and perhaps crypto use