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					Internal Revenue Manual - 9. Criminal Investigation

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9.1 Criminal Investigation Mission and Strategies r 9.1.1 Mission r 9.1.2 Authority r 9.1.3 Criminal Statutory Provisions and Common Law r 9.1.3 Criminal Statutory Provisions and Common Law (Cont. 1) r 9.1.4 Criminal Investigation Directives 9.2 Skills and Training r 9.2.1 Training r 9.2.2 Physical Fitness Program r 9.2.3 Use of Force Procedures 9.3 Disclosure and Publicity r 9.3.1 Disclosure r 9.3.1 Disclosure (Cont. 1) r 9.3.2 PUBLICITY AND INTERNAL COMMUNICATIONS 9.4 Investigative Techniques r 9.4.1 Investigation Initiation r 9.4.2 SOURCES OF INFORMATION r 9.4.2 SOURCES OF INFORMATION (Cont. 1) r 9.4.4 Requests for Information r 9.4.4 Requests for Information (Cont. 1) r 9.4.4 Requests for Information (Cont. 2) r 9.4.5 Interviews r 9.4.5 Interviews (Cont. 1) r 9.4.6 Surveillance and Non-Consensual Monitoring r 9.4.7 CONSENSUAL MONITORING r 9.4.8 Undercover Operations r 9.4.9 Search Warrants, Evidence and Chain of Custody r 9.4.11 Investigative Services r 9.4.11 Investigative Services (Cont. 1) r 9.4.12 Arrests r 9.4.13 FINANCIAL INVESTIGATIVE TASK FORCE 9.5 Investigate Process r 9.5.1 Administrative Investigations and General Investigative Procedures r 9.5.2 Grand Jury Investigations r 9.5.3 Criminal Investigation Strategies r 9.5.3 Criminal Investigation Strategies (Cont. 1) r 9.5.5 Money Laundering and Currency Crimes r 9.5.5 Money Laundering and Currency Crimes (Cont. 1)

Internal Revenue Manual - 9. Criminal Investigation

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9.5.6 Organized Crime & Strike Force r 9.5.7 NARCOTIC INVESTIGATIONS r 9.5.8 Investigative Reports r 9.5.9 Methods of Proof r 9.5.9 Methods of Proof (Cont. 1) r 9.5.11 Other Investigations r 9.5.11 Other Investigations (Cont. 1) r 9.5.12 Processing Completed Criminal Investigation Reports r 9.5.13 Civil Considerations r 9.5.14 Closing Procedures Trial and Court Related Activities r 9.6.2 Plea Agreements and Sentencing Process r 9.6.3 Pre-Trial Procedures r 9.6.4 Trial r 9.6.4 Trial (Cont. 1) Asset Seizure and Forfeiture r 9.7.1 Roles, Responsibilities, and Authorities r 9.7.2 Civil Seizure and Forfeiture r 9.7.3 Criminal Forfeiture r 9.7.4 PRE-SEIZURE PLANNING r 9.7.5 Forms, Processing, and Documentation r 9.7.6 Custody and Storage of Seized Assets r 9.7.6 Custody and Storage of Seized Assets (Cont. 1) r 9.7.7 Claims And Petitions r 9.7.8 Disposition of Seized and Forfeited Property r 9.7.9 Equitable Sharing and Reverse Asset Sharing r 9.7.10 International Seizures and Forfeitures r 9.7.11 Abandoned Property r 9.7.12 Evidence Seizures r 9.7.13 Title 26 Seizures for Forfeiture Criminal Investigation Fraud Detection Center r 9.8.1 Fraud Detection Center Criminal Investigation Management Information System (CIMIS) r 9.9.1 Employee Criminal Investigation Management Information System Responsibilities and Procedures r 9.9.2 Criminal Investigation Management Information System Security and Setup r 9.9.4 Criminal Investigation Management Information System Data Fields r 9.9.4 Criminal Investigation Management Information System Data Fields (Cont. 1) r 9.9.13 Form 5043, Criminal Investigation Monthly Activity Report
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Internal Revenue Manual - 9. Criminal Investigation
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9.10 Administrative Databases and Software r 9.10.1 CRIMINAL INVESTIGATION EQUIPMENT CONTROL SYSTEM 9.11 Fiscal and Personnel Matters r 9.11.1 Fiscal and Budgetary Matters r 9.11.2 Domestic and Foreign Travel r 9.11.3 Investigative Property r 9.11.4 Personnel Matters r 9.11.4 Personnel Matters (Cont. 1) 9.12 Administrative and Recordkeeping Matters r 9.12.1 Miscellaneous Administrative Procedures

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Internal Revenue Manual - 9.1.1 Mission

Chapter 1. Criminal Investigation Mission and Strategies Section 1. Mission

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9.1.1.1 9.1.1.2 9.1.1.3 9.1.1.4

Overview Criminal Investigation's Mission Criminal Investigation Strategies Law Enforcement Criteria

9.1.1.1 (05-30-2008) Overview
1. This section provides the following information:
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Criminal Investigation's (CI) Mission Criminal Investigation Strategies Law Enforcement Criteria

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9.1.1.2 (11-04-2004) Criminal Investigation's Mission
1. Criminal Investigation serves the American public by investigating potential criminal violations of the Internal Revenue Code (IRC) and related financial crimes in a manner that fosters confidence in the tax system and compliance with the law.

9.1.1.3 (11-04-2004) Criminal Investigation Strategies
1. The CI strategies are:

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A. Compliance B. Money Laundering C. International D. Terrorism

9.1.1.3.1 (11-04-2004) Compliance Strategy
1. Criminal Investigation’s strategic objectives are based upon the overall IRS multi-year strategic plan. 2. Criminal Investigation’s strategic objectives, operational priorities, and improvement projects are outlined in CI’s Strategy and Program Plan (SPP). The SPP establishes the focus and commitment of CI resources. The SPP also summarizes program information, including budget activities, initiatives, and CI measure and workload indicators. 3. The Annual Business Plan (ABP) is issued annually by the Chief, CI. The ABP establishes strategies and operational priorities based on CI’s SPP. Criminal Investigation’s compliance strategy establishes program focus and commitment of CI’s resources. The ABP addresses the yearly program direction and commitment of CI resources.

9.1.1.3.1.1 (11-04-2004) Program Direction
1. In support of the IRS' strategic plan, CI will focus its investigative resources into three program areas: A. legal source income B. illegal source income C. narcotics

9.1.1.3.1.1.1 (11-04-2004) Legal Source Income Program

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1. The legal source income program addresses income tax investigations involving: A. legal occupations and industries B. Title 26 charges C. Title 18 USC §286, 18 USC §287, and 18 USC §371 (Klein conspiracy) charges 2. In the legal source income program, CI is the sole investigating agency.

9.1.1.3.1.1.2 (05-30-2008) Illegal Source Income Program
1. The illegal source income program addresses investigations of illegal source financial crimes involving: A. Illegal occupations and industries B. Title 26 charges C. Title 18 charges D. Title 18 USC §371 (Klein and non-narcotic) money laundering conspiracy E. Title 18 USC §1956 and 18 USC §1957 (non-narcotic) money laundering F. Title 31 currency charges 2. In the illegal source income program, the investigation may be conducted in conjunction with another agency.

9.1.1.3.1.1.3 (11-04-2004) Narcotics Program
1. The narcotics program involves the investigation of leaders and other top echelon members of high-level drug trafficking organizations and their orchestration of financial activities directing the transportation, distribution, and laundering of illegal drug proceeds. 2. Within the narcotics program, there are four sub-programs:

Internal Revenue Manual - 9.1.1 Mission

A. Organized Crime Drug Enforcement Task Force (OCDETF) — investigations involving members of high-level drug trafficking organizations authorized by a regional multiagency OCDETF committee. B. High Intensity Drug Trafficking Area (HIDTA) — a co-located, multi-agency task force conducting investigations involving organizations or individuals involved in narcotics trafficking or narcotics money laundering. The task force works through the HIDTA program of the Office of National Drug Control Policy (ONDCP). C. HIDTA/OCDETF — investigations worked jointly through OCDETF. D. Narcotics Other — investigations involving financial activities of significant individuals or entities who direct the transportation, distribution, and laundering of illegal drug proceeds.

9.1.1.3.2 (11-04-2004) Money Laundering Strategy
1. The money laundering strategy is to identify and prosecute the most significant tax, currency, and money laundering offenders and to pursue the assets of those offenders both domestically and internationally. This strategy is designed to assure enforcement of the Bank Secrecy Act (BSA) and related Federal money laundering statutes in support of the Department of Justice and Treasury National Money Laundering Strategy (NMLS).

9.1.1.3.3 (05-30-2008) International Strategy
1. The international strategy calls for assignment of special agents as attachés to strategic foreign posts in order to facilitate the development and use of information obtained in host foreign nations or from other foreign sources. The attachés use the information to support large-scale, international investigations, combat terrorist financing, and apprehend overseas fugitives. The attachés facilitate international financial investigative training and respond to requests for assistance from foreign countries.

9.1.1.3.4 (11-04-2004) Terrorism Strategy
1. Federal law enforcement agencies have been mobilized to fight terrorism. In support of this national effort, CI will provide financial investigative assistance in terrorism matters and devote resources in support of terrorist task force initiatives to disrupt and dismantle terrorism financing operations.

Internal Revenue Manual - 9.1.1 Mission

9.1.1.4 (05-30-2008) Law Enforcement Criteria
1. Investigations will be identified, initiated, and conducted in a manner that fosters confidence in the tax system and compliance with the law. The investigations must identify individuals and organizations that meet the compliance strategy as detailed in the ABP. In determining if an investigation meets the definition of CI's mission, the following should be considered: A. high profile B. egregious allegations C. deterrent effect D. conformity with ABP 2. Additional criteria and deviation procedures are detailed in Law Enforcement Manual (LEM) 9.14.1, CI Official Use Only Procedures. 3. Racial profiling will not be utilized as a criteria in investigation selection or in making investigative decisions. In June 2003, the US Assistant Attorney General for Civil Rights issued guidance regarding the use of race by Federal law enforcement officers.

9.1.1.4.1 (11-04-2004) Racial Profiling
1. "Racial profiling" at its core concerns the invidious use of race or ethnicity as a criterion in conducting stops, searches, and other law enforcement investigative procedures. It is premised on the erroneous assumption that any particular individual of one race or ethnicity is more likely to engage in misconduct than any particular individual of another race or ethnicity. The US Assistant Attorney General for Civil Rights guidance is outlined below: 2. Traditional Law Enforcement Activities. Two standards in combination should guide use by Federal law enforcement authorities of race or ethnicity in law enforcement activities: A. In making routine or spontaneous law enforcement decisions, such as ordinary traffic stops, Federal law enforcement officers may not use race or ethnicity to any degree, except that officers may rely on race and ethnicity in a specific suspect description. This prohibition applies even where the use of race or ethnicity might otherwise be lawful.

Internal Revenue Manual - 9.1.1 Mission

B. In conducting activities in connection with a specific investigation, Federal law enforcement officers may consider race and ethnicity only to the extent that there is trustworthy information relevant to the locality or time frame that links persons of a particular race or ethnicity to an identified criminal incident, scheme, or organization. This standard applies even where the use of race or ethnicity might otherwise be lawful. 3. National Security and Border Integrity. The above standards do not affect current Federal policy with respect to law enforcement activities and other efforts to defend and safeguard against threats to national security or the integrity of the Nation's borders, to which the following applies: A. In investigating or preventing threats to national security or other catastrophic events (including the performance of duties related to air transportation security), or in enforcing laws protecting the integrity of the Nation's borders, Federal law enforcement officers may not consider race or ethnicity except to the extent permitted by the Constitution and laws of the United States.

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Internal Revenue Manual - 9.1.2 Authority

Chapter 1. Criminal Investigation Mission and Strategies Section 2. Authority

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9.1.2.1 9.1.2.2 9.1.2.3 9.1.2.4 9.1.2.5 9.1.2.6 9.1.2.7 9.1.2.8 9.1.2.9

Overview General Authority to Enforce Internal Revenue Laws and Related Statutes Authority for Certain Investigative Techniques Authority to Arrest Authority to Compromise a Tax Investigation Authority to Settle Criminal Cases Authority to Seize Property for Forfeiture Criminal Referral Authority Conflict of Laws

9.1.2.1 (01-16-2008) Overview
1. The authority to enforce Federal laws is derived from a variety of statutes. These statutes may assign the enforcement of any given law to a particular department such as the Treasury Department, an agency of a department such as the Internal Revenue Service (IRS), or simply that the enforcement falls to the legal arm of the government, the Department of Justice (DOJ). 2. The various departments of the government then further delegate the authority to enforce the laws through Orders and Directives issued to agencies. The agencies then issue Delegation Orders (or Rules) to specific functions and sometimes even specific positions of employment within the agency itself. 3. This section discusses the more common delegated authorities.

9.1.2.2 (01-16-2008) General Authority to Enforce Internal Revenue Laws and Related

Internal Revenue Manual - 9.1.2 Authority

Statutes
1. Title 26 United States Code (USC) §7608(b) provides the initial authority for investigating crimes arising under the Internal Revenue laws. 2. Pursuant to 26 USC §7602, 26 USC §7622, and Treasury Order 150–10, the Commissioner and his/her designated officers and employees are authorized to examine any books, papers, records, or memoranda bearing upon the matters required to be included in the returns, to summon persons liable for tax and take his/her testimony, and to administer oaths. 3. The IRS also has explicit enforcement responsibilities with regard to 18 USC §1956 and 18 USC §1957, dealing with money laundering, and 31 USC §5311 et seq., dealing with the Bank Secrecy Act (BSA). Pursuant to Treasury Directive 15-42 (January 21, 2002), the Commissioner, IRS has been delegated: A. Investigatory authority over violations of 18 USC §1956 and 18 USC §1957 where the underlying conduct is subject to investigation under Title 26 or under the BSA as amended (i.e., 31 USC §5311, et seq. (other than violations of 31 USC §5316)); B. Seizure and forfeiture authority over violations of 18 USC §981 and 31 USC §5317, relating to violations of 31 USC §5313 and 31 USC §5324, and 18 USC §1956 and 18 USC §1957 which are within the investigatory jurisdiction of IRS (as set forth in the previous paragraph); and C. Seizure authority relating to any other violation of 18 USC §1956 or 18 USC §1957 if the bureau with investigatory authority is not present to make the seizure.

Note:
Property seized under 18 USC §981 where investigatory jurisdiction is solely with another bureau whose representatives are not present at the time of the seizure, shall be turned over to that bureau. 4. By commissions given each officer of Criminal Investigation (CI), the Commissioner designates such individuals as having the authority to perform all duties conferred upon such officers, under all laws and regulations administered by the IRS, including the authority to investigate, require, and receive information related to the aforementioned laws and regulations. Servicewide Delegation Order 9-2 (formerly DO 158) authorizes the Special Agent in Charge (SAC) to investigate violations of 18 USC §1956 and 18 USC §1957 where the underlying conduct is subject to investigation under Title 26 or the BSA (i.e., 31 USC §5311 et seq. (other than violations of 31 USC §5316)). See DO 9-2 in IRM 1.2.48, Servicewide Policies and Authorities -

Internal Revenue Manual - 9.1.2 Authority

Delegation of Authority for Criminal Investigation Activities. 5. In Servicewide Delegation Order No. 143, the Commissioner delegated the authority to initiate criminal investigations of financial institutions that are not currently examined by Federal bank supervisory agencies, except for brokers or dealers in securities, to the Deputy Director, Operations Policy and Support (CI:OPS) and SACs. The Commissioner also delegated the authority to initiate Title 31 criminal investigations of banks and brokers or dealers in securities to the Chief, CI. The Commissioner's authority for Delegation Order No. 143 is derived from Treasury Directive 15–41 (December 1, 1991). See DO 143 in IRM 1.2.25, Servicewide Policies and Authorities - Delegations of Authority for Special Topics Activities. 6. Under the Commissioner, CI's responsibilities include the investigation of all alleged criminal violations arising under the Internal Revenue laws and related criminal statutes. See IRM 9.1.3, Criminal Statutory Provisions and Common Law, for a discussion of the statutes under CI jurisdiction.

9.1.2.3 (09-07-2001) Authority for Certain Investigative Techniques
1. The following authority is granted to special agents in performance of their duties.

9.1.2.3.1 (01-16-2008) Authority to Interview
1. Title 26 USC §7602 authorizes the Secretary of the Treasury or his delegate to examine books and records, and to take testimony under oath. This authority was delegated to the Commissioner under Treasury Order 150-10 and 26 CFR 7602-1 through 26 CFR 7605-1. The Commissioner has delegated that authority to other IRS employees via Servicewide Delegation Order No. 4 (Rev. 23), Summonses, Oaths, Certifications, and Related Functions. 2. Delegation Order No. 4 authorizes special agents to issue and serve summonses, examine books and records, question witnesses, and take testimony under oath.

9.1.2.3.2 (01-16-2008) Authority to Issue a Summons, Examine Records, and Take Testimony
1. The authority granted to the Secretary or his/her delegate by 26 USC §7602 to issue a summons, examine records, and take testimony is granted to the Commissioner of Internal Revenue by Treasury Order 150–10 and 26 CFR §7602–1 through 26 CFR §7605–1. The Commissioner has

Internal Revenue Manual - 9.1.2 Authority

delegated that authority to other IRS employees in Delegation Order No. 4. Detailed information about the summons and instructions for its preparation is found in IRM 25.5, Summons Handbook. 2. Field offices will designate CI as the issuing compliance function on Form 2039, Summons "Internal Revenue Service (Division)" line. 3. The provisions of the law relating to the use and enforcement of a summons are contained in the following sections of Title 26: A. 26 USC §7602 - Examination of Books and Witnesses B. 26 USC §7603 - Service of Summons C. 26 USC §7604 - Enforcement of Summons D. 26 USC §7605 - Time and Place of Examination E. 26 USC §7609 - Special Procedures for Third-Party Summonses F. 26 USC §7610 - Fees and Costs for Witnesses G. 26 USC §7622 - Authority to Administer Oaths and Certify H. 26 USC §7402 - Jurisdiction of District Courts I. 26 USC §7210 - Failure to Obey Summons J. 26 USC §6420(e)(2), 26 USC §6421(f)(2), 26 USC §6424(d)(2), and 26 USC §6427(g)(2) (gasoline, lubricating oil, and fuel credits) 4. Pursuant to 26 USC §7610, payments may be made to third parties who request reimbursement for costs incurred in complying with a summons. Under 26 USC §7801 payments may be made to third parties without the issuance of a summons for records needed in an investigation when the records are available to the general public. 5. Delegation Order No. 178 delegates the authority to use appropriated funds to pay search costs, reproduction costs, and transportation costs, incurred while complying with a third-party summons, to the Chief, CI. In CI Delegation Order No. 4, the Chief has redelegated this authority to the Supervisory Special Agent (SSA) - $2,500; SAC - $10,000; and Director, Field Operations over $10,000.

Internal Revenue Manual - 9.1.2 Authority

9.1.2.3.3 (11-10-2004) Authority to Take Handwriting Exemplars
1. Whenever an agent becomes aware that the authenticity or origin of a document may be in question, he/she should attempt to obtain handwriting exemplars of the parties involved. An agent's authority to summons a taxpayer or other witness for the purpose of taking handwriting exemplars is provided by 26 USC §7602. This authority does not violate any Constitutional rights or policies enunciated by Congress. Compulsion of handwriting exemplars is neither a search nor seizure subject to Fourth Amendment protections nor testimonial evidence protected by the Fifth Amendment privilege against self-incrimination. A handwriting exemplar is an identifying physical characteristic.

9.1.2.3.4 (01-16-2008) Authority for Searches with Warrants
1. The basic authority for conducting searches and making seizures is found in the Fourth Amendment to the Constitution of the United States which states: "the right of the people to be secure in their persons, houses, papers, and effects against unreasonable searches and seizures shall not be violated, and no warrants shall issue, but upon probable cause, supported by oath or affirmation, and particularly describing the place to be searched and the persons or things to be seized." The Fourth Amendment protects individuals against unreasonable searches and seizures by the government. The scope of this protection extends to any area in which an individual has a reasonable expectation of privacy. Further, the Fourth Amendment provides that all warrants shall be based upon probable cause and supported by oath or affirmation. 2. Title 26 USC §7302 provides that it shall be unlawful to have or to possess any property used, or intended for use, in violating the provisions of the Internal Revenue laws, or regulations prescribed under such laws, and that no property rights shall exist in any such property. 3. Title 26 USC §7608, authorizes special agents to serve search warrants and seize personal property subject to forfeiture. 4. A search warrant may be issued pursuant to 18 USC Chapter 205, and the Federal Rules of Criminal Procedure (Fed. R. Crim. P.), for the search of the personal property used, or intended for use, in violation of the Internal Revenue laws or regulations. 5. Title 18 USC §3105; 18 USC §3109; Fed. R. Crim. P. R 41; 26 USC §7302; 26 USC §7321; and 26 USC §7608 provide the statutory authority for searches and seizures conducted by special agents. Pertinent parts of Rule 41 provide for warrants to be issued by a Federal judge or magistrate upon the affidavit of a law enforcement officer. A warrant issued under this rule may provide for the search and seizure of any of the following:

Internal Revenue Manual - 9.1.2 Authority

A. property that constitutes evidence of the commission of a criminal offense B. contraband, the fruits of crime, or things otherwise criminally possessed C. property designed or intended for use or which is or has been used as the means of committing a criminal offense D. person for whose arrest there is probable cause, or who is lawfully restrained The phrase, Federal law enforcement officer, as used in this Rule, refers to any government agent, other than an attorney for the government as defined in Fed. R. Crim. P. R54(c), who is engaged in the enforcement of the criminal laws and is within any category of officers authorized by the Attorney General to request the issuance of a search warrant. 6. For more information concerning search authority and procedure see IRM 9.4.9, Search Warrants, Evidence, and Chain of Custody.

9.1.2.3.5 (01-16-2008) Authority for Warrantless Searches
1. Searches can be made without a warrant so long as the consent of the property owner is obtained first or the search is incident to a lawful arrest. 2. A search without a warrant may be made with the consent of the person who has the right to give such consent. The consent must be voluntarily given and not the result of any undue influence or duress. Any coercion will invalidate the search and seizure. The courts have held that only persons whose constitutional rights have been violated will be heard in objection to the search. The rights guaranteed are personal and may be waived only by the person having the right of immediate possession. One person may not waive such rights for another unless the person so waiving has authorized possession of the premises. 3. A person lawfully arrested may be searched without a warrant and the premises under his/her immediate custody and control may be searched for weapons. 4. For more information concerning search authority and procedure, see IRM 9.4.9, Search Warrants, Evidence and Chain of Custody.

9.1.2.4 (01-16-2008)

Internal Revenue Manual - 9.1.2 Authority

Authority to Arrest
1. The authority of special agents to make arrests is provided by 26 USC §7608. This section provides, in part, that a special agent is authorized: to execute and serve search warrants and arrest warrants; to serve subpoenas and summonses issued under authority of the United States; to make arrests without warrant for any offense against the United States relating to the Internal Revenue laws that is committed in his/her presence, or for any felony cognizable under such laws if he/she has reasonable grounds to believe that the person to be arrested has committed or is committing any such felony; and to make seizures of property subject to forfeiture under the Internal Revenue laws. 2. The Supreme Court has stated that, in the absence of a controlling Federal statute, the law of arrest of the state where the arrest is made is controlling. In the absence of a statute authorizing a federal officer to make an arrest without a warrant, that officer has the same powers of arrest as a private citizen. A special agent’s power to make an arrest without a warrant as a private citizen, when valid under state law, is not made invalid because the crime is outside the scope of the Internal Revenue laws. An arrest without a warrant is a serious matter and could subject the person making the arrest to criminal and civil liability for false imprisonment or false arrest. Therefore, in order for a special agent to be authorized to make a warrantless arrest (as a private citizen), it is generally necessary that a violation constituting a felony be committed in his/her presence or he/she must reasonably believe that the person whom he/she arrests has committed a felony. 3. Every state has its own requirements in granting Federal law enforcement officers state peace officer status. Even if peace officer status is recognized by your state, check with counsel before taking any position as a recognized peace officer.

9.1.2.4.1 (11-10-2004) Authority To Carry Firearms
1. There is no specific statutory authority for special agents to carry firearms. The General Counsel, Department of the Treasury, has concluded that no specific authority is necessary because " where a Federal officer has authority to make an arrest, he/she has implied authority to carry firearms" . Authority for special agents to make arrests is contained in 26 USC §7608(b). 2. The authority to carry firearms is limited to the conduct of official duties in enforcing any of the criminal provisions of the Internal Revenue laws or other criminal provisions of laws relating to the Internal Revenue where the enforcement is the responsibility of the Secretary or his/her delegate. 3. Authority to carry or use privately owned weapons during off-duty hours, as a private citizen, is

Internal Revenue Manual - 9.1.2 Authority

subject to local civil and criminal restrictions. Special agents may not use their position or credentials to qualify under state or local laws to purchase, license, carry, or use private weapons. Credentials may be displayed as occupational identification, upon request, but not to influence any decision a state or local law enforcement officer may make concerning the special agent’s ability to carry a concealed weapon.

9.1.2.5 (11-10-2004) Authority to Compromise a Tax Investigation
1. The Secretary of the Treasury or the Secretary’s delegate may compromise any civil or criminal tax case prior to referral to the DOJ (26 USC §7122(a)). The Secretary has delegated this authority to the Commissioner of Internal Revenue (203 CFR §601). Strict compliance with the statutory provisions is required to effect a compromise. Accordingly, an attempted settlement by subordinate IRS officials will not bar criminal prosecution. A valid compromise is as complete a discharge from prosecution as an acquittal by a jury. 2. Criminal Investigation pursues offers in compromise in investigations in which criminal proceedings are pending only if specifically requested by Counsel. 3. After referral of an investigation to the DOJ, authority to compromise rests with the Attorney General. 4. Tender of tax or the actual payment thereof, prior to a verdict or plea of guilty, is not a bar to criminal prosecution.

9.1.2.6 (11-10-2004) Authority to Settle Criminal Cases
1. When a taxpayer, represented by counsel, expresses a desire to negotiate an expedited plea agreement prior to the formal completion of an administrative investigation, the special agent will advise taxpayer’s counsel (see IRM 9.6.2, Plea Agreements and Sentencing Process for detailed information on the expedited plea program): A. The IRS does not have the authority to engage in plea negotiations, because this authority rests exclusively with the DOJ. B. Plea negotiations have to be conducted by either the United States Attorney’s office or the DOJ, Tax Division.

9.1.2.7 (11-10-2004)

Internal Revenue Manual - 9.1.2 Authority

Authority to Seize Property for Forfeiture
1. The authority to seize assets for forfeiture comes from the Internal Revenue Code (Title 26 of the USC) and Title 18 and 31 of the USC. For more information concerning seizure authority and procedure, see IRM 9.7, Asset Seizure and Forfeiture.

9.1.2.7.1 (01-16-2008) Title 26 Seizures
1. Title 26 USC §7608, authorizes special agents to serve search warrants and seize personal property subject to forfeiture. 2. Title 26 USC §7302 provides that it shall be unlawful to have or possess any property which is used, or intended for use, in violation of the Internal Revenue laws or regulations prescribed under such laws. Title 26 USC §7301 provides the Secretary or the Secretary’s delegate is authorized to seize such property per 26 USC §7321. It further provides that no property rights shall exist in any such property, and that a search warrant may be issued as provided in 18 USC Chapter 205 and the Fed. R. Crim. P., for the seizure of such property. 3. A search warrant may be issued for the seizure of property used or intended to be used in violation of the Internal Revenue laws. (Fed. R. Crim. P. R41(b)). A seizure in violation of the Fourth Amendment will not sustain a forfeiture, unless the property seized is contraband per se. 4. Servicewide Delegation Order 9-1 (formerly DO 157) authorizes special agents to seize personal property for forfeiture to the United States when such property was used or intended to be used in violation of those Internal Revenue laws other than Chapters 51, 52 and 53 of the Internal Revenue Code.

9.1.2.7.2 (11-10-2004) Title 18 Seizures
1. Title 18 USC §981(e) vests civil seizure and forfeiture authority in the Secretary of the Treasury relating to violations of: A. 18 USC §1956 (within the investigatory jurisdiction of IRS) B. 18 USC §1957 (within the investigatory jurisdiction of IRS) C. 18 USC §1960 (within the investigatory jurisdiction of IRS)

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2. The Secretary of the Treasury, through Treasury Order 101-05 (May 17, 2002), delegated the authority to the Under Secretary (Enforcement). Treasury Directive 15-42 (January 21, 2002) redelegated this authority to the Commissioner of IRS. The Commissioner issued Servicewide Delegation Order 9-2 (formerly DO 158) specifying various activities in the civil seizure/forfeiture process delegated to different IRS officials. 3. The criminal forfeiture procedures found in Title 18, as they relate to the IRS, are governed by four statutory authorities. Three of these authorities are incorporated into the money laundering criminal forfeiture statute by reference, while the fourth is a consequence of the fact that criminal processes are governed by the Fed. R. Crim. P. These statutory authorities are as follows: A. 18 USC §982(b) which states that the provisions of 21 USC §853(c) and (e) through (p) shall govern the seizure and disposition of any property subject to forfeiture under 18 USC §982. B. 21 USC §853(e)(1) provides for a temporary restraining order prior to the conclusion of a criminal investigation to preserve the availability of the property for forfeiture by restraining transfer of the property or further encumbrances. C. 21 USC §853(f) provides for the use of a seizure warrant for property subject to forfeiture under 18 USC §982 and §853(f). D. Pursuant to 21 USC §853(j), and by reference in 21 USC §881(d), civil forfeiture proceeds according to the Supplemental Rules of Certain Admiralty or Maritime Claims and Asset Forfeiture (Civil Judicial Forfeiture Procedures, 19 USC §1602 et seq.) (Civil Administrative Forfeiture Procedures). E. In addition, because criminal forfeiture is an integral part of the underlying criminal prosecution, the Fed. R. Crim. P. govern the general process by which property is criminally forfeited.

9.1.2.8 (01-16-2008) Criminal Referral Authority
1. Treasury Order 150-35 (July 10, 2000) delegates criminal referral authority to the Commissioner and to Treasury General Counsel. A. The Commissioner has the authority to refer all criminal matters within the jurisdiction of the IRS to the Department of Justice for grand jury investigation, criminal prosecution, or other criminal enforcement action requiring court order or DOJ approval.

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B. Treasury General Counsel has exclusive authority to make referrals in criminal matters for judicial enforcement of summonses and to determine which court decisions of a criminal tax matter should be appealed. He/she has concurrent authority with the Commissioner to refer a criminal matter to DOJ for pre-referral advice. This authority has been redelegated to Chief Counsel by General Counsel Order No. 4. 2. Servicewide Delegation Order 9-6 (formerly DO 263) delegates the Commissioner's criminal referral authority to the Chief, CI. 3. Criminal Investigation Delegation Order No. 3 (Rev. 1) redelegates criminal referral authority from the Chief, CI, to Headquarters and field executives and managers under certain defined circumstances.

9.1.2.9 (01-16-2008) Conflict of Laws
1. Federal laws prevail over state laws (statutory or constitutional), and state law, if in conflict, must yield. ( United States Constitution, Article VI, Clause 2, The Supremacy Clause).

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Internal Revenue Manual - 9.1.3 Criminal Statutory Provisions and Common Law

Chapter 1. Criminal Investigation Mission and Strategies Section 3. Criminal Statutory Provisions and Common Law

9.1.3 Criminal Statutory Provisions and Common Law
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9.1.3.1 9.1.3.2 9.1.3.3 9.1.3.4

Overview Definitions of Law Title 26 - Criminal Offenses Under the Internal Revenue Code Title 18 - Criminal Penalties Applicable to Fraud and Miscellaneous Investigations

9.1.3.1 (05-15-2008) Overview
1. Federal crimes are statutory crimes. Statutory law refers to laws enacted and established by a legislative body. Federal prosecution is limited to the areas prescribed by Federal statute. 2. Various aspects of the law are defined in this section. 3. The section also provides:
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Links to the complete text of the more frequently used penal sections of the United States Code (USC), Title 26 and Title 18 and some elements that need to be established to sustain prosecution. Links to the complete text of the penal statutes of the USC, Title 31, that are within the jurisdiction of IRS. Links to the complete text of the statutes governing the statute of limitations for criminal prosecution for both Title 26, Title 18 and Title 31 prosecutions. Information relating to criminal fines and penalties.

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4. This section does not include the text of the civil and criminal forfeiture statutes within CI jurisdiction (see IRM 9.7, Asset Seizure and Forfeiture concerning those topics). See Exhibit 9.1.31 which provides a list of those statutes within the jurisdiction of CI, including the forfeiture statutes.

9.1.3.2 (07-29-1998) Definitions of Law
1. Laws are rules of conduct which are prescribed or formally recognized as binding and are enforced by the governing power.

9.1.3.2.1 (07-29-1998) Statutory Law
1. Statutory law refers to laws enacted and established by a legislative body. All Federal crimes are statutory, but common law is frequently used for defining words used in the statutes. For example, statutes provide penalties for attempted evasion of income tax, but they do not define the terms "attempt" and "evasion."

9.1.3.2.2 (05-15-2008) Common Law
1. The common law is the body of law that develops and derives through judicial decisions, rather than from legislative enactments.

9.1.3.2.3 (07-29-1998) Substantive Law
1. Substantive law creates, defines, and regulates rights, duties, responsibilities, and obligations, whereas adjective or remedial law provides rules for enforcing rights or obtaining redress for their invasion.

9.1.3.2.4 (07-29-1998) Adjective Law
1. Adjective law provides rules of procedure or practice concerning proceedings before, during, and after trial, and rules of evidence relating to the admission of evidence at trial and the testing of the credibility and competency of witnesses.

Internal Revenue Manual - 9.1.3 Criminal Statutory Provisions and Common Law

9.1.3.2.5 (05-15-2008) Criminal Law
1. Criminal law is the branch of law that defines crimes and provides punishment. A crime is an offense against a state or the United States and is generally not punished through a private action. 2. Criminal sanctions, generally involving imprisonment and fines, are covered in Chapter 75 of the USC. In addition, some of the criminal sanctions in Title 18, and Title 31 of the USC, also apply to Title 26 matters.

9.1.3.2.5.1 (05-15-2008) Authorized Sentences
1. Except as otherwise specifically provided, a defendant who has been found guilty of an offense described in any Federal statute shall be sentenced in accordance with 18 USC §3551, Authorized Sentences. 2. Title 18 USC §3551 repealed 18 USC §1, Definition of Crimes.

9.1.3.2.5.2 (05-15-2008) Parties to Criminal Offenses
1. See subsection 9.1.3.4.1 and subsection 9.1.3.4.2 pertaining to 18 USC §2, Principals and 18 USC §3, Accessory After the Fact.

9.1.3.2.6 (05-15-2008) Civil Law
1. Civil law is the body of law concerning civil or private rights and remedies, as contrasted with criminal law. 2. Civil sanctions for tax offenses, which are generally assessed as additions to the tax imposed and are also referred to as ad valorem penalties, are covered in Chapter 68 of the Internal Revenue Code (IRC). Examples of civil penalties include: A. delinquency penalty (not exceeding 25 percent) for failure to file a timely return or to pay tax (26 USC §6651) B. accuracy-related penalty, a 20 percent penalty for negligence or disregard of rules or regulations (26 USC §6662)

Internal Revenue Manual - 9.1.3 Criminal Statutory Provisions and Common Law

C. fraud penalty, a 75 percent penalty on the portion of an underpayment that is due to fraud (26 USC §6663) 3. For more information concerning civil issues that may affect a criminal investigation or prosecution, see IRM 9.5.13, Civil Considerations; IRM 9.5.14, Civil Activity at the Close of the Subject Criminal Investigation; and Chapter 9.6, Trial and Court Related Activities. Chapter 9.6 includes IRM 9.6.2, Plea Agreements and Sentencing Process; IRM 9.6.3, Pre-Trial Procedures; and IRM 9.6.4, Trial.

9.1.3.2.7 (05-15-2008) Statutes of Limitations
1. Statutes of limitations are Federal and state statutes setting maximum time periods during which certain actions can be brought or rights enforced. 2. See subsection 9.1.3.6 for a discussion of the statute of limitations on criminal prosecution in general and with respect to specific offenses.

9.1.3.3 (05-15-2008) Title 26 - Criminal Offenses Under the Internal Revenue Code
1. Tax crimes are defined in Chapter 75 of the Internal Revenue Code (IRC) of 1986, entitled Crimes, Other Offenses, and Forfeitures. In addition, an offense under 26 USC §6050I may be subject to criminal sanctions. Unless otherwise indicated, the following penal sections of the IRC apply to all taxes imposed by Title 26. The subsections that follow provide links to the statute and in some instances the elements of the offense and common law interpretations.

9.1.3.3.1 (05-15-2008) 26 USC §6050I - Structuring Transactions to Evade Cash Reporting
1. Title 26 USC §6050I requires trades and businesses to file Form 8300, Report of Cash Payments Over $10,000 Received in a Trade or Business when in receipt of more than $10,000 in cash from one transaction or two or more related transactions. 2. Title 26 USC §6050I(f) prohibits structuring transactions to evade these reporting requirements. 3. For more information concerning the penalties associated with a violation of 26 USC §6050I, see subsection 9.1.3.3.4.

Internal Revenue Manual - 9.1.3 Criminal Statutory Provisions and Common Law

4. As of January 1, 2002, pursuant to the provisions of the USA Patriot Act, Form 8300 has a dual filing requirement under both Titles 26 and 31 (see 31 USC §5331). Therefore, care must be taken to ensure that disclosure of Forms 8300 and information extracted from these forms is made under the appropriate guidelines. For further information, see IRM 9.3.1, Disclosure.

9.1.3.3.2 (05-15-2008) 26 USC §7201 – Attempt to Evade or Defeat Tax
1. Title 26 USC §7201 prohibits willfully attempting in any manner to evade or defeat any tax or the payment thereof. 2. Under 26 USC §7201, a violation of the statute is punishable by a maximum fine of $100,000 ($500,000 in the case of a corporation), or imprisonment of not more than five years, or both, together with the costs of prosecution. However, the criminal fine provisions under 18 USC §3571 increase the maximum permissible fines for a violation of 26 USC §7201 to not more than $250,000 for individuals and $500,000 for corporations. Alternatively, if any person derives pecuniary gain from the offense, or if the offense results in pecuniary loss to a person other than the defendant, the defendant may be fined not more than the greater of twice the gross gain or twice the gross loss.

9.1.3.3.2.1 (05-15-2008) 26 USC §7201 – Avoidance Distinguished from Evasion
1. Avoidance of taxes is not a criminal offense. Any attempt to reduce, avoid, minimize, or alleviate taxes by legitimate means is permissible. The distinction between avoidance and evasion is fine, yet definite. One who avoids tax does not conceal or misrepresent. He/she shapes events to reduce or eliminate tax liability and, upon the happening of the events, makes a complete disclosure. Evasion, on the other hand, involves deceit, subterfuge, camouflage, concealment, some attempt to color or obscure events or to make things seem other than they are. For example, the creation of a bona fide partnership to reduce the tax liability of a business by dividing the income among several individual partners is tax avoidance. However, the facts of a particular investigation may show that an alleged partnership was not, in fact, established and that one or more of the alleged partners secretly returned his/her share of the profits to the real owner of the business, who, in turn, did not report this income. This would be an instance of attempted evasion.

9.1.3.3.2.2 (05-15-2008) 26 USC §7201 - Elements of the Offense
1. Whether the offense at issue involves the evasion or defeat of the assessment of a tax or of its payment, the elements of 26 USC §7201 are the same. However, the courts have interpreted the terms differently in some instances. These differences are noted in the explanations below. The

Internal Revenue Manual - 9.1.3 Criminal Statutory Provisions and Common Law

elements of the offense are: A. an additional tax due and owing B. an affirmative attempt in any manner to evade or defeat any tax, or the payment thereof C. willfulness 2. The following paragraphs provide additional details concerning each element of the offense.

9.1.3.3.2.2.1 (05-15-2008) 26 USC §7201 – Additional Tax Due and Owing
1. The government must establish that at the time the offense was committed the defendant owed more tax than he/she reported. However, the government is not required to prove the precise amount of tax evaded. Rather, the government may satisfy its obligation by showing that the amount of tax evaded was substantial. "Substantial" is a relative term and need not be measured in terms of gross and net income or by any particular percentage of the tax shown to be due and payable.

Note:
Where there is an evasion or attempted evasion of the payment of tax, courts have interpreted the element of additional tax due and owing somewhat differently. In such cases, the amount of tax due and owing need not be an amount in excess of the total tax reported. Instead, it could be an amount of tax that was shown on the return but was not paid. 2. Carryback losses are technically no legal impediment to prosecution for years in which they eliminate a tax liability. However, the probability of conviction could be lessened where it is shown that a tax deficiency does not exist by operation of law. 3. Likewise, the acceptance by government agents of a waiver agreement (Form 870, Waiver of Restrictions on Assessment and Collection of Deficiency in Tax and Acceptance of Overassessment) does not bar prosecution. However, experience has demonstrated that attempts to pursue both the criminal and the civil aspects of an investigation concurrently may jeopardize the successful completion of the criminal investigation. As a result, Policy Statement 4-26 (formally P–4–84, Balancing Civil and Criminal Aspects) provides, among other things, that the consequences of civil enforcement actions on matters involved in a criminal investigation and prosecution investigation should be carefully weighed.

9.1.3.3.2.2.2 (05-15-2008)

Internal Revenue Manual - 9.1.3 Criminal Statutory Provisions and Common Law

26 USC §7201 – Attempt to Evade or Defeat Any Tax or Payment Thereof
1. The substance of the offense under 26 USC §7201 is the term "attempt in any manner" . The statute does not define attempt, nor does it limit or define the means or methods by which the attempt to evade or defeat any tax may be accomplished. 2. Courts have held, however, that the term "attempt" implies some affirmative act or the commission of some overt act. This affirmative act need not be the filing of a false or fraudulent return, although most cases in this area do involve the filing of such a return. Courts have also held that a false statement made to Treasury agents for the purpose of concealing unreported income is an attempt to evade or defeat a tax. 3. The willful omission of a duty or the willful failure to perform a duty imposed by statute does not per se constitute an attempt to evade or defeat a tax. However, a willful omission or failure (such as a willful failure to make and file a return) when coupled with affirmative acts or conduct from which an attempt may be inferred would constitute an attempt. The Supreme Court in Spies v. United States provided examples of conduct that may imply "the attempt to evade or defeat any tax" , such as: A. keeping a double set of books B. making false entries, alterations, invoices, or documents C. destroying books or records D. concealing assets or covering up sources of income E. handling one's affairs to avoid making records usual in transactions of the kind F. any conduct, the likely effect of which would be to mislead or to conceal 4. The term "attempt" does not mean that one whose efforts are unsuccessful cannot be convicted under 26 USC §7201. The crime is complete when the attempt is made and nothing is added to its criminality by success or consummation, as would be the case with respect to attempted murder. It has been held that attempts cover both successful and unsuccessful endeavors or efforts. As the courts have stated, the real character of the offense lies, not in the failure to file a return or in the filing of a false return, but rather in the attempt to evade any tax. 5. It is well settled that a separate offense may be committed with respect to each year. Therefore, an attempt for one year is a separate offense from an attempt for a different year.

Internal Revenue Manual - 9.1.3 Criminal Statutory Provisions and Common Law

6. There may also be more than one violation in one year resulting from the same acts, such as the willful attempt to evade the payment of tax and the willful attempt to evade tax. Likewise, there may be a willful attempt to evade tax and a willful failure to file a return for the same year. 7. The mere failure or willful failure to pay a tax does not constitute an attempt to evade or defeat the payment of that tax. The above discussion of the need for an affirmative action or the commission of some overt act applies equally to this offense. Examples of actions that might constitute the attempted evasion of the payment of tax include: A. concealing assets B. reporting income through others C. misappropriating, converting, and diverting corporate assets D. filing late returns E. failing to withhold taxes as required by law F. filing false declarations of estimated taxes G. filing false tentative corporate returns 8. Courts have held that disbursement of available funds to creditors other than the government, or to corporate stockholders is not in itself an attempt to evade or defeat the payment of taxes.

9.1.3.3.2.2.3 (05-15-2008) 26 USC §7201 – Willfulness
1. To satisfy the third element of 26 USC §7201, the attempt to evade or defeat a tax or the payment thereof must be willful. Willfulness is defined as the voluntary, intentional violation of a known legal duty. Mere understatement of income and the filing of an incorrect return does not in itself constitute a willful attempt to evade tax. Absent an admission or confession, willfulness is rarely subject to direct proof and generally must be inferred from the facts and circumstances. Willfulness may be inferred from any conduct, the likely effect of which would be to mislead or conceal, such as that exemplified in Spies. 2. This definition of willfulness applies to all Title 26 offenses where willfulness is an element, unless stated otherwise.

9.1.3.3.3 (05-15-2008)

Internal Revenue Manual - 9.1.3 Criminal Statutory Provisions and Common Law

26 USC §7202 – Willful Failure to Collect or Pay Over Tax
1. A willful failure to collect or pay over tax is a criminal offense under 26 USC §7202. 2. Under 26 USC §7202, a violation of the statute is punishable by a maximum fine of $10,000 or imprisonment of not more than five years, or both, together with the costs of prosecution. However, the criminal fine provisions under 18 USC §3571 increase the maximum permissible fines for a violation of 26 USC §7202 to not more than $250,000 for individuals and $500,000 for corporations. Alternatively, if any person derives pecuniary gain from the offense, or if the offense results in pecuniary loss to a person other than the defendant, the defendant may be fined not more than the greater of twice the gross gain or twice the gross loss. 3. Violations under this section usually involve employers who fail to truthfully account for and pay over employment taxes, including Social Security taxes, Federal unemployment tax, and income tax withheld from employee wages. This type of offense is distinct from the failure to file returns, which is covered by 26 USC §7203 and the filing of false and fraudulent returns, which is covered by 26 USC §7206(1).

9.1.3.3.3.1 (05-15-2008) 26 USC §7202 - Elements of the Offense
1. The elements of the offense under 26 USC §7202 are: A. a duty to collect, truthfully account for, and pay over the tax B. a failure to collect and/or truthfully account for and pay over the tax C. willfulness (see subsection 9.1.3.3.2.2.3) 2. The following paragraphs provide additional details concerning each element of the offense.

9.1.3.3.3.1.1 (05-15-2008) 26 USC §7202 – Duty to Collect, Account for, and Pay Taxes
1. The duty to truthfully account for and pay over any tax is considered to be an inseparable dual obligation. Failure to pay, even though an accounting is made in the return filed, leaves the duty as a whole unfulfilled. 2. However, considerable difficulty has been encountered in determining the person charged with the duty of collecting, accounting for and paying over taxes, especially in investigations involving

Internal Revenue Manual - 9.1.3 Criminal Statutory Provisions and Common Law

small corporations where the precise duties of the officers are not clearly defined or consistently carried out. For example, in one investigation, it was determined that although the president of the corporation was the dominating force in the management of the firm, there were other officers who signed some returns and engaged in financial activities on behalf of the corporation. As a result, it was unclear whether the president was the officer under a duty to perform the required acts and the indictment was ultimately dismissed. Another case held that the term "person" includes a chief executive officer of a corporation who possesses the authority to determine how corporate funds should be expended. Accordingly, it is imperative to ascertain the various activities and responsibilities of all officers of a corporation before recommending prosecution against any one of them as the "person" referenced in 26 USC §7202 and defined in 26 USC §7343.

9.1.3.3.3.1.2 (05-15-2008) 26 USC § 7202 – Willfulness
1. Willfulness under 26 USC §7202 is the same as for all Title 26 offenses (i.e., the voluntary, intentional violation of a known legal duty). Evil motive or bad purpose is not needed to establish willfulness. For example, a successful prosecution under this section was based upon the following facts: The subject filed timely employment tax returns but habitually failed to pay the amount of tax shown to be due thereon. He willingly signed agreements for partial payments, made the first payment, and then ignored further requests for payments. When his bank accounts were levied upon, he closed the accounts and made arrangements with his customers to receive future payments in cash. All his assets were then transferred to the names of others. His only defense was that he used the money withheld from his/her employees to meet current operating expenses. An analysis of his bank accounts and records of personal expenditures showed that, contrary to his contentions, a profit was realized from the business in all years and funds were available to pay the taxes shown on the returns.

9.1.3.3.3.1.3 (05-15-2008) 26 USC §7202 – Statute of Limitations
1. The position of the Department of Justice (DOJ), Tax Division, is that the statute of limitations for violations of 26 USC §7202 is six years, as provided in 26 USC §6531(4).

Note:
Two Federal district courts have concluded that the statute of limitations is three years.

9.1.3.3.4 (05-15-2008) 26 USC §7203 - Willful Failure to File Return, Supply Information, or Pay Tax

Internal Revenue Manual - 9.1.3 Criminal Statutory Provisions and Common Law

1. Generally, a willful failure to file a return, supply information, or pay tax is a misdemeanor under 26 USC §7203. However, in the case of a willful violation of any provision of section 6050I, the violation is a felony. 2. Although they are covered by the same statute, any one of the following violations is considered a separate offense: A. a willful failure to make any type of required return B. a willful failure to pay any estimated tax or tax C. a willful failure to keep records D. a willful failure to supply information 3. With respect to misdemeanors under 26 USC §7203, the provision imposes a maximum fine of $25,000 ($100,000 for a corporation), or imprisonment of not more than one year, or both, together with the costs of prosecution. With respect to felonies involving willful violations of 26 USC §6050I, the statute imposes a fine and/or imprisonment of not more than five years. A. However, 18 USC §3571 increases the maximum permissible fine for misdemeanor offenses under 26 USC §7203 to not more than $100,000 for individuals and not more than $200,000 for corporations. B. Under 18 USC § 3571, felony offenses under 26 USC §7203 involving willful violations of 26 USC §6050I are punishable by a maximum fine of not more than $250,000 for individuals and $500,000 for corporations. C. Alternatively, if any person derives pecuniary gain from the offense, or if the offense results in pecuniary loss to a person other than the defendant, the defendant may be fined not more than the greater of twice the gross gain or twice the gross loss.

Note:
Title 26 USC §7203 does not apply to a person who fails to pay estimated tax if there is no addition to tax under section 6654 or 6655 with respect to such failure.

9.1.3.3.4.1 (05-15-2008) 26 USC §7203 - Elements of the Offense

Internal Revenue Manual - 9.1.3 Criminal Statutory Provisions and Common Law

1. The elements of the offense under 26 USC §7203 are: A. a legal duty to file an income tax return, supply information, maintain records, or pay a tax for the taxable year charged B. a failure to fulfill this legal duty C. willfulness (see subsection 9.1.3.3.2.2.3) 2. The following paragraphs provide additional details concerning each element of the offense.

9.1.3.3.4.1.1 (05-15-2008) 26 USC §7203 - Legal Duty to File Return, Supply Information, Maintain Records, or Pay a Tax
1. In general, persons liable under 26 USC §7203 include those defined in 26 USC §7343 as follows: "The term 'person' includes an officer or employee of a corporation, or a member or employee of a partnership, who as such officer, employee, or member is under a duty to perform the act in respect of which the violation occurs." 2. The requirements for making and filing a return are set forth in Chapter 61 of the Code. In corporate investigations, it may be difficult to determine which officer is responsible for filing the corporate returns. The issue of who has the legal duty to file is a question of fact to be determined by competent evidence. Such evidence may include proof of signing past Federal or state returns, or a statement in the corporate bylaws or minutes of directors' meetings. 3. The general requirement or duty to keep records is provided by 26 USC §6001. However, the types of records kept by various individuals are not alike, and neither the statute nor the regulations defines minimum standards for specific transactions or types of businesses. For example, evidence that a return was prepared from third-party records (banks, brokers, employers) may obviate the necessity for an individual to keep records.

9.1.3.3.4.1.2 (05-15-2008) 26 USC §7203 - Failure to File a Timely Return
1. In order to show that a return was not filed timely, the government must establish the due date of the return as provided by statute or regulations and a failure to file the return within such time. The time within which a return must be filed has been held to be the date set out in the USC or under regulations prescribed by the Secretary, as extended (if applicable) by the Secretary or the Secretary's delegate. The date when a return is due under the USC or regulations varies, depending

Internal Revenue Manual - 9.1.3 Criminal Statutory Provisions and Common Law

upon the type of tax involved or the type of return required to be filed. Thus, individual income tax returns, self-employment tax returns, and partnership returns made on the basis of the calendar year must be filed on or before the 15th day of April following the close of the calendar year; or, if made on a fiscal year basis, such returns must be filed on the 15th day of the fourth month following the close of the fiscal year (26 USC §6072(a)). Corporate returns for calendar years are due on the 15th day of March; or, if on a fiscal year basis, such returns are due on the 15th day of the third month following the close of the fiscal year (26 USC §6072(b)). Title 26 USC §6075 provides the deadlines for filing estate and gift tax returns, and 26 USC §6071 and the regulations promulgated thereunder provide the deadlines for filing excise tax returns and other returns required under the particular type of tax involved. 2. The Treasury regulations under 26 USC 6050I provide that Form 8300 is required to be filed by the 15th day after the date the cash was received. If that date falls on a Saturday, Sunday or legal holiday, the form is required to be filed the next business day. In addition, the statute itself provides that the individual/entity filing the form must provide a written statement to each person required to be named on the Form 8300 on or before January 31 of the year following the calendar year for which the return was required to be made. 3. In addition to proving the due date of the return, the government must establish that the person did not file the return by that date. Usually, this is accomplished by providing evidence that the subject did not file a return in the area of his/her legal residence or principal place of business or IRS Campus.

9.1.3.3.4.1.3 (05-15-2008) 26 USC §7203 - Willfulness
1. Willfulness means the voluntary, intentional, violation of a known legal duty. 2. The government must establish that the failure to file the return was willful. However, as distinguished from willfulness in a tax evasion investigation, the government need not prove a tax evasion motive. In this context, "willful" means voluntary, purposeful, deliberate, and intentional, as distinguished from accidental, inadvertent, or negligent.

9.1.3.3.4.1.3.1 (05-15-2008) 26 USC §7203 - Willful Failure to Pay Tax
1. Although an additional tax due is not an essential element of the offense, willfulness is difficult to establish without proof of a substantial tax liability. 2. When charging willful failure to pay tax, repeated failure to pay taxes, coupled with large expenditures for luxuries when taxes were owing, may be evidence of willfulness within the

Internal Revenue Manual - 9.1.3 Criminal Statutory Provisions and Common Law

meaning of the statute.

9.1.3.3.4.1.3.2 (05-15-2008) 26 USC §7203 - Willful Failure to Keep Records
1. Willfulness will also be inferred if a concealment motive is part of the failure to keep records. However, an important factor in the probability of conviction in these investigations may be a substantial deficiency attributable to the failure to keep records.

9.1.3.3.4.1.3.3 (05-15-2008) 26 USC §7203 - Willful Failure to Supply Information
1. The willfulness required to be shown when charging willful failure to supply information is the deliberate and intentional withholding of required information. For example, the deliberate and intentional failure to furnish a schedule of the partnership assets and liabilities as required on the partnership return was held to be willful. Disclosure of such information revealed considerable cash on hand.

9.1.3.3.4.1.4 (05-15-2008) 26 USC §7203 - Statute of Limitations
1. Under 26 USC §6531(4), the statute of limitations for willful failure to file returns (other than information returns) or to pay tax is six years. A three-year statute of limitations applies to willful failure to file information returns such as partnership returns, and to willful failure to keep records or supply information. The statute of limitations for willful failure to file a Form 8300 is three years.

9.1.3.3.5 (05-15-2008) 26 USC §7204 - Fraudulent Statement or Failure to Make Statement to Employees
1. Title 26 USC §7204 prohibits the willful furnishing of a withholding statement under 26 USC §6051 (i.e., Forms W-2 and W-3) that is false or fraudulent. The statute also makes it a crime willfully to fail to furnish such a statement. 2. Under 26 USC §7204, violations of the statute are punishable by a maximum fine of $1,000 or imprisonment of not more than one year, or both. However, 18 USC §3571 increases the maximum fine to not more than $100,000 for individuals or $200,000 for corporations. Alternatively, if any person derives pecuniary gain from the offense, or if the offense results in pecuniary loss to a person other than the defendant, the defendant may be fined not more than the

Internal Revenue Manual - 9.1.3 Criminal Statutory Provisions and Common Law

greater of twice the gross gain or twice the gross loss.

9.1.3.3.5.1 (05-15-2008) 26 USC §7204 - Elements of the Offense
1. The elements of the offense under 26 USC §7204 are: A. a legal duty to deduct employment tax or to withhold income tax (see 26 USC §3102(a) and 26 USC §3402(a)) B. a legal duty to timely furnish to the employee a written statement showing specified information concerning the deductions (see 26 USC §6051) C. furnishing a false or fraudulent statement to an employee, or failing to furnish the required statement to an employee at the required time and in the required manner D. willfulness, (see subsection 9.1.3.3.2.2.3) 2. A successful prosecution under this section was based upon the following facts: A. In order to attract and retain workers, an individual devised a scheme whereby actual weekly wages paid were recorded on regular weekly payroll sheets, the sum total of which was deducted by the company for income tax purposes. B. Individual payroll sheets were maintained for most of the employees, but the amounts of gross wages shown on the sheets were understated to accommodate the employees so that they would not have to report their entire wages for income tax purposes. The tax withheld from the wages was based upon the understated figure. In some instances, individual payroll sheets were not maintained for employees. C. At the end of the year, the employees whose names were shown on individual payroll sheets were furnished with false withholding statements (Forms W–2,) based upon the false payroll sheets. The employees whose names did not appear on payroll sheets did not receive withholding statements. D. The furnishing of false and fraudulent statements to some employees and the failure to furnish withholding statements to other employees constituted separate violations under this section.

9.1.3.3.6 (05-15-2008) 26 USC §7205 - Fraudulent Withholding Exemption Certificate or

Internal Revenue Manual - 9.1.3 Criminal Statutory Provisions and Common Law

Failure to Supply Information
1. Title 26 USC §7205 prohibits the willful supplying of false or fraudulent information to an employer on a withholding exemption certificate (Form W-4), as well as the willful failure to supply information that would require an increase in withholding. 2. Under 26 USC §7205, a violation of the statute is punishable by a maximum fine of $1,000 or imprisonment of not more than one year, or both. However, the criminal fine provisions under 18 USC §3571 increase the maximum permissible fines for a violation of 26 USC §7205 to not more than $100,000 for individuals and $200,000 for corporations. Alternatively, if any person derives pecuniary gain from the offense, or if the offense results in pecuniary loss to a person other than the defendant, the defendant may be fined not more than the greater of twice the gross gain or twice the gross loss.

9.1.3.3.6.1 (05-15-2008) 26 USC §7205(a) (Withholding on Wages) – Elements of the Offense
1. The elements of the offense under 26 USC §7205(a) are: A. the defendant had a legal duty to supply an employer with a signed Form W-4 relating to the number of withholding exemptions claimed (see 26 USC §3402(f)(2)) B. the defendant furnished the employer with a signed Form W-4, or failed to supply the employer with a signed Form W-4 C. if supplied, the information provided was false or fraudulent D. willfulness (see subsection 9.1.3.3.2.2.3) 2. The employee is required to notify his/her employer within 10 days of a change in his/her withholding exemption status which requires an increase in tax to be withheld. There is no penalty for failing to supply information which would require a decrease in tax to be withheld, and a certificate is not considered false or fraudulent if it contains information showing fewer exemptions than the employee is entitled to claim.

9.1.3.3.6.2 (05-15-2008) 26 USC §7205(b) (Backup Withholding on Interest and Dividends) – Elements of the Offense
1. This criminal provision applies to interest and dividend income. Generally, interest and dividend

Internal Revenue Manual - 9.1.3 Criminal Statutory Provisions and Common Law

income is not subject to the withholding tax. However, the USC provides a system of backup withholding which applies. When one of the following is true:
q

the payee fails to provide a taxpayer identification number (TIN) the IRS notifies the payor that the payee's TIN is incorrect the IRS notifies the payor that the payee is underreporting interest and dividends; or the payee fails to certify to the payor, when opening a new account after 1983, that he/she is not subject to backup withholding

q

q

q

2. The elements of the offense under 26 USC §7205(b) are: A. the payee had a legal duty under 26 USC §3406(d) to certify to the payor that the payee was not subject to backup withholding on interest and dividends B. the payee furnished a false certification of such information C. willfulness (see subsection 9.1.3.3.2.2.3)

9.1.3.3.6.2.1 (05-15-2008) 26 USC §7205 - Statute of Limitations
1. A three year statute of limitations applies (26 USC §6531), and the offense is a misdemeanor. 2. For offenses that involve furnishing false or fraudulent information, the statute of limitations runs from the date the document is filed. 3. It is unclear whether willful failure to supply information to an employer is a continuing offense for purposes of determining when the statute of limitations begins to run, in which case the limitations period would begin when the last act of the offense had occurred. The safe practice is to assume that it is not a continuing offense, and that the statute of limitations runs from the date the information was required to be supplied. However, if all other facts indicate that prosecution should be recommended for this offense, the continuing offense theory may be argued.

9.1.3.3.7 (05-15-2008) 26 USC §7206 - Fraud and False Statements

Internal Revenue Manual - 9.1.3 Criminal Statutory Provisions and Common Law

1. The offenses proscribed by 26 USC §7206 include: A. willfully making a false declaration under penalties of perjury B. willfully assisting in the preparation of a false tax document C. executing fraudulent bonds, permits and entries D. removing or concealing taxable goods with intent to defraud E. willfully concealing property or withholding/falsifying documents in connection with any compromise or closing agreement 2. Under 26 USC §7206, a violation of the statute is punishable by a maximum fine of $100,000 ($500,000 in the case of a corporation), or imprisonment of not more than three years, or both, together with the costs of prosecution. However, the criminal fine provisions under 18 USC §3571 increase the maximum permissible fines for a violation of 26 USC §7206 to not more than $250,000 for individuals and $500,000 for corporations. Alternatively, if any person derives pecuniary gain from the offense, or if the offense results in pecuniary loss to a person other than the defendant, the defendant may be fined not more than the greater of twice the gross gain or twice the gross loss.

9.1.3.3.7.1 (05-15-2008) 26 USC §7206(1) (False or Fraudulent Return, Statement, or Other Document Made Under Penalty of Perjury) – Elements of the Offense
1. In general, a person who willfully makes and subscribes, under penalty of perjury, any return, statement, or other document, which he/she does not believe to be true and correct as to every material matter, has committed a criminal offense under 26 USC §7206(1). 2. The elements of this offense are: A. the making and signing of a return, statement or other document containing a written declaration that it was signed under the penalties of perjury B. the inclusion in the document of information that was false as to a material matter C. the defendant’s lack of belief that the document was true and correct as to every material matter D. willfulness (see subsection 9.1.3.3.2.2.3)

Internal Revenue Manual - 9.1.3 Criminal Statutory Provisions and Common Law

3. This code section may apply regardless of whether the defendant’s purpose was to evade or defeat the payment of taxes. For example, prosecution for this offense may be appropriate when the government is able to prove the falsity of a partnership return, even if the government is not able to prove a resulting tax deficiency. 4. A matter is material if: A. it must be reported for a correct computation of tax B. it tends to influence or is capable of influencing the ability of the Service to audit or verify the accuracy of the return or a related return It is not necessary that the false statement actually affect the Service or that the Service actually rely on the statement. 5. Although the offense is complete upon signing the statement or document, prosecutions under this section should involve only false returns or statements presented to or filed with the IRS. This sanction is appropriate when it is possible to prove the falsity of a return but it is difficult to establish a tax deficiency, or when the falsification results in a relatively small amount of tax evaded when compared to the total tax liability. 6. If an individual files a false and fraudulent return, it is possible for him/her to incur criminal liability both for attempting to defeat and evade the payment of tax and for making a false and fraudulent statement under penalty of perjury.

9.1.3.3.7.2 (05-15-2008) 26 USC §7206(2) (Aid or Assistance in Preparation or Presentation of False or Fraudulent Return, Affidavit, Claim or Other) – Elements of the Offense
1. The elements of the offense under 26 USC §7206(2) are: A. the defendant aided or assisted in, or procured, counseled, or advised the preparation or presentation of a return or other document in connection with a matter arising under the internal revenue laws; B. the return or other document was false as to a material matter (see subsection 9.1.3.3.7.1); and C. willfulness (see subsection 9.1.3.3.2.2.3)

Internal Revenue Manual - 9.1.3 Criminal Statutory Provisions and Common Law

2. Actual preparation of the false return is not necessary to sustain a conviction. Therefore, this subsection applies not only to return preparers but also to anyone who participates in the fraud. For example, it may apply to corporate officers, preparers of corporate tax forms other than returns, tax shelter promoters and others who provide legal advice knowing the advice will be used for tax return preparation. 3. Although the offense generally is predicated on the filing of a tax return or other document, courts have reached different conclusions as to whether filing is a required element of the offense.

Note:
The Ninth Circuit has held that an offense was not committed under 26 USC §7206(2) unless the document containing the false statement was filed with the IRS. 4. In situations where a defendant willfully provided information or a document to an intermediary who was required by law to file an information return with or to transmit the document to the IRS, courts have held that the offense under 26 USC §7206(2) was complete when the defendant presented the information or document to the intermediary. 5. Aiding or assisting in the preparation of a false return and subscribing to a false return are two separate offenses. A defendant could therefore be prosecuted under both 26 USC §7206(1) and 26 USC §7206(2) for the same false return. 6. To establish the element of willfulness, the government must prove that the defendant acted with the purpose and objective of violating the internal revenue laws. However, a defendant may have willfully and knowingly prepared false and fraudulent income tax returns for another, even if the fraud involved was without the knowledge or consent of the person required to make the return. By contrast, if the person required to make the return was aware of the fraud, the defendant is entitled to have the court caution the jury to weigh accomplice testimony carefully. 7. In all race track payoff investigations, 26 USC §7206(2) should be used either as the primary statutory provision or as a supplement to 18 USC §1001. Title 26 USC §7206(2) should be charged when prosecuting either the "ten percenter" (i.e., a person who cashes the winning ticket in place of the true winner, in exchange for a percentage of the winnings) or the true winner.

9.1.3.3.7.3 (05-15-2008) 26 USC §7206(4) (Removal or Concealment with Intent to Defraud) – Elements of the Offense
1. The elements of the offense under 26 USC §7206(4) are:

Internal Revenue Manual - 9.1.3 Criminal Statutory Provisions and Common Law

A. a tax is or shall be imposed on any goods or commodities, or levy is authorized upon any property B. the defendant removed, deposited or concealed, or was concerned in removing, depositing or concealing, such goods, commodities or property C. the defendant did so with intent to evade or defeat the assessment or collection of any tax 2. Concealment under 26 USC §7206(4) includes not only secreting the item at issue or hiding it away, but also preventing its discovery or withholding knowledge of it. Thus, it is not necessary for the government to prove a physical removal, concealment or transfer from one place to another. An offense under 26 USC §7206(4) may be established by showing that book entries falsified the transfer of property rights.

9.1.3.3.7.3.1 (05-15-2008) 26 USC §7206(4) – Statute of Limitations
1. The statute of limitations for removal or concealment with intent to defraud is three years (26 USC §6531).

9.1.3.3.8 (05-15-2008) 26 USC §7207 - Fraudulent Returns, Statements, or Other Documents
1. Title 26 USC §7207 prohibits the willful and knowing delivery or disclosure to the IRS of a false or fraudulent document (regardless of whether it is signed under penalties of perjury). 2. The elements of this offense are: A. the defendant delivered to any officer or employee of the IRS a list, return, account, statement or other document B. the return, statement, or other document was false or fraudulent as to any material matter C. willfulness (see subsection 9.1.3.3.2.2.3) 3. Title 26 USC §7207 is generally reserved for investigations arising out of the presentation of false or altered documents by individuals in response to requests for substantiation of claimed deductions during the course of an examination, when the computed tax deficiencies are considered de minimus in relation to the circumstances of the investigation, and the means and methods used in committing the offense are commensurate with charging a misdemeanor rather

Internal Revenue Manual - 9.1.3 Criminal Statutory Provisions and Common Law

than a felony.

9.1.3.3.9 (05-15-2008) 26 USC §7208 - Offenses Relating to Stamps
1. This offense relates primarily to counterfeiting or fraudulently mutilating, removing, or reusing tax stamps. It occurs most in the excise tax area. See 26 USC §7208 for specific details.

9.1.3.3.10 (05-15-2008) 26 USC §7209 - Unauthorized Use or Sale of Stamps
1. This offense relates primarily to the unauthorized use or sale of tax stamps. See 26 USC §7209 for specific details.

9.1.3.3.11 (05-15-2008) 26 USC §7210 - Failure to Obey Summons
1. Failure to obey an IRS summons is a criminal offense under 26 USC §7210.

9.1.3.3.12 (05-15-2008) 26 USC §7211 - False Statements to Purchasers or Lessees Relating to Tax
1. Title 26 USC §7211 prohibits making a false statement concerning taxes to a purchaser or lessee.

9.1.3.3.13 (05-15-2008) 26 USC §7212 - Attempts to Interfere With Administration of Internal Revenue Laws
1. In general, 26 USC §7212 prohibits attempts to interfere with the administration of the Internal Revenue laws. 2. Title 26 USC §7212(a) establishes two general categories of prohibited conduct: (i) corruptly or forcibly endeavoring to impede any officer or employee from acting in an official capacity; and (ii) corruptly or forcibly obstructing or impeding (or endeavoring to obstruct or impede) the due administration of the Internal Revenue Code. The second category of conduct prohibited by 26 USC §7212(a) is described in what is known as the "omnibus clause." Title 26 USC §7212(b) prohibits the forcible rescue (or the attempt to forcibly rescue) property that has been seized under the Internal Revenue Code.

Internal Revenue Manual - 9.1.3 Criminal Statutory Provisions and Common Law

3. Pursuant to the statute, the two types of offenses established by 26 USC §7212(a) are punishable by a maximum fine of $5,000 or imprisonment of not more than 3 years, or both, except that if the offense is committed only by threats of force the punishment is a maximum fine of not more than $3,000 and imprisonment of not more than one year. The statute also provides that the offense established by 26 USC §7212(b) is punishable by a fine of not more than $500, or not more than double the value of the property rescued (whichever is greater), or imprisonment of not more than 2 years. However, the criminal fine provisions under 18 USC §3571 increase the maximum permissible fines for these offenses to not more than $250,000 for individuals and $500,000 for corporations. Alternatively, if any person derives pecuniary gain from the offense, or if the offense results in pecuniary loss to a person other than the defendant, the defendant may be fined not more than the greater of twice the gross gain or twice the gross loss. 4. Prosecutions under the first clause of 26 USC §7212(a) typically involve acts or threats of force against an individual IRS employee acting in an official capacity. Such prosecutions do not require authorization from the Department of Justice, Tax Division, and are directly referred to the US Attorney’s Office (see Tax Division Directive No. 129; IRM 9.5.12). 5. However, the omnibus clause makes clear that force or the threat of force is not an element of the offense under 26 USC §7212(a). Rather, the statute may apply to an individual who "corruptly" endeavors to impede the administration of the tax laws. The term "corruptly" generally implies an intent to obtain an improper advantage, but there is no requirement that the evidence establish such an intent. 6. Examples of conduct to which the omnibus clause may apply include, but are not limited to, providing false information, destroying evidence, attempting to influence a witness to give false testimony, and harassing an IRS employee. A 26 USC §7212(a) charge may also be authorized in appropriate circumstances to prosecute a person who, prior to any audit or investigation, engaged in large-scale obstructive conduct involving the tax liability of third parties. Examples include, but are not limited to, assisting in preparing or filing a large number of fraudulent returns or other tax forms, or engaging in other corrupt conduct designed to obstruct the IRS from carrying out its lawful functions. 7. In cases where the obstructive conduct is in furtherance of a preexisting criminal scheme, Tax Division Directive No. 129 (superseding Directive No. 77) authorizes prosecutors to charge 26 USC §7212(a) in addition to charging the underlying tax crime. Prosecutions under the omnibus provision of 26 USC §7212(a) require tax division authorization. 8. The statute of limitations for violations of 26 USC §7212(a) is 6 years.

9.1.3.3.13.1 (05-15-2008) 26 USC §7212(b) (Forcible Rescue) – Elements of the Offense

Internal Revenue Manual - 9.1.3 Criminal Statutory Provisions and Common Law

1. The elements of the offense under 26 USC §7212(b) are: A. property was legally seized under Title 26 B. the defendant knew the property had been seized C. the defendant forcibly and willfully retook the property 2. To be "forcible" , the rescue of property need not entail physical violence. Threatening language or intimidating conduct may be sufficient. The term "threats of force" as used in this subsection includes threats of bodily harm to an officer or employee of the United States or to a member of his/her family. It has been held that a forcible rescue under 26 USC §7212(b) includes the use of force against property, such as the breaking of a bank window, the removal of the IRS seal on a safe deposit box, or the removal of the box and its contents from the bank. 3. A defendant may be charged under 26 USC §7212(b) for forcibly retaking property that the government seized from a third party. To support a conviction under 26 USC §7212(b), the property must have been seized by an official with authority under the tax code to make the seizure. Disputes concerning other aspects of the legality of the seizure do not constitute a defense to the crime. Thus, it is no defense that the person retaking the property claims to be the real owner and that the property was seized by mistake.

Note:
Title 18 USC §2233 also prohibits the forcible rescue of property and gives the IRS concurrent jurisdiction with the Federal Bureau of Investigation (FBI) over such crimes. Current practice dictates that determination of whether an alleged forcible rescue is to be investigated by CI or the FBI depends on whether the property was taken before or after it was adjudicated government property. The elements of 18 USC §2233 are provided below, in the section describing Title 18 statutes.

9.1.3.3.14 (05-15-2008) 26 USC §7215 - Offenses with Respect to Collected Taxes
1. Failure to comply with any provision of 26 USC §7512(b), which requires employers and others, upon notice, to collect employment taxes and deposit the withheld taxes in a special bank account held in trust for the United States, is a criminal offense under 26 USC §7215(a). Title 26 USC §7215(b) provides exceptions to the penalty if there was reasonable doubt as to whether the law required collection of tax, or if the failure to comply was due to circumstances beyond the control of the person required to collect the tax. For purposes of this statute, a lack of funds existing

Internal Revenue Manual - 9.1.3 Criminal Statutory Provisions and Common Law

immediately after the payment of wages (whether or not created by the payment of such wages) is not considered "circumstances beyond the control" of a person.

9.1.3.3.14.1 (05-15-2008) 26 USC §7215 - Elements of the Offense
1. The elements of the offense under 26 USC §7215 are: A. The defendant was a person required to collect, account for, and pay over employment taxes. B. The defendant was provided with the statutory notice prescribed by 26 USC §7512(a). C. The defendant failed to comply with the collection requirements. D. There was no reasonable doubt as to whether the law required collection of tax, and the failure was not due to circumstances beyond the defendant’s control (see IRM 9.5.3, Criminal Investigation Strategies).

9.1.3.3.15 (05-15-2008) Other Criminal Statutes in the United States Code Within the Jurisdiction of CI
1. See Exhibit 9.1.3-1, Title 18, 26, and 31 Statutes within the Jurisdiction of Criminal Investigation, for the other criminal statutes contained within the USC. See the USC for specific details concerning these offenses. 2. See also Exhibit 9.1.3-2, Statutes Applicable when Charged in Conjunction with a Tax Money Laundering or Currency Violation for which CI has Jurisdiction.

9.1.3.4 (05-15-2008) Title 18 - Criminal Penalties Applicable to Fraud and Miscellaneous Investigations
1. The following sections of Title 18 are criminal offenses within the jurisdiction of CI. 2. Note that 18 USC §1028, which concerns identity theft, is discussed in IRM 9.5.3.

9.1.3.4.1 (05-15-2008)

Internal Revenue Manual - 9.1.3 Criminal Statutory Provisions and Common Law

18 USC §2 - Principals
1. Title 18 USC §2 is known as the "accomplice statute" and generally provides that a person may be convicted of a crime even if he/she did not personally perform every act constituting the crime. More specifically, 18 USC §2(a) provides that the following persons are punishable as principals: (i) a person who commits an offense against the United States; and (ii) a person who aids, abets, counsels, commands, induces or procures the commission of an offense against the United States. Title 18 USC §2(b) (frequently referred to as "causing" ) provides that a person is also punishable as a principal if that person willfully causes an act to be done which if directly performed by him or another would be an offense against the United States.

Note:
Aiding and abetting is not an independent crime. Some underlying criminal offense must be proven in order for liability to attach under 18 USC §2. 2. So long as the government can show that an underlying offense was committed by a principal and that the principal was aided and abetted by the defendant, the defendant may be convicted under this statute even if the principal has not been indicted, convicted or even identified. Moreover, the fact that the principal may have been acquitted of the underlying offense does not bar prosecution of the aider and abettor for the same offense. 3. The elements of the offense under 18 USC §2 are: A. the defendant associated with the criminal venture B. the defendant knowingly participated in the venture C. the defendant sought by his or her actions to make the venture succeed 4. Association with the criminal venture has been interpreted to mean the defendant shared the criminal intent of the principal. In prosecutions under 18 USC §2(a), the government must show that: A. the principal had the requisite criminal intent to commit the underlying offense; and B. the aider and abettor had the same requisite intent. Under 18 USC §2(b), the government need only show that the one causing the commission of the prohibited act had the requisite criminal intent to commit the underlying offense. The intent of the principal is irrelevant. 5. In order to aid and abet, a person must do more than merely be present at the scene of a crime and

Internal Revenue Manual - 9.1.3 Criminal Statutory Provisions and Common Law

have knowledge of its commission. The element of participation requires the government to show some active participation or encouragement, or some affirmative act designed to further the crime. 6. A corporation may be convicted for the criminal acts of its agents, under the theory of respondent superior, but criminal liability may be imposed on the corporation only where its agents are acting within the scope of their employment. However, the officers themselves may also be criminally liable for these same acts.

9.1.3.4.2 (05-15-2008) 18 USC §3 - Accessory After the Fact
1. Under 18 USC §3, a person who, knowing that a crime has been committed, assists the offender in order to hinder or prevent his apprehension, trial or punishment is an accessory after the fact.

Note:
This statute may be invoked by CI only when it relates to some other tax, money laundering or currency violation over which CI has jurisdiction.

9.1.3.4.3 (05-15-2008) 18 USC §4 - Misprision of Felony
1. Under 18 USC §4, a person who, with knowledge of the actual commission of a felony, conceals this knowledge from a person in civil or military authority is guilty of misprision of felony.

Note:
This statute may be invoked by CI only when it relates to some other tax, money laundering or currency violation over which CI has jurisdiction.

9.1.3.4.4 (05-15-2008) 18 USC §111 - Assaulting, Resisting, or Impeding Certain Officers or Employees
1. Title 18 USC §111 prohibits forcibly assaulting, resisting or impeding a current or former Federal officer or employee while engaged in or on account of the performance of official duties. 2. This statute is broader than 26 USC §7212, which addresses attempts to interfere with administration of Internal Revenue laws and is set forth in the previous section.

Internal Revenue Manual - 9.1.3 Criminal Statutory Provisions and Common Law

3. Although relevant to the work of CI, 18 USC §111 is primarily enforced by the Treasury Inspector General for Tax Administration (TIGTA) (see IRM 9.5.11, Other Investigations).

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Internal Revenue Manual - 9.1.3 Criminal Statutory Provisions and Common Law (Cont. 1)

Chapter 1. Criminal Investigation Mission and Strategies Section 3. Criminal Statutory Provisions and Common Law (Cont. 1)

9.1.3 Criminal Statutory Provisions and Common Law (Cont. 1)
q q q q q q

9.1.3.4 Title 18 - Criminal Penalties Applicable to Fraud and Miscellaneous Investigations 9.1.3.5 TITLE 31 9.1.3.6 Statutes of Limitations on Criminal Prosecution 9.1.3.7 18 USC §3571 – Sentence of Fine Exhibit 9.1.3-1 Statutes within the Jurisdiction of Criminal Investigation Exhibit 9.1.3-2 Statutes Applicable When Charged in Conjunction with a Tax or Money Laundering Violation over which CI Has Jurisdiction

9.1.3.4 Title 18 - Criminal Penalties Applicable to Fraud and Miscellaneous Investigations 9.1.3.4.5 (05-15-2008) 18 USC §115 - Influencing, Impeding, or Retaliating Against a Federal Official by Threatening or Injuring a Family Member
1. Title 18 USC §115 prohibits the assault, kidnap or murder (or the attempted or threatened assault, kidnap or murder) of a family member of a Federal official with intent to impede, intimidate, interfere with or retaliate against the official’s performance of his or her duties.

9.1.3.4.6 (05-15-2008) 18 USC §286 - Conspiracy to Defraud the Government with Respect to Claims
1. Title 18 USC §286 makes it a crime to enter into an agreement, combination or conspiracy to

Internal Revenue Manual - 9.1.3 Criminal Statutory Provisions and Common Law (Cont. 1)

defraud the United States or any Federal agency by obtaining or aiding to obtain the payment or allowance of any false, fictitious or fraudulent claim. 2. In a prosecution under 18 USC §286, the government must prove that the defendants agreed to engage in a scheme to defraud the government and knew that the objective of the scheme was illegal. The government must also prove that the conspirators agreed to defraud the government by obtaining the payment of false claims against the government. The government need not establish an overt act undertaken in furtherance of the conspiracy in order to prove a violation of 18 USC §286 because, unlike 18 USC §371 (discussed below), a 18 USC §286 conspiracy does not require an overt act. However, as a practical matter, the elements of proof in 18 USC §286 investigations generally do not differ from proof in 18 USC §371 tax investigations, because in most false claims conspiracy investigations the existence of the agreement will be proven by acts that were undertaken in furthering the conspiracy or in consummating the attempt to obtain payment of the claim.

9.1.3.4.7 (05-15-2008) 18 USC §287- False, Fictitious or Fraudulent Claims
1. Title 18 USC §287 prohibits making or presenting to a Federal employee, officer or agency any claim against the United States or any Federal agency with the knowledge that such claim is false, fictitious or fraudulent.

9.1.3.4.7.1 (05-15-2008) 18 USC §287- Elements of the Offense
1. The elements of the offense under 18 USC §287 are: A. the defendant presented a claim against the Federal government B. the claim was false, fictitious, or fraudulent C. the defendant knew that the claim was false, fictitious, or fraudulent 2. Courts have defined both the terms "false" and "fictitious" within the meaning of 18 USC §287 as "untrue when made, and then known to be untrue by the person making it or causing it to be made." The term "fraudulent" in this context has been defined to mean "known to be untrue, and made or caused to be made with the intent to deceive[.]" 3. Title 18 USC §287 does not require proof that the claim was honored or that the defendant successfully defrauded the government.

Internal Revenue Manual - 9.1.3 Criminal Statutory Provisions and Common Law (Cont. 1)

4. Whether the claim is false, fictitious or fraudulent must be determined based on the circumstances surrounding the presentation of the claim. It is not essential that the document making the claim contain fraudulent or fictitious information. For example, an income tax return that is correct on its face would constitute a false claim if the taxpayer filing the return knew that the refund shown to be due had already been paid upon the filing of a prior return. Similarly, the filing of a facially correct return claiming a refund of taxes that were withheld on behalf of a phantom employee (i.e., an individual whose name was entered on payroll but who did not perform work or receive wages) constitutes the presentation of a false claim under this statute. 5. Application of 18 USC §287 is particularly appropriate in instances where a false claim for refund has been filed. It is only necessary to prove the defendant filed the claim for refund knowing that he/she was not entitled to receive it.

9.1.3.4.8 (05-15-2008) 18 USC §371- Conspiracy to Commit Offense or to Defraud the United States
1. Title 18 USC §371, the general Federal conspiracy statute, defines the crime of conspiracy as follows: "If two or more persons conspire either to commit any offense against the United States, or to defraud the United States, or any agency thereof in any manner or for any purpose, and one or more of such persons do any act to effect the object of the conspiracy, each shall be [guilty of a felony].… If, however, the offense, the commission of which is the object of the conspiracy, is a misdemeanor only, the punishment for such conspiracy shall not exceed the maximum punishment provided for such misdemeanor." 2. The criminal statutes in Title 26 of the USC do not include the crime of conspiracy. Therefore, taxrelated conspiracies are generally prosecuted under 18 USC §371.

9.1.3.4.8.1 (05-15-2008) 18 USC §371 - Conspiracy in General
1. Conspiracy to commit an offense is a separate crime from the substantive offense that is the object of the conspiracy, and a defendant may be convicted of both the completed crime and the conspiracy. Similarly, an acquittal on a criminal charge does no preclude prosecution for conspiracy to commit the same offense. 2. The term "defraud," as used in 18 USC §371, is very broad and encompasses a vast array of conduct, including acts that do not constitute a crime under a separate Federal statute. The Supreme Court has held that "conspiracy to defraud the United States" means: A. to cheat the government out of money or property; or

Internal Revenue Manual - 9.1.3 Criminal Statutory Provisions and Common Law (Cont. 1)

B. to interfere with or obstruct one of its lawful government functions by deceit, craft, trickery or other dishonest means. To prove a conspiracy to defraud, the government does not have to establish a pecuniary loss to the United States or show that the government was actually harmed. Further, the government is not required to show that the fraud was a crime on its own. 3. Although there can be a conspiracy to violate almost any statute or to defraud any government agency, two types of conspiracy are of special concern to the IRS: A. Klein conspiracies (i.e., conspiracies to defraud the IRS); and B. conspiracies to commit tax offenses 4. Klein conspiracies are those that relate to the second clause of 18 USC §371, known as the "defraud clause" . Tax-related conspiracies are those that relate to the first clause of 18 USC §371, known as the "offense clause" . The DOJ, Tax Division Criminal Tax Manual contains a detailed discussion of these two types of conspiracies, which should be consulted for additional information.

9.1.3.4.8.2 (05-15-2008) 18 USC §371 - Klein Conspiracy
1. A Klein conspiracy, which is named for the leading case of United States v. Klein, is a conspiracy to defraud the government by impeding and impairing the lawful functions of the IRS in computing, assessing and collecting Federal income taxes. 2. Thus, if evidence is developed in an investigation that indicates an agreement to use deceit, craft, trickery or dishonest means to interfere with the lawful government functions of the IRS, then there is a potential Klein conspiracy. 3. The government must be able to show that the intent of each member of an alleged Klein conspiracy was to impede the functions of the IRS. However, the government does not have to prove that tax evasion was the motive for the conspiracy to defraud.

9.1.3.4.8.3 (05-15-2008) 18 USC §371 - Conspiracy to Commit a Tax Offense
1. Unlike a Klein conspiracy charge, a charge of conspiracy under the offense clause of 18 USC §371 requires reference in the indictment to another criminal statute that defines the object of the conspiracy.

Internal Revenue Manual - 9.1.3 Criminal Statutory Provisions and Common Law (Cont. 1)

9.1.3.4.8.4 (05-15-2008) 18 USC §371 - Elements of the Offense
1. The elements of the offense under 18 USC §371 are: A. The existence of an agreement by two or more persons to commit an offense against the United States or to defraud the United States; B. the defendant’s knowing and voluntary participation in the conspiracy; and C. the commission of an overt act in furtherance of the conspiracy

9.1.3.4.8.4.1 (05-15-2008) 18 USC §371 - Knowing and Voluntary Participation
1. In order to establish a defendant’s membership in a conspiracy, the government must prove that the defendant knew of the conspiracy and intended to join it and to accomplish the object of the conspiracy. 2. A defendant may become a member of a conspiracy without knowing all the details of the unlawful scheme and without knowing all the members. Similarly, a defendant may become a member of a conspiracy even if that person agrees to play a minor role in the conspiracy, so long as he/she understands the essential nature of the scheme and intentionally joins it. 3. A conspirator is responsible for offenses committed by another member of the conspiracy if the conspirator was a member of the conspiracy when the offense was committed and if the offense was committed in furtherance of, or as a foreseeable consequence of, the conspiracy. The government is not required to prove that each defendant specifically agreed to commit the offense or knew that the offense would be committed. Moreover, one who joins an ongoing conspiracy is deemed to have adopted the prior acts and declarations of conspirators made after the formation of and in furtherance of the conspiracy. 4. Mere knowledge that something illegal is going on is insufficient to show membership in a conspiracy. Thus, if a corporate officer knew that several other officers were meeting at a particular place to fraudulently rewrite a set of business records in an attempt to mislead an examining IRS agent, but the officer did not participate in any way to further the plan, he/she would not be considered a co-conspirator. 5. A defendant’s liability for substantive offenses committed by co-conspirators terminates when the defendant’s membership in the conspiracy ends. A conspirator may only withdraw from a

Internal Revenue Manual - 9.1.3 Criminal Statutory Provisions and Common Law (Cont. 1)

conspiracy by an affirmative action to defeat the object of the conspiracy. 6. A showing of withdrawal before the limitations period or before the commission of the first overt act is a complete defense to a conspiracy charge. 7. When only two persons are charged with conspiracy and there is no evidence implicating anyone else, acquittal or reversal as to one results in the acquittal or reversal as to the other. However, if the indictment charges two named conspirators and persons unknown as co-conspirators, and there is evidence to support the charge that one of the two defendants conspired with the unknown persons, that defendant's conviction may stand despite the fact that the other named defendant is acquitted. The rule that acquittal of all alleged conspirators except one results in acquittal of all applies only to acquittals on the merits. Thus, if the charge against one of two conspirators is dismissed as the result of a nolle prosequi, it would not affect the investigation against the other since a nolle prosequi does not amount to a dismissal on the merits. 8. All conspirators need not be defendants. Should the prosecution require the testimony of one of the conspirators to prove the conspiracy, he/she could be named in the indictment as a co-conspirator even though he/she is not named as a defendant. 9. All acts and statements in furtherance of the conspiracy may be introduced in evidence against the conspirators on trial regardless of whether the person who committed such act or made such statement is on trial.

9.1.3.4.8.4.2 (05-15-2008) 18 USC §371 - Agreement
1. Without an agreement, there can be no conspiracy. 2. The agreement need not be expressly stated, be in writing, or cover all the details of how it is to be carried out. The existence of an agreement may be proved by inference from the actions and statements of the conspirators or from the surrounding circumstances of the scheme. 3. It is not necessary that each conspirator know or see the others, but it is necessary to prove that each person charged in the conspiracy knew of the agreement and voluntarily joined the conspiracy intending to achieve the object of the agreement. 4. A single conspiracy may have multiple objectives and involve a number of sub-agreements to commit each of the specified objectives. Multiple-object conspiracy cases frequently raise the issue of whether there is a single conspiracy or multiple conspiracies. In determining whether a single conspiracy or multiple conspiracies exist, the general test is whether there was one overall agreement to perform various functions to achieve the objectives of the conspiracy.

Internal Revenue Manual - 9.1.3 Criminal Statutory Provisions and Common Law (Cont. 1)

5. Because the government must prove that at least two culpable parties reached an agreement, proof of an agreement solely between a defendant and a government agent or informant (who is merely pretending to agree) will not support a conspiracy conviction. 6. A conspiracy can exist between spouses. Also, a corporation that is not wholly-owned can conspire with its own officers, employees or stockholders.

9.1.3.4.8.4.3 (05-15-2008) 18 USC §371 - Overt Act
1. An overt act is any act done by a member of the conspiracy for the purpose of accomplishing the object of the conspiracy. Because the purpose of the overt act requirement is to show that the conspiracy is underway, the overt act itself need not be criminal. Preparing, signing, and filing a false return are common overt acts in a conspiracy to attempt to defeat and evade the payment of tax by filing a false and fraudulent return. 2. The conspiracy offense is not complete until an overt act is performed by at least one of the conspirators to achieve the object of the conspiracy. Therefore, a showing of withdrawal from the conspiracy before the commission of the first overt act is a complete defense to a conspiracy charge. 3. After the object of the a conspiracy has been achieved, any subsequent acts of concealment are not overt acts in furtherance of the conspiracy.

9.1.3.4.8.4.4 (05-15-2008) 18 USC §371 - Statute of Limitations
1. The statute of limitations for a conspiracy to evade taxes under the offense clause of 18 USC §371 and for a Klein conspiracy under the defraud clause of 18 USC §371 is six years. See 26 USC §6531. 2. The statute of limitations in a conspiracy begins to run from the last overt act proved.

9.1.3.4.8.4.5 (05-15-2008) 18 USC §371 - Duration of the Conspiracy
1. Once established, a conspiracy is presumed to continue until shown to terminate. A conspiracy is generally deemed to end when the core conspirators are arrested or when the object of the conspiracy has been accomplished. Determining the end of the conspiracy is particularly important in settling problems relating to the admissibility of evidence, prosecution of later joining

Internal Revenue Manual - 9.1.3 Criminal Statutory Provisions and Common Law (Cont. 1)

conspirators, and the running of the statute of limitations. In determining the termination date, it is necessary to consider carefully the terms of the agreement. 2. If the conspiracy involves an attempt to evade and defeat the payment of income tax by filing a false and fraudulent income tax return, the conspiracy is ordinarily terminated at the time the return is filed. However, a conspiracy to evade taxes by making false statements to conceal unreported income was held to continue through the making of such statements.

9.1.3.4.9 (05-15-2008) 18 USC §1001 - Statements or Entries Generally
1. Title 18 USC §1001 makes it a crime to knowingly or willfully: A. falsify or conceal a material fact B. make a materially false, fictitious or fraudulent statement or representation C. make or use any false document knowing it to contain a materially false, fictitious or fraudulent statement or entry in any matter within the jurisdiction of the executive, legislative, or judicial branch of the Federal government

Note:
This statute may be invoked by CI only when it relates to some other tax, money laundering, or currency violation over which CI has jurisdiction. 2. The statute broadly covers false statements made directly or indirectly to the Federal government. Pecuniary loss to the government is not an element of the offense. 3. The statute is normally invoked in connection with false documents or statements submitted to an Internal Revenue agent during the course of an audit or investigation. The statute is not normally invoked in the case of a false statement on a return because, assuming the return is signed under penalties of perjury, 26 USC §7206(1) is considered a more appropriate charge. 4. Persons summoned to produce records in their possession, who falsely state that the records have been stolen and conspire to conceal them, may be prosecuted under both this statute and 18 USC §1503 (Obstruction of Justice).

9.1.3.4.9.1 (05-15-2008) 18 USC §1001 - Elements of the Offense

Internal Revenue Manual - 9.1.3 Criminal Statutory Provisions and Common Law (Cont. 1)

1. The elements of the offense under 18 USC §1001 are: A. The defendant made a false statement or representation, or made or used a false document. B. In a matter within the jurisdiction of the executive, legislative or judicial branch of the Government of the United States. C. The false statement, representation or document related to a material matter. D. The defendant acted willfully (see subsection 9.1.3.3.2.2.3) and with knowledge of the falsity.

9.1.3.4.9.1.1 (05-15-2008) 18 USC §1001 - Jurisdiction
1. Courts have given the term "jurisdiction," as used in 18 USC §1001, an expansive reading. The jurisdiction of the executive, legislative or judicial branch has been interpreted to extend beyond the power to make final or binding determinations and to include matters within an agency’s investigative authority. 2. Because the executive branch is explicitly listed in the current version of the statute, it is clear that the statute applies to the IRS.

9.1.3.4.9.1.2 (05-15-2008) 18 USC §1001 - False Statements and Materiality
1. Title 18 USC §1001 prohibits false statements generally, not just statements or documents required by law or regulation. For example, an individual could commit a violation under this section by voluntarily furnishing a false and fraudulent net worth statement during an official investigation of his/her income tax liability. 2. The term "statement" includes both oral and written statements, and there is no requirement that the statement be under oath. 3. A statement may be false for purposes of this statute if it is technically true but is knowingly used for a false purpose. In contrast to perjury statutes, falsity may be proven under this statute by the uncorroborated testimony of a single witness. 4. The present wording of the statute clearly makes materiality an element of all aspects of this offense. The commonly used test for determining whether a matter is material is whether the

Internal Revenue Manual - 9.1.3 Criminal Statutory Provisions and Common Law (Cont. 1)

falsity or concealment had a natural tendency to influence, or was capable of influencing, the agency or department.

9.1.3.4.9.1.3 (05-15-2008) 18 USC §1001 - Knowledge and Willfulness
1. As used in 18 USC §1001, the term "willful" simply means the defendant committed the offense deliberately and with knowledge.

9.1.3.4.10 (05-15-2008) 18 USC §1341- Frauds and Swindles
1. Title 18 USC §1341 prohibits the use of the mail for the purpose of executing a scheme to defraud. The statute (known as the mail fraud statute) states in its entirety: "Whoever, having devised or intending to devise any scheme or artifice to defraud, or for obtaining money or property by means of false or fraudulent pretenses, representations, or promises, or to sell, dispose of, loan, exchange, alter, give away, distribute, supply, or furnish or procure for unlawful use any counterfeit or spurious coin, obligation, security, or other article, or anything represented to be or intimated or held out to be such counterfeit or spurious article, for the purpose of executing such scheme or artifice or attempting so to do, places in any post office or authorized depository for mail matter, any matter or thing whatever to be sent or delivered by the Postal Service, or deposits or causes to be deposited any matter or thing whatever to be sent or delivered by any private or commercial interstate carrier, or takes or receives therefrom, any such matter or thing, or knowingly causes to be delivered by mail or such carrier according to the direction thereon, or at the place at which it is directed to be delivered by the person to whom it is addressed, any such matter or thing, shall be fined under this title or imprisoned not more than 20 years, or both. If the violation occurs in relation to, or involving any benefit authorized, transported, transmitted, transferred, disbursed, or paid in connection within a presidentially declared major disaster or emergency… or affects a financial institution, such person shall be fined not more than $1,000,000 or imprisoned not more than 30 years, or both."

Note:
Per Tax Division Directive No. 128, dated October 29, 2004, the DOJ Tax Division may approve mail fraud charges in tax-related cases involving schemes to defraud the government or other persons if there was a large fraud loss or a substantial pattern of conduct and there is a significant benefit to bringing the charges instead of or in addition to Title 26 violations. Absent unusual circumstances, however, the Tax Division will not approve mail fraud charges in cases involving only one person’s tax liability, or when all submissions to the IRS were truthful. Mail fraud charges may be appropriate if the target filed multiple fraudulent returns seeking tax refunds using fictitious names, or using the names of real taxpayers without their knowledge. Fraud charges may

Internal Revenue Manual - 9.1.3 Criminal Statutory Provisions and Common Law (Cont. 1)

also be considered if the target promoted a fraudulent tax scheme. 2. The elements of the offense under 18 USC §1341 are: A. The defendant devised or intended to devise a scheme to defraud. B. The defendant used the mail for the purpose of executing, or attempting to execute, the scheme.

9.1.3.4.11 (05-15-2008) 18 USC §1343 - Frauds by Wire, Radio, or Television
1. Title 18 USC §1343 prohibits the transmission of any writings, pictures or sounds by means of wire, radio or television communication in interstate or foreign commerce for the purpose of executing a scheme to defraud. The statute (known as the wire fraud statute) states in its entirety: "Whoever, having devised or intending to devise any scheme or artifice to defraud, or for obtaining money or property by means of false or fraudulent pretenses, representations, or promises, transmits or causes to be transmitted by means of wire, radio, or television communication in interstate or foreign commerce, any writings, signs, signals, pictures, or sounds for the purpose of executing such scheme or artifice, shall be fined under this title or imprisoned not more than 20 years, or both. If the violation occurs in relation to, or involving any benefit authorized, transported, transmitted, transferred, disbursed, or paid in connection with, a presidentially declared major disaster or emergency … or affects a financial institution, such person shall be fined not more than $1,000,000 or imprisoned not more than 30 years, or both."

Note:
Per Tax Division Directive No. 128, dated October 29, 2004, the DOJ Tax Division may approve wire fraud charges in tax-related cases involving schemes to defraud the government or other persons if there was a large fraud loss or a substantial pattern of conduct and there is a significant benefit to bringing the charges instead of or in addition to Title 26 violations. Absent unusual circumstances, however, the Tax Division will not approve wire fraud charges in cases involving only one person’s tax liability, or when all submissions to the IRS were truthful. Wire fraud charges may be appropriate if the target filed multiple fraudulent returns seeking tax refunds using fictitious names, or using the names of real taxpayers without their knowledge. Fraud charges may also be considered if the target promoted a fraudulent tax scheme. 2. The elements of the offense under 18 USC §1343 are: A. The defendant devised or intended to devise a scheme to defraud.

Internal Revenue Manual - 9.1.3 Criminal Statutory Provisions and Common Law (Cont. 1)

B. The defendant used interstate wire communication for the purpose of executing, or attempting to execute, the scheme.

9.1.3.4.12 (05-15-2008) 18 USC §1344 - Bank Fraud
1. Title 18 USC §1344 prohibits the knowing execution (or attempted execution) of a scheme to defraud a financial institution or to obtain any of the money or property owned by or under the control of a financial institution by means of false pretenses. The statute (known as the bank fraud statute) states in its entirety: Whoever knowingly executes, or attempts to execute, a scheme or artifice: A. to defraud a financial institution B. to obtain any of the moneys, funds, credits, assets, securities, or other property owned by, or under the custody or control of, a financial institution, by means of false or fraudulent pretenses, representations, or promises shall be fined not more than $1,000,000 or imprisoned not more than 30 years, or both

Note:
Per Tax Division Directive No. 128, dated October 29, 2004, the DOJ Tax Division may approve bank fraud charges in tax-related cases involving schemes to defraud the government or other persons if there was a large fraud loss or a substantial pattern of conduct and there is a significant benefit to bringing the charges instead of or in addition to Title 26 violations. Bank fraud charges may be appropriate in the case of a fraud scheme that victimized a financial institution. For example, bank fraud charges would be appropriate where a defendant filed false refund claims and induced a financial institution to approve refund anticipation loans (RALs) on the basis of the fraudulent information submitted to the IRS.

9.1.3.4.13 (05-15-2008) 18 USC §1621 - Perjury Generally
1. Title 18 USC §1621, the general perjury statute, prohibits willfully giving testimony or signing a written statement under oath that one does not believe to be true.

Note:

Internal Revenue Manual - 9.1.3 Criminal Statutory Provisions and Common Law (Cont. 1)

This statute may be invoked by CI only when it relates to some other tax, money laundering, or currency violation over which CI has jurisdiction.

9.1.3.4.13.1 (05-15-2008) 18 USC §1621 - Elements of the Offense
1. The elements of the offense under 18 USC §1621 are: A. the defendant made a statement under an oath before a competent tribunal, officer or person, in any case in which a Federal law authorizes an oath to be administered B. the statement was false C. the defendant acted willfully D. the false statement was material to the proceedings

9.1.3.4.13.1.1 (05-15-2008) 18 USC §1621 - Oath
1. Proof of the competency and authority of the oath-giver may be required for prosecutions under 18 USC §1621. The source of a special agent's authority to administer an oath is derived from 26 USC §7602 and Delegation Order 4 (see IRM 1.2.52). 2. No specific form of oath is required. However, the wording must clearly indicate that the declarant is under oath and is required to speak the truth. When a special agent administers an oath, he/she should follow the language in 18 USC §1621 as a guide and advise the witness to testify truthfully.

9.1.3.4.13.1.2 (05-15-2008) 18 USC §1621 - False Statement
1. By its literal terms, 18 USC §1621 requires only that the person make a statement he/she does not believe to be true. The statute does not expressly require that the statement at issue be shown to be false. However, court decisions construing the statute make it unlikely that a prosecution for perjury would succeed if the defendant made a true statement that he/she believed to be false. 2. Courts usually require that the falsity of the statement be proven by the testimony of two witnesses or the testimony of one witness accompanied by some other form of corroboration. This is known as the "two witness" rule.

Internal Revenue Manual - 9.1.3 Criminal Statutory Provisions and Common Law (Cont. 1)

9.1.3.4.13.1.3 (05-15-2008) 18 USC §1621 - Materiality
1. The false statement at issue must be material to the proceedings. A false statement is material if it is capable of influencing (regardless of whether it actually influenced) the decision-making body to which it was addressed. 2. In order to establish the materiality of false testimony, the special agent should gather evidence concerning the purpose of the information sought from the witness and the relationship of this information to the other evidence that was provided. The materiality of the false testimony may be shown by the record of the proceedings in which it was given or by other competent evidence. 3. A special agent's principal consideration in determining whether a false statement given in the course of an official investigation was material should be whether the statement could have an effect on the investigation.

9.1.3.4.13.1.4 (05-15-2008) 18 USC §1621 - Willfulness
1. In order to constitute perjury, the false statement must have been made willfully (see subsection 9.1.3.3.2.2.3). Making a false statement as a result of confusion, mistake or faulty memory does not constitute perjury.

9.1.3.4.14 (05-15-2008) 18 USC §1622 - Subornation of Perjury
1. Title 18 USC §1622 makes it a crime to procure another person to commit perjury.

Note:
This statute may be invoked by CI only when it relates to some other tax, money laundering, or currency violation over which CI has jurisdiction.

9.1.3.4.15 (05-15-2008) 18 USC §1623 - False Declarations Before Grand Jury or Court
1. Title 18 USC §1623 prohibits knowingly making (or using any material containing) a false material declaration in a judicial or grand jury proceeding when one is under oath or penalty of perjury.

Internal Revenue Manual - 9.1.3 Criminal Statutory Provisions and Common Law (Cont. 1)

Note:
This statute may be invoked by CI only when it relates to some other tax money laundering, or currency violation over which CI has jurisdiction. 2. The "two witness" rule (see discussion of 18 USC §1621, above) does not apply to prosecutions under this statute. Rather, it is sufficient for the government to prove that the defendant made two or more statements under oath that were inconsistent to the degree that one of them was necessarily false. In such prosecutions, the government does not have to prove which irreconcilably contradictory declaration was false, so long as both were material and were made within the statute of limitations. 3. An admission of having made a false declaration can be a defense to 18 USC §1623. See 18 USC §1623(d) for specific details. This defense is not applicable in prosecutions brought under 18 USC §1621.

9.1.3.4.16 (05-15-2008) 18 USC §1952 - Interstate and Foreign Travel or Transportation in Aid of Racketeering Enterprises
1. Title 18 USC §1952 prohibits traveling in interstate or foreign commerce or using the mail with intent to distribute the proceeds of an unlawful activity or otherwise to further an unlawful activity.

9.1.3.4.17 (05-15-2008) 18 USC §1956 - Laundering of Monetary Instruments
1. Title 18 USC §1956 prohibits knowingly conducting or attempting to conduct a financial transaction involving the proceeds of an unlawful activity (a) with intent to further the unlawful activity or to violate 26 USC §7201 or §7206; or (b) with knowledge that the transaction is designed to conceal the nature or ownership of the proceeds.

9.1.3.4.18 (05-15-2008) 18 USC §1957- Engaging in Monetary Transactions in Property Derived from Specified Unlawful Activity
1. Title 18 USC §1957 prohibits knowingly engaging or attempting to engage in a monetary transaction in criminally derived property. See IRM 9.5.5, Money Laundering and Currency Crimes and Chapter 9.7, Asset Forfeiture Seizure sections for more information.

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9.1.3.4.19 (05-15-2008) 18 USC §1960 - Prohibition of Unlicensed Money Transmitting Businesses
1. Title 18 USC §1960 prohibits knowingly conducting, controlling, managing, supervising, directing or owning all or part of an unlicensed money transmitting business.

9.1.3.4.20 (05-15-2008) 18 USC §1962 - Prohibited Activities
1. Title 18 USC §1962 makes it a crime for any person who has received income derived from a pattern of racketeering activity or through collection of an unlawful debt to use such income in acquiring or operating any enterprise engaged in interstate or foreign commerce.

9.1.3.4.21 (05-15-2008) 18 USC §2071 - Concealment, Removal or Mutilation Generally
1. Title 18 USC §2071 makes it a crime for any person willfully and unlawfully to conceal, remove, mutilate or destroy (or to attempt to do so) any material filed or deposited with any judicial or public officer of the United States.

9.1.3.4.22 (05-15-2008) 18 USC §2231 - Assault or Resistance
1. Title 18 USC §2231 prohibits forcibly assaulting, resisting or impeding any person authorized to serve or execute search warrants or to make searches and seizures. 2. Title 18 USC §1501, which prohibits assaults upon or resistance to persons serving or executing legal process, is similar to 18 USC §2231 but carries a lighter penalty, includes non-forcible acts of obstruction and requires knowledge that the person impeded was an authorized person engaged in serving or executing process. Title 18 USC §2231 is restricted to forcible interference with searches and seizures, and there is no knowledge requirement.

9.1.3.4.23 (05-15-2008) 18 USC §2232 - Destruction or Removal of Property to Prevent Seizure
1. Title 18 USC §2232 prohibits the knowing destruction, damage or disposal (or attempted destruction, damage or disposal) of property for the purpose of preventing or impairing the

Internal Revenue Manual - 9.1.3 Criminal Statutory Provisions and Common Law (Cont. 1)

government’s authority to seize such property.

9.1.3.4.24 (05-15-2008) 18 USC §2233 - Rescue of Seized Property
1. Title 18 USC §2233 prohibits the forcible rescue or dispossession (or attempt to rescue or dispossess) any property seized under the Federal tax laws or by any person authorized to make searches and seizures.

9.1.3.4.24.1 (05-15-2008) 18 USC §2233 - Elements of the Offense
1. The elements of the offense under 18 USC §2233 are the same as those for 26 USC §7212(b), which is an analogous statute: A. the property was legally seized B. the defendant knew the property had been seized C. the defendant forcibly and willfully retook the property

9.1.3.4.25 (05-15-2008) 18 USC §2339A - Providing Material Support to Terrorists
1. Title 18 USC §2339A prohibits providing material support or resources knowing or intending that they be used in preparation for or in carrying out a violation of a criminal statute related to terrorism. 2. The statute provides in pertinent part: A. Whoever provides material support or resources or conceals or disguises the nature, location, source, or ownership of material support or resources, knowing or intending that they are to be used in preparation for, or in carrying out, a violation of Section 32, 37, 81, 175, 229, 351, 831, 842(m) or (n), 844(f) or (i), 930(c), 956, 1114, 1116, 1203, 1361, 1362, 1363, 1366, 1751, 1992, 2155, 2156, 2280, 2281, 2332, 2332a, 2332b, 2332f, or 2340A of this title, section 236 of the Atomic Energy Act of 1954 (42 USC §2284), section 46502 or 60123(b) of title 49, or any offense listed in section 2332b(g)(5)(B) (except for sections 2339A and 2339B) or in preparation for, or in carrying out, the concealment of an escape from the commission of any such violation, or attempts or conspires to do such an act, shall be fined under this title, imprisoned not more than 15 years, or both, and, if the death of any

Internal Revenue Manual - 9.1.3 Criminal Statutory Provisions and Common Law (Cont. 1)

person results, shall be imprisoned for any term of years or for life. […] b) Definitions. – As used in this section – (1) the term ''material support or resources'' means any property, tangible or intangible, or service, including currency or monetary instruments or financial securities, financial services, lodging, training, expert advice or assistance, safehouses, false documentation or identification, communications equipment, facilities, weapons, lethal substances, explosives, personnel […], and transportation, except medicine or religious materials[.]

9.1.3.4.25.1 (05-15-2008) 18 USC §2339B - Providing Material Support or Resources to Designated Foreign Terrorist Organizations
1. Title 18 USC §2339B prohibits knowingly providing material support or resources to a foreign terrorist organization, or attempting or conspiring to do so.

9.1.3.4.25.2 (05-15-2008) 18 USC §2339C - Prohibitions Against the Financing of Terrorism
1. Title 18 USC §2339C prohibits unlawfully and willfully providing or collecting funds with the intention or knowledge that such funds will be used to carry out a terrorist act, as defined in the statute.

9.1.3.5 (05-15-2008) TITLE 31
1. The regulations issued by the Secretary of the Treasury in 31 CFR Part 103 provide detailed requirements for financial recordkeeping and reporting of currency and foreign transactions. These regulations also give the IRS authority to enforce certain requirements and to investigate certain violations of Part 103. Title 31 CFR 103.56(b)(8) gives the IRS authority to examine for Title 31 compliance all financial institutions that are not currently examined by Federal bank supervisory agencies, excluding brokers or dealers in securities. Title 31 CFR 103.56(c)(2) gives the IRS authority to investigate all criminal violations of Title 31 (except with respect to reports of the transportation of currency or monetary instruments under 31 USC §5316). 2. For more information concerning Title 31 and money laundering, see IRM 9.5.5, Money Laundering and Currency Crimes. 3. The Title 31 criminal statutes within the jurisdiction of CI are discussed below.

9.1.3.5.1 (05-15-2008)

Internal Revenue Manual - 9.1.3 Criminal Statutory Provisions and Common Law (Cont. 1)

31 USC §5322(a) and (b) - Criminal Penalties
1. Title 31 USC §5322(a) and (b) provide criminal penalties for willful violations of the reporting requirements, other than the requirement of reporting foreign currency transactions (31 USC §5315) and the prohibition against structuring transactions to evade reporting requirements (31 USC §5324).

9.1.3.5.2 (05-15-2008) 31 USC §5324 - Structuring Transactions to Evade Reporting Requirement Prohibited
1. In general, Title 31 USC §5324 prohibits structuring any transaction with one or more domestic financial institutions for the purpose of evading reporting requirements. 2. Title 31 USC §5324(a) prohibits engaging in any of the following acts for the purpose of evading reporting requirements: A. Causing or attempting to cause a domestic financial institution to fail to file a Currency Transaction Report (CTR), or fail to make a log entry for purchases of bank checks and drafts, cashier's checks, money orders and traveler's checks over $3,000. B. Causing or attempting to cause a domestic financial institution to file a CTR, or make a log entry for purchases of bank checks and drafts, cashier's checks, money orders and traveler's checks over $3,000, that contains a material omission or misstatement of fact. C. Structuring or assisting in structuring, or attempting to structure or assist in structuring, any transaction with one or more domestic financial institutions. 3. The Money Laundering Suppression Act of 1994, Pub. L. 103-325 (September 23, 1994), amended 31 USC §5324 by adding a criminal penalty provision that does not include a "willfulness" requirement.

9.1.3.5.3 (05-15-2008) 31 USC §5331- Reports Relating to Coins and Currency Received in Nonfinancial Trade or Business
1. Title 31 USC §5331 requires that the receipt of more than $10,000 in coins or currency in one transaction (or two or more related transactions) by a person engaged in a non-financial trade or business be reported to the Financial Crimes Enforcement Network.

Internal Revenue Manual - 9.1.3 Criminal Statutory Provisions and Common Law (Cont. 1)

2. Title 26 USC §6050I (discussed above) is a parallel statute requiring trades and businesses to file Form 8300 when in receipt of more than $10,000 in cash from one transaction or two or more related transactions. The statute that forms the basis of the charge determines whether the investigation is covered by 26 USC §6103 disclosure restrictions (see subsection 9.1.3.3.1).

9.1.3.5.4 (05-15-2008) 31 USC §5332 - Bulk Cash Smuggling Into or Out of the United States
1. Title 31 USC §5332 prohibits smuggling more than $10,000 in currency or other monetary instruments into or out of the United States.

9.1.3.6 (05-15-2008) Statutes of Limitations on Criminal Prosecution
1. The statutes that provide the limitations periods for criminal prosecutions are: A. Title 26 USC §6531 B. Title 18 USC §3282 2. For information concerning the statute of limitations for civil forfeiture, see IRM 9.7.2, Civil Seizure and Forfeiture.

9.1.3.6.1 (05-15-2008) 26 USC §6531 - Periods of Limitation on Criminal Prosecutions
1. Title 26 USC §6531 provides a three-year statute of limitations for most criminal offenses arising under the internal revenue laws. 2. However, a six-year limitations period applies to the following offenses, which are described or specifically enumerated in 26 USC §6531: A. Title 26 USC §7201 (evasion of tax or payment) B. Title 26 USC §7202 (failure to collect, account for or pay over tax) C. Part of 26 USC §7203 (failure to pay tax; failure to file certain returns) D. Title 26 USC §7206(1) (filing false return)

Internal Revenue Manual - 9.1.3 Criminal Statutory Provisions and Common Law (Cont. 1)

E. Title 26 USC §7206(2) (aiding or assisting in preparation of false return) F. Title 26 USC §7207 (delivering or disclosing false document) G. Title 26 USC §7212(a) (attempting to interfere with the administration of the internal revenue laws) H. Title 18 USC §371 (conspiracy to commit tax evasion; conspiracy to defraud the internal revenue service)

9.1.3.6.2 (05-15-2008) 18 USC §3282 - Offenses Not Capital
1. Title 18 USC §3282 provides a five-year statute of limitations for criminal offenses not covered by 26 USC §6531, other than capital offenses.

9.1.3.6.3 (05-15-2008) Running of the Statute of Limitations
1. Generally, the statute of limitations begins to run on the day after the offense is completed (see Fed. R. Crim. P. R45). For example, if a false income tax return were filed on April 20, 2001, the statute of limitations would begin to run on April 21, 2001, and, provided there were no circumstances to toll the statute (see below), it would expire on April 21, 2007. Once the statute of limitations expired, prosecution would be barred. 2. The specific elements of the offense at issue must be examined to determine when the offense is completed. As illustrated below, different events "complete" different offenses: A. Filing a false return: In general, the offense is complete on the day the return is filed. However, if the return is filed early, the offense is complete on the statutory due date, which is provided by 26 USC §6072 (but see below). If the return is filed late, the offense is complete on the day the return is received by the IRS Campus. If an extension of time to file has been granted, the offense is complete when the return is filed, regardless of whether it is filed before or after the extension date. B. Failure to file a tax return: The offense is complete on the date the return is due. If a defendant has obtained an extension of time to file a tax return, there is no duty to file until the extension date. The extension date applies only if the extension is valid (see 26 USC §6081 and the regulations thereunder for the required procedures). An extension of time to file does not extend the time for payment of tax due on the return. Therefore, a request for an extension is only valid when accompanied by payment of the taxpayer’s estimated tax

Internal Revenue Manual - 9.1.3 Criminal Statutory Provisions and Common Law (Cont. 1)

liability. C. Tax evasion: The general rule is that the offense is complete on the date the last affirmative act took place or the statutory due date of the return, whichever is later. For example, the affirmative act of evasion may be a false statement made to collection agents after the return is filed. In such a case, the offense would be complete at the time the false statement was made. D. Conspiracy: The offense is complete on the date of the last overt act proved. This last overt act may be performed by any member of the conspiracy and must be in furtherance of the object of the conspiracy. 3. As indicated above, if a false return is filed early, the offense is not complete until the statutory due date. See 26 USC §6513, incorporated by reference into 26 USC §6531. However, in such cases, the conservative approach would be to measure the statute of limitations from the date on which the return was actually filed. If this approach would bar prosecution, prosecutors may argue that the statutory filing date applies. 4. If the statutory due date falls on a Saturday, Sunday, or legal holiday, the filing of the return on the next succeeding business day is considered timely (see 26 USC §7503). However, the statutory due date remains unchanged. Therefore, the calculation of the statute of limitations in investigations involving early filed returns or failures to file should use the statutory due date regardless of the day of the week on which that date falls. See Rev. Rul. 81-269, 1981-46 I.R.B.13.

9.1.3.6.4 (05-15-2008) Tolling of the Statute of Limitations
1. To "toll" the statute of limitations means to suspend the running of the statute for a period of time. The tolling of the statute of limitations should not be confused with the expiration of the statute of limitations. 2. The provisions related to the tolling of the statute of limitations are found in 26 USC §6531 and 18 USC §3290.

9.1.3.6.4.1 (05-15-2008) 26 USC §6531 – Tolling Provision
1. Under 26 USC §6531, the statute of limitations is tolled for the time during which: A. the offender is outside the United States (for any reason)

Internal Revenue Manual - 9.1.3 Criminal Statutory Provisions and Common Law (Cont. 1)

B. the offender is a fugitive from justice within the meaning of 18 USC §3290 2. In addition, 26 USC §6531 provides that where a complaint is instituted before a commissioner of the United States within the limitations period, the period is extended until nine months after the date of making the complaint. In order for this extension to apply, the complaint must allege sufficient facts to support a probable cause finding that the defendant has committed a tax crime.

9.1.3.6.4.2 (05-15-2008) 18 USC §3290 – Fugitives from Justice
1. Title 18 USC §3290 states in its entirety: "No statute of limitations shall extend to any person fleeing from justice." 2. There is disagreement among the courts as to the intent required under this statute. Several courts have held that mere absence from the prosecution jurisdiction is sufficient to toll the statute of limitations. Others have held that the intent to avoid arrest or prosecution must be proved.

9.1.3.6.4.3 (05-15-2008) 18 USC §1073 – Flight to Avoid Prosecution or Giving Testimony
1. Title 18 USC §1073 provides criminal sanctions for moving or traveling in interstate or foreign commerce with intent either (a) to avoid prosecution, custody or confinement after conviction; or (b) to avoid giving testimony in any criminal proceedings; or (3) to avoid service of lawful process.

9.1.3.7 (05-15-2008) 18 USC §3571 – Sentence of Fine
1. The criminal statutes described above generally provide a maximum fine that may be imposed as punishment for the offense. However, 18 USC §3571 raises the maximum permissible fines for all Federal criminal offenses, unless the law setting forth the offense specifies no fine or explicitly exempts the offense from the application of 18 USC §3571.

Exhibit 9.1.3-1 (05-15-2008) Statutes within the Jurisdiction of Criminal Investigation
Title 18 Violations

Internal Revenue Manual - 9.1.3 Criminal Statutory Provisions and Common Law (Cont. 1)

Aiding, abetting, counseling, commanding, inducing, or procuring the commission of an 18 USC §2 offense relating to a violation listed in this section Receiving, relieving, comforting, or assisting an offender to hinder or prevent his 18 USC §3 apprehension, trial, or punishment relating to a violation listed in this section Misprision of felony (failure to disclose and concealment of information about 18 USC §4 commission of a felony) relating to a violation listed in this section Assaulting, resisting, or impeding Federal 18 USC §111 officers or employees Influencing, impeding, or retaliating against a Federal official by threatening or injuring a 18 USC §115 family member Concealment of assets, false oaths and claims; 18 USC §152 and bribery Bankruptcy fraud 18 USC §157 Bribery of public officials and witnesses 18 USC §201 Taking from official files, papers relating to 18 USC §285 claims or using papers so taken Conspiring to defraud the United States with 18 USC §286 respect to claims False, fictitious, or fraudulent claims upon the 18 USC §287 United States Conspiracy to commit an offense against or to defraud the United States relating to a 18 USC §371 violation listed in this section Conspiracy to impede or injure an officer 18 USC §372 relating to a violation listed in this section Power of courts relating to a violation listed 18 USC §401 in this section Contempts constituting crimes relating to a 18 USC §402 violation listed in this section

Internal Revenue Manual - 9.1.3 Criminal Statutory Provisions and Common Law (Cont. 1)

Counterfeiting, forgoing, or falsifying powers of attorney, orders, receipts, or other writings to obtain money from or to defraud the United States, etc. Fictitious obligations Embezzlement and Theft- Public money, Property or Records Impersonating an officer or employee of the United States (IRS only) Impersonator making search or arrest Making false, fictitious, or fraudulent written or oral statements or representing a matter within the jurisdiction of a department or agency of the United States relating to a violation listed in this section Possessing false writings or documents to enable another to obtain money from the United States relating to a violation listed in this section Fraud and related activity in connection with identification documents Concealing person from arrest relating to a violation listed in this section Flight to avoid prosecution or giving testimony Protection of officers and employees of the United States Mail Frauds and Swindles Fraud by Wire, Radio, or Television Bank Fraud Obstructing or assaulting a duly authorized server of a writ or process of a US Court or a US Magistrate relating to a violation listed in this section Influencing or injuring officer or juror generally Obstruction of proceedings before departments, agencies, and committees Obstruction of Court Orders

18 USC §495 18 USC §514 18 USC §641 18 USC §912 18 USC §913

18 USC §1001

18 USC §1002

18 USC §1028 18 USC §1071 18 USC §1073 18 USC §1114 18 USC §1341 18 USC §1343 18 USC §1344 18 USC §1501

18 USC §1503 18 USC §1505 18 USC §1509

Internal Revenue Manual - 9.1.3 Criminal Statutory Provisions and Common Law (Cont. 1)

Obstruction of criminal investigations relating to a violation in this section Tampering with a witness, victim, or an informant Retaliating against a witness, victim, or an informant Perjury relating to a violation Procuring another to commit perjury (subornation of perjury) relating to a violation listed in this section False declaration before a grand jury or court relating to a violation Interstate or foreign travel or transportation in aid of racketeering enterprises Whoever, knowing that the property involved in a financial transaction represents the proceeds of some form of unlawful activity, conducts or attempts to conduct such a financial transaction which in fact involves the proceeds of specified unlawful activity with the intent to promote the carrying on of specified unlawful activity With the intent to engage in conduct constituting a violation of 18 USC §7201 or 18 USC §7206 Knowing that the transaction is designed in whole or in part to conceal or disguise the nature, the location, the source, the ownership, or the control, of proceeds of specified unlawful activity To avoid a transaction reporting requirement under state or Federal law Whoever transports, transmits, or transfers, or attempts to transport, transmit, or transfer a monetary instrument or funds from a place in the United States to or through a place outside the United States or to a place in the United States from or through a place outside the United States

18 USC §1510 18 USC §1512 18 USC §1513 18 USC §1621 18 USC §1622 18 USC §1623 18 USC §1952

18 USC §1956A1AI

18 USC §1956A1AII

18 USC §1956A1BI

18 USC §1956A1BII

18 USC §1956A2

Internal Revenue Manual - 9.1.3 Criminal Statutory Provisions and Common Law (Cont. 1)

With the intent to promote the carrying on of 18 USC §1956A2A a specified unlawful activity Knowing that the monetary instrument or funds involved in the transportation represent the proceeds of some form of unlawful activity and knowing that such transportation 18 USC §1956A2B is designed in whole or part to conceal or disguise the nature, the location, the source, the ownership, or the control, of proceeds of a specified unlawful activity To conceal or disguise the nature, the location, the source, the ownership, or the 18 USC §1956A2BI control, of proceeds of a specified unlawful activity To avoid a transaction reporting requirement 18 USC §1956A2BII under state or Federal law Whoever conducts or attempts to conduct a financial transaction involving property represented to be the proceeds of specified 18 USC §1956A3 unlawful activity, or property used to conduct or facilitate a specified unlawful activity, with the intent To promote the carrying on of specified 18 USC §1956A3A unlawful activity To conceal or disguise the nature, the location, the source, the ownership, or the 18 USC §1956A3B control, of proceeds of specified unlawful activity To avoid a transaction reporting requirement 18 USC §1956A3C under state or Federal law Conspiracy to commit violations of 18 USC §1956 or 18 USC §1957 (as of 10/1994 18 USC §1956G renumbered as 18 USC §1956H) Conspiracy to commit violations of 18 USC 18 USC §1956H §1956 or 18 USC §1957 Engaging in monetary transactions in property 18 USC §1957 derived from a specified unlawful activity Illegal money transmitting business 18 USC §1960 Prohibited activities of racketeer influenced 18 USC §1962 and corrupt organizations

Internal Revenue Manual - 9.1.3 Criminal Statutory Provisions and Common Law (Cont. 1)

Concealing, removing, mutilating government records and reports Assaulting, resisting, or interfering with a person making an authorized search or seizure Destroying or removing property to prevent its seizure Destruction or removal of property to prevent seizure Providing material support to terrorists Providing material support or resources to designated foreign terrorist organization Prohibitions against the financing of terrorism Revocation of probation Jury trial of criminal contents

18 USC §2071 18 USC §2231 18 USC §2232 18 USC §2233 18 USC §2339A 18 USC §2339B 18 USC §2339C 18 USC §3565 18 USC §3691 Violations 26 USC §6050I 26 USC §7201 26 USC §7202 26 USC §7203 26 USC §7204 26 USC §7205 26 USC §72061 26 USC §72062

Title 26 Structuring transactions to evade reporting requirements for returns relating to cash received in trade or business Evasion of tax in any matter Failure to collect or account for and pay over tax Failure to file return, pay tax, keep records, or supply information Fraudulent statement or failure to make statement to employees Fraudulent withholding exemption certificate or failure to supply information Making and subscribing a false return, statement, or other document under the penalties of perjury Aiding or advising the preparation or presentation of a false return, affidavit, claim, or other document Executing a false bond, permit or other document, or aiding or advising such an execution Removing, depositing, or concealing property subject to tax or levy with intent to evade

26 USC §72063 26 USC §72064

Internal Revenue Manual - 9.1.3 Criminal Statutory Provisions and Common Law (Cont. 1)

Concealing property, withholding, mutilating or falsifying a record, or making a false statement in 26 USC §72065 connection with a compromise or closing agreement Fraudulent returns, statements, or other document 26 USC §7207 Counterfeiting, mutilating, and other offenses 26 USC §7208 relating to tax stamps Unauthorized use or sale of stamps 26 USC §7209 Failure to obey summons 26 USC §7210 False statement to a purchaser or lessee relating 26 USC §7211 to amount of tax involved in purchase or lease Forcible interference with administration of the 26 USC §7212A Internal Revenue Laws Forcible rescue of seized property 26 USC §7212B Offenses by officers and employees of the United 26 USC §7214 States Failure to comply with notice (under IRC §7512) to collect withheld income and social security 26 USC §7215 taxes and collected excise taxes and to deposit such taxes in a special bank account Failure to obtain license for collection of foreign 26 USC §7231 items (dividends and interest) Failure to register or give bond, or false statement by manufacturer or producer of gasoline or 26 USC §7232 lubricating oil Representation that the retailer’s excise tax is 26 USC §7261 excluded from the price of an article Violation of occupational tax laws relating to 26 USC §7262 wagering, failure to pay Special Tax Possession of taxable goods with intent to sell in 26 USC §7268 fraud or avoid payment of taxes thereon Failure to affix stamps on foreign insurance 26 USC §7270 policy with intent to evade tax Penalty for offenses relating to certain airline 26 USC §7275 tickets and advertising Unlawful to have or possess any property used in 26 USC §7302 violating provisions of Internal Revenue Law Title 31 Violations

Internal Revenue Manual - 9.1.3 Criminal Statutory Provisions and Common Law (Cont. 1)

Financial institution's requirement to file currency transaction report Record and reports on foreign financial agency accounts Search and forfeiture of monetary instruments Special Measures regarding international transactions of primary money laundering concern Failure to maintain procedures Failure to file SAR's Notification to subject of SAR Due diligence with respect to private banking and correspondent accounts with foreign persons Prohibition on correspondent account with foreign shell bank Failure to establish an anti-money laundering program Criminal violation of Title 31 reporting requirements Criminal violation of Title 31 reporting requirements involving other criminal activity Cause or attempt to cause a domestic financial institution to fail to file a required report Cause or attempt to cause a domestic financial institution to file a required report that contains a material omission or misstatement of fact Structure or assist in structuring, or attempt to structure or assist in structuring, any transaction with one or more domestic financial institutions Cause or attempt to cause a trade or business to fail to file report Cause or attempt to cause a trade or business to file a report that contains a material omission or misstatement Structure any transaction with one or more nonfinancial trade or businesses. Fail to file or cause a person to fail to file a CMIR

31 USC §5313A 31 USC §5314 31 USC §5317 31 USC §5318A 31 USC §5318A2 31 USC §5318G 31 USC §5318G2 31 USC §5318I 31 USC §5318J 31 USC §5318H 31 USC §5322A 31 USC §5322B 31 USC §5324A1 31 USC §5324A2

31 USC §5324A3 31 USC §5324B1 31 USC §5324B2 31 USC §5324B3 31 USC §5324C1

Internal Revenue Manual - 9.1.3 Criminal Statutory Provisions and Common Law (Cont. 1)

International monetary instrument transactions No person shall, for the purpose of evading the reporting requirements of section 5316. Failure to register as a money transmitting businesses Reports relating to Currency received in a nonfinancial Trade or Business Bulk cash smuggling into or out of the United States Title 33 Taxation & Finance-Virgin Islands Attempt to evade or defeat tax Conspiracy to evade or defeat tax Willful failure to collect or pay over tax Willful failure to file return, supply information, or pay tax Fraud and false statements Fraudulent returns, statements, or other documents Offenses relating to stamps Unauthorized use or sale of stamps Failure to obey summons False statements to purchases or lessees relating to tax Attempts to interfere with administration of the internal revenue laws Unauthorized disclosure of information Offenses by officers and employees of the Virgin Islands Title 50

31 USC §5324C2 31 USC §5330 31 USC §5331 31 USC §5332 Violations 33 USC §1521 33 USC §1522 33 USC §1523 33 USC §1524 33 USC §1525 33 USC §1526 33 USC §1527 33 USC §1528 33 USC §1529 33 USC §1530 33 USC §1531 33 USC §1532 33 USC §1533 Violation 50 USC §1705

Section 50 USC §1705 sets forth criminal and civil penalties for violating the IEEPA statutes.

Title 18 Penalty Statutes within CI's Jurisdiction Criminal Penalties 18 USC §1963

Title 18 Civil Seizures within CIs Jurisdiction

Internal Revenue Manual - 9.1.3 Criminal Statutory Provisions and Common Law (Cont. 1)

Civil Forfeiture Criminal Forfeiture Civil Forfeiture of Fungible Property

18 USC §981 18 USC §982 18 USC §984

Title 31 Civil Statutes which if Violated can Trigger Criminal Statutes within CIs Jurisdiction Reports on Domestic Coin Currency Transactions (CTR Requirements) Records and Reports on Foreign Financial Agency Transactions (FBARS) 31 USC §5313 31 USC §5313

Exhibit 9.1.3-2 (05-15-2008) Statutes Applicable When Charged in Conjunction with a Tax or Money Laundering Violation over which CI Has Jurisdiction
18 USC §152 18 USC §157 18 USC §201 18 USC §285 18 USC §372 18 USC §401 18 USC §402 18 USC §495 18 USC §514 18 USC §641 18 USC §912 18 USC §913 18 USC §1002 Concealment of Assets, False Oaths and Claims; and Bribery Bankruptcy Fraud Bribery of Public Officials and Witnesses Taking or Using Papers Relating to Crimes Conspiracy to Impede or Injure Officer Power of Court Contempt Constituting Crimes Counterfeiting, forgoing, or falsifying powers of attorney, orders, receipts, or other writings to obtain money from or to defraud the United States, etc. Fictitious obligations Embezzlement and Theft- Public money, Property or Records Impersonating an Officer or Employee of the United States Impersonator Making Arrest or Search Possession of false papers to Defraud the United States

Internal Revenue Manual - 9.1.3 Criminal Statutory Provisions and Common Law (Cont. 1)

18 USC §1028 18 USC §1071

Fraud and related activity in connection with identification documents Concealing person from arrest relating to a violation listed in this section Protection of Officers and Employees of the United States

18 USC §1073 Flight to Avoid Prosecution or Giving Testimony 18 USC §1114

18 USC § 1341 Frauds and Swindles 18 USC § 1343 Frauds by Wire, Radio, or Television 18 USC § 1344 Bank Fraud 18 USC §1501 Assault on Process Server 18 USC §1503 18 USC §1505 Influencing or Injuring Officer, or Juror Witness Generally Obstruction of Proceedings before Departments, Agencies, and Committees

18 USC §1509 Obstruction of Court Orders 18 USC §1510 Obstruction of Criminal Investigations 18 USC §1512 Tampering with a Witness, Victim, or an Informant 18 USC §1513 31 USC 5332 Retaliating Against a Witness, Victim, or an Informant Bulk Currency Smuggling

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Internal Revenue Manual - 9.1.4 Criminal Investigation Directives

Chapter 1. Criminal Investigation Mission and Strategies Section 4. Criminal Investigation Directives

9.1.4 Criminal Investigation Directives
q q q q q q q q q q

9.1.4.1 Overview 9.1.4.2 Purpose and Scope 9.1.4.3 Directive No. 1- Enforcement Operations 9.1.4.4 Directive No. 2 - Pre-Employment, Pre-Access Drug Test Policy 9.1.4.5 Directive No. 3 - Use Of Government Owned Vehicles 9.1.4.6 Directive No. 4 - Firearms 9.1.4.7 Directive No. 5 - Physical Fitness Program 9.1.4.8 Directive No. 6 - Use Of Alcohol 9.1.4.9 Directive No. 7 - Emergency Driving 9.1.4.10 Directive No. 8 - Use Of Ballistic Vests During Enforcement Operations

9.1.4.1 (05-30-2008) Overview
1. Criminal Investigation's (CI) National Directives, CI Service-wide Delegation Orders, and local CI Delegation Orders help accomplish the mission of both CI and the IRS, while maintaining the organizational structure. 2. The CI Delegation Orders provide the organization with the ability to delegate various authorities within CI management and effectively allocate management resources. The CI Delegation Orders can be found on the CI Web in eLibrary and on the Review, Program and Evaluation (CI:S:RPE) home page. 3. The CI Directives discussed in this section are: A. Directive No. 1 - Enforcement Operations B. Directive No. 2 - Pre-Employment, Pre-Access Drug Test policy

Internal Revenue Manual - 9.1.4 Criminal Investigation Directives

C. Directive No. 3 - Use of GOVs D. Directive No. 4 - Firearms E. Directive No. 5 - Physical Fitness Program F. Directive No. 6 - Use of Alcohol G. Directive No. 7 - Emergency Driving H. Directive No. 8 - Use of Ballistic Vests During Enforcement Operations

9.1.4.2 (09-23-2004) Purpose and Scope
1. The purpose of these orders and directives is to promote a uniform national application of existing procedures. 2. The directives apply to all special agents and must be applied consistently throughout the organization.

9.1.4.3 (05-30-2008) Directive No. 1- Enforcement Operations
1. In accordance with the CI Mission, CI employees will execute their law enforcement responsibilities by continually assessing potential risks to the public, the investigating agents, and the subjects concerned, as well as the probable impact of their enforcement activities on the image of the IRS. 2. All levels of CI's management must ensure that every enforcement operation is effectively planned, that special agents are adequately trained and equipped to safely accomplish required law enforcement tasks, and that risks are continually assessed throughout an operation. Upon completion, all operations must be reviewed for effectiveness. 3. All special agents are expected to maintain an appropriate level of physical fitness, weapons proficiency, and defensive tactics skills to effectively and safely carry out their duties and responsibilities. 4. The Special Agent in Charge (SAC) must ensure, on a quarterly basis, that all special agents under their supervision are trained, equipped, and qualified to participate in law enforcement

Internal Revenue Manual - 9.1.4 Criminal Investigation Directives

activities. This includes firearms training, defensive tactics training, and other appropriate enforcement training to meet local enforcement needs. The development and delivery of each field office's enforcement operations training plan will be subject to Headquarters (HQ) review.

9.1.4.4 (05-30-2008) Directive No. 2 - Pre-Employment, Pre-Access Drug Test Policy
1. Pre-employment drug testing is required for all CI employees. 2. Special agents are subject to random drug tests in addition to the pre-employment testing. 3. Pre-access drug testing is required for all IRS personnel and non-IRS personnel who are to be given access to, or provide support for, CI information technology systems. 4. A waiver of the background investigation and drug test requirement may be granted by the Chief, CI. 5. Internal Revenue Manual section 9.11.4, Personnel Matters sets forth the required processes with CI employees and others need to follow to obtain access to the CI network.

9.1.4.5 (05-30-2008) Directive No. 3 - Use Of Government Owned Vehicles
1. The nature of CI's work requires the ability to respond in a safe and timely manner 24 hours a day. When called upon to assist in an enforcement activity, each special agent and his/her immediate supervisor must have access to their assigned government owned vehicle (GOV). 2. Criminal Investigation field special agents and their immediate supervisors will have their assigned government vehicles available 24 hours a day. 3. The Chief, CI, has designated special agents as employees who may drive between their residence and various locations for official purposes under the criminal law enforcement duty exception of 31 USC §1344(a)(2)(B). Internal Revenue Manual 1.14.7.2.2.1(1) provides that an employee may be provided with home-too-work transportation only after a determination has been executed by the Treasury Secretary. 4. Any special agent having a government vehicle available 24 hours a day will be authorized to drive that vehicle during official duty hours to a fitness facility to participate in the Physical Fitness Program (IRM 9.2.2, Physical Fitness Program).

Internal Revenue Manual - 9.1.4 Criminal Investigation Directives

5. The SAC, Assistant Special Agent in Charge (ASAC), and other special agents assigned to "nonfield" positions may use GOVs on an intermittent basis when justified by their work. Such use may include "home-to-work" use of the vehicle. If a situation arises which requires a SAC, ASAC, or a "non-field" special agent to use a GOV on a continuing basis (including "home-towork" use), that individual must submit a request through channels to the Chief, CI, identifying the CI position that requires the home-to-work transportation. The request will then be submitted to the Secretary of the Treasury for approval. The process for submitting requests for approval of home-to-work use of government vehicles is contained in Treasury Directive 74-06 (March 20, 2002). 6. Non-special agents must justify "home-to-work" use of government vehicles under the field work exception of 31 USC §1344(a)(2)(A). 7. Employees assigned to a foreign post will follow CI's policy regarding the use of a GOV with the following modifications: A. The employee will adhere to the policies and procedures for the use of a GOV instituted by the Chief of Mission (COM) for the embassy/consulate to which the special agent is assigned and the policies and procedures outlined in the US Department of State Foreign Affairs Manual Volume 14, part 418. B. The COM may approve use of official vehicles for other than business purposes when public transportation is unsafe or not available or when such use is advantageous to the US government. C. If the employee is assigned to a post of duty in which the COM finds that public transportation or transportation by privately-owned vehicle is unsafe then the transportation of dependents via a GOV for certain purposes such as transport to school may be approved by the COM. 8. For any of the modifications listed in preceding paragraph (7), the employee must obtain written approval from the Director, International (CI:OPS:I) in advance detailing the modifications to CI's policies that will be allowed. A copy of the authorizing document will be maintained both at the foreign post and in the files of the Director, International. 9. If an exigent circumstance occurs that requires the use of a GOV, which is not previously approved in writing by the Director, CI:OPS:I the employee will immediately contact the Director, CI:OPS:I or his/her designee for permission to use the GOV. If the employee is unable to contact the Director, CI:OPS:I or his/her designee, the employee may use the GOV but will notify the Director, CI:OPS:I or his/her designee, as soon as possible.

9.1.4.6 (05-30-2008)

Internal Revenue Manual - 9.1.4 Criminal Investigation Directives

Directive No. 4 - Firearms
1. The nature of CI's activities requires the ability to respond in a safe and timely manner 24 hours a day. Special agents are not expected to be armed at all times, but must have access to their assigned firearm when required to perform official duties. 2. Special agents are authorized, but are not required, to carry their IRS-issued weapon when offduty. When carrying their IRS-issued weapon off-duty, special agents are subject to all IRM provisions concerning firearms. 3. Criminal Investigation will provide each special agent with a firearms safe in the office and a safety container for home storage. 4. The Chief, CI, will ensure that each special agent has met the requirements to carry firearms. Futhermore, the Director, Field Operations and each SAC will ensure that each special agent in his/her office has met the requirements to carry firearms. 5. The SAC may authorize special agents to carry IRS-owned weapons other than the agents' assigned firearm (for example, shotguns). The SAC will notify the Director, Field Operations of such authorization within 24 hours. 6. Special agents who carry a privately-owned weapon during off-duty hours are subject to the same civil and criminal restrictions as a private citizen. Special agents may not use their position or credentials to qualify under state or local laws to purchase, license, carry, or use private weapons; however upon request, credentials may be displayed as occupational identification, but not to influence the decision.

9.1.4.7 (05-30-2008) Directive No. 5 - Physical Fitness Program
1. The physical fitness program aims to maintain and improve the fitness level of employees. It encourages lifestyle changes that increase productivity and decrease disability within the work force. Proper physical fitness conditioning is essential for special agents to be able to meet the physical demands of their law enforcement duties. 2. All special agents must participate in the physical fitness program. 3. The Chief, CI; SAC; and Director, Field Operations are responsible for executing a three-part physical fitness program: A. Part I - mandates yearly health and medical screening consisting of a health and fitness

Internal Revenue Manual - 9.1.4 Criminal Investigation Directives

questionnaire, blood work, and physicals when needed. Beginning October 1, 2007, the screening will include an annual audiogram and a lead blood test. B. Part II - requires participation in periodic fitness assessments of flexibility, strength, and aerobic capabilities. C. Part III - strongly encourages special agents to engage in an approved health and fitness improvement program. This part is not mandatory. 4. With management approval, employees who participate in an approved health and fitness improvement program will be allowed up to three hours of official duty time (non-Law Enforcement Availability Pay (LEAP) hours) per week for approved fitness activities. Designated fitness coordinators will maintain, and local management will review, records of official time used for fitness activities.

9.1.4.8 (05-30-2008) Directive No. 6 - Use Of Alcohol
1. The Treasury Employee Rules of Conduct prohibit employees from consuming intoxicants in any manner which may adversely affect their work performance (see 31 CFR §0.204). The consumption of any intoxicants prior to the end of the workday causes an adverse effect on the ability of the special agent to safely carry a firearm or operate a motor vehicle. 2. Special agents are prohibited from consuming intoxicants at any time during the workday, including mealtimes and periods of leave when the agent intends to return to duty that day. This includes hours of availability under LEAP, any other overtime hours, and any time while operating a GOV or carrying a firearm. 3. Any special agent who management reasonably believes is intoxicated or under the influence of alcohol while on official duty may be subject to alcohol testing. When ordered, an agent who refuses to report for an alcohol test or fails to cooperate with the testing process will be subject to disciplinary action, up to and including removal from the service. 4. The SAC; Director, Field Operations, or the Chief, CI may authorize exceptions to this directive for employees under their functional oversight, on a case-by-case basis, when necessary to meet operational requirements (for example, during certain undercover assignments). 5. Special agents temporarily assigned to duty that does not give them access to a firearm or to a GOV (for example, while attending training conferences) are held to the same standard as nonlaw enforcement employees, as described in the Treasury Employee Rules of Conduct, 31 CFR 0.204, which prohibits employees from consuming intoxicants in any manner which may

Internal Revenue Manual - 9.1.4 Criminal Investigation Directives

adversely affect their work performance.

9.1.4.9 (05-30-2008) Directive No. 7 - Emergency Driving
1. The goal of the emergency driving directive is to ensure the safety of special agents, other persons involved in the emergency, and the general public. A balancing test should be applied to determine whether emergency driving is warranted. Special agents must balance the need for the emergency driving with safety considerations. The directive sets out the basic standard: Special agents may engage in emergency driving situations only if the seriousness of the emergency outweighs the danger created by such driving. When engaging in emergency driving, special agents must continually evaluate the need to engage in such driving by considering safety issues. 2. When deciding whether to engage in emergency driving, special agents should consider all relevant factors including the following:
q

nature of the emergency imminent danger to the public if the suspect is not apprehended probability of apprehending the suspect at a later time traffic and road conditions weather conditions presence of pedestrians

q

q

q

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3. The emergency driving directive applies when a suspect is being followed to make an apprehension, surveillance is being conducted, or exigent circumstances exist. It encompasses driving situations in which the posted speed limit or other traffic laws are disregarded. The directive also notes that some driving maneuvers with a vehicle, referred to as offensive tactics (i.e., blocking, ramming, forcing vehicles off the road), may constitute the use of deadly force and may only be used in compliance with Treasury's Policy on the Use of Force, Treasury Order 105–12. 4. The decision to engage in or terminate emergency driving shall be made by the special agent or his/her superiors. 5. In the planning of Treasury-led joint operations involving other Federal, state, or local law enforcement agencies, each participant will be informed of the Treasury Policy on the use of

Internal Revenue Manual - 9.1.4 Criminal Investigation Directives

Force Treasury Order 105-12. 6. Criminal Investigation should review and comply with state requirements for emergency systems and equipment on vehicles engaged in emergency driving.

9.1.4.10 (05-30-2008) Directive No. 8 - Use Of Ballistic Vests During Enforcement Operations
1. All GS-1811 employees and their supervisors taking an active, participating role while conducting the following enforcement operations, should wear a ballistic vest (body armor): A. executing search warrants B. executing arrest warrants C. providing cover teams for undercover meetings D. conducting any enforcement operations or actions where there is a likelihood of an armed confrontation 2. Exceptions may be made regarding this directive on a case-by-case basis. The final judgement on whether a ballistic vest must be worn, or whether an exception will be granted, rests with the manager of the enforcement operation or the warrant team leader when a manager is not present. 3. Undercover agents will make their own decision on the use of body armor, with the concurrence of the SIT Undercover Program Manager and field office management. These issues should be discussed in detail by the undercover agent and field office management, in advance of the operation, to anticipate what action will be safest for the undercover agent. 4. The facts relating to the use of ballistic vests will be addressed in all reviews of an enforcement operation where a firearm is discharged during such enforcement operation.

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Internal Revenue Manual - 9.2.1 Training

Chapter 2. Skills and Training Section 1. Training

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9.2.1.1 OVERVIEW 9.2.1.2 National Criminal Investigation Training Academy 9.2.1.3 Special Agent Basic Training Program 9.2.1.4 Advanced Special Agent Training 9.2.1.5 Advanced and Specialized Training Programs 9.2.1.6 Management Training Programs 9.2.1.7 Program Development 9.2.1.8 Continuing Professional Education 9.2.1.9 Firearms Training and Qualification 9.2.1.10 Defensive Tactics Training 9.2.1.11 Certified Public Accountant/Attorney Professional Certifications 9.2.1.12 Continuing Personal Development 9.2.1.13 Instructor Assignments 9.2.1.14 Membership in Professional Society or Organization 9.2.1.15 Out-Service Training Exhibit 9.2.1-1 CRIMINAL INVESTIGATION SHOTGUN QUALIFICATION COURSE Exhibit 9.2.1-2 CRIMINAL INVESTIGATION SHOTGUN QUALIFICATION COURSE Exhibit 9.2.1-3 CADRE INSTRUCTOR RESUME

9.2.1.1 (05-18-2005) OVERVIEW
1. The Criminal Investigation (CI) Training Council advises the Chief, CI, on all matters relating to training. 2. The Deputy Chief, CI, and the Director, National CI Training Academy (NCITA) co-chair the Training Council. The Director, Strategy and the Director, Operations Policy and Support each assign a permanent member on the Council. The remainder of the Council consists of seven rotational members:

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one Special Agent in Charge (SAC) one representative from each field operations area, alternate rotation of three Supervisory Special Agents (SSA), and three special agents

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3. The Deputy Chief, CI, will select the SAC from nominations submitted by the Directors, Field Operations. The Directors, Field Operations may select either a SSA or a special agent to represent his/her area. 4. This section discusses the role of NCITA in preparing CI employees for their positions. The particular training programs discussed in this section are as follows:
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Basic Training Program Advanced Special Agent Training (ASAT) Advanced and Specialized Training Programs Management Training Programs Program Development Continuing Professional Education (CPE) Firearms Training and Qualification Defensive Tactics Training Certified Public Accountant (CPA)/Attorney Professional Certifications Continuing Personal Development (CPD)

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9.2.1.2 (03-31-2004) National Criminal Investigation Training Academy
1. The NCITA is located at the Federal Law Enforcement Training Center (FLETC) in Glynco, GA. The NCITA is responsible for developing and monitoring formalized training programs and onthe-job training, and for scheduling and conducting training. 2. Instruction and practical exercises are taught by NCITA instructors, field office cadre, and

Internal Revenue Manual - 9.2.1 Training

FLETC instructors, depending on the course of instruction. 3. The NCITA student honor code is based on the premise that persons aspiring to serve as Federal law enforcement officers for the IRS should exhibit the highest levels of personal conduct and integrity. The honor code prescribes that all work submitted by a student to successfully complete a NCITA training program shall be the sole product of the student. Each student has an obligation to uphold the highest standards of integrity in training and shall not tolerate dishonesty by other students at NCITA. The honor code applies not only to written examinations but also to all work performed in the graded practical exercises of a training program. Honor code violations will result in termination from training.

9.2.1.3 (03-31-2004) Special Agent Basic Training Program
1. Newly appointed special agents must satisfactorily complete the following recruit training program: A. Phase 1—Pre-Basic Orientation Training Program (PB) B. Phase 2—Criminal Investigator Training Program (CITP) C. Phase 3—Special Agent Investigative Techniques (SAIT) D. Phase 4—On-the-Job Training (OJT) 2. All new special agents (trainees) will be scheduled to attend formal classroom training at the designated reporting date established by the NCITA, consistent with the centralized hiring process. Phases 1, 2, and 3 will be run consecutively with no break between phases. The new special agent will report for duty to his/her respective field office upon successful completion of phase 3. Progression to phase 3 requires successful completion of phases 1 and 2. 3. An evaluation of the trainee's performance will be sent to the trainee's respective field office management upon successful completion of phases 1, 2, and 3. Satisfactory completion of each phase is required to retain employment as a special agent. Repetition of any phase of training or training program will be allowed only in the case of medical problem or personal emergency, and only upon the approval of the Director, NCITA, and concurrence of the Director, Strategy and the Chief, CI.

9.2.1.3.1 (03-31-2004) Pre-Basic Orientation

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1. A pre-basic orientation is conducted during the three days prior to the start of CITP. This orientation includes such topics as standards and expectations, IRS-CI organization, ethics and integrity, core values, diversity, prevention of sexual harassment, professionalism, and an introduction to the A.S.P.I.R.E (assess, set goals, plan, implement, review, and evaluate) model. All administrative personnel and relocation matters are covered in this phase of training.

9.2.1.3.2 (03-31-2004) Criminal Investigator Training Program
1. The CITP course is designed by and conducted at FLETC in Glynco, Georgia. The course educates trainees in various Federal law enforcement skills, including the fundamentals of criminal law, constitutional law, the rules of evidence and criminal procedures, trial practices, investigative techniques, vehicle operation, non-lethal control techniques, and firearms. 2. Satisfactory completion of CITP is a prerequisite for SAIT. Unsatisfactory performance in CITP will disqualify the individual from further special agent training. The course may not be repeated unless the failure to complete it was due to a medical problem or personal emergency. Repetition of the course requires the approval of the Director, NCITA, and concurrence of the Director, Strategy and the Chief, CI. 3. Special agents who have transferred from other enforcement agencies and have satisfactorily completed CITP need not repeat this training, unless their attendance is required by the Director, NCITA.

9.2.1.3.3 (03-31-2004) Special Agent Investigative Techniques
1. The first segment of SAIT is TAX–CI. A. The Tax–CI instruction consists of tax law training with an emphasis on criminal violations of the tax law. B. While delivery of the tax law training is integrated within the SAIT segment of Special Agent Basic Training (SABT) in a "just-in-time" training environment, testing is separate and distinct from the SAIT segment. By its nature, most of the tax law training will be early in the SAIT schedule. Satisfactory completion of Tax-CI is a requirement to continue in the SAIT segment of SABT. Unsatisfactory performance in Tax-CI will disqualify the trainee from further special agent training. C. As with CITP, repeating this course will only be allowed in case of a medical problem or personal emergency, and only upon the approval of the Director, NCITA, and concurrence

Internal Revenue Manual - 9.2.1 Training

of the Director, Strategy and the Chief, CI. D. The remaining portion of SAIT concentrates on developing the skills necessary to investigate potential criminal violations of Internal Revenue laws and related offenses. E. Both technical and behavioral skill development is emphasized throughout the program. Critical thinking skills with the underlying emphasis on core values drive this learnerfocused, problem solving training environment. The program is practical exercise intensive. F. The trainees "work" two tax-training investigations. Individual blocks of instruction range from the simple to the complex; from the "how-to's" of numbering an investigation to the more substantive instruction in interviewing techniques, report writing, documentation of evidence, the different methods of proving income, financial search warrants, and testifying in judicial proceedings. G. Trainees plan and conduct interviews ranging from a simple third party interview to complex subject interviews, using a wide variety of interviewing techniques. H. Detailed presentations are made relative to the specific item, net worth and bank deposit methods of proving income. I. Trainees formulate and write a detailed Special Agent's Report (SAR). Each trainee prepares many memoranda, schedules, and summaries throughout the course. J. All of these various blocks of instruction are provided to the trainees as they work two different tax investigations. The instruction is woven throughout the investigation activity in a "just-in-time" manner to enable each trainee to reinforce, through practice, what was learned in the classroom, thereby expanding the trainees' knowledge base and refining their investigative skills. K. The first tax training investigation is an administrative specific item investigation. The second tax investigation is an expansion of the first. Specifically, it is a grand jury investigation, which emphasis the indirect methods of proving unreported income. L. Instruction is provided in the hard skill areas of defensive tactics, building entry, armed escort, and additional firearms training. The defensive tactics training introduces the trainee to CI's use of force procedures and consists of classroom instruction and physical training in weaponless defensive techniques. Building entry and armed escort training have similar formats. The firearms training includes range time and simulations. M. In addition, training is provided in conducting money laundering investigations and in

Internal Revenue Manual - 9.2.1 Training

those other areas which are necessary to enable the new special agents to successfully carry out their duties and responsibilities. 2. A detailed evaluation of the trainee's performance in all segments of recruit training will be sent to the trainee's respective field office management upon successful completion of SAIT. Satisfactory completion of SAIT is required to retain employment as a special agent. Repetition of the course will be allowed only in the case of a medical problem or personal emergency, and only upon the approval of the Director, NCITA and the concurrence of the Director, Strategy and the Chief, CI.

9.2.1.3.4 (03-31-2004) On-The-Job Training
1. The purpose of the on-the-job training (OJT) program is to provide newly trained special agents the opportunity to develop investigative skills by applying the knowledge learned in CITP and SABT while encountering the challenges present in a real-life situation. The special agent OJT training program is designed to provide new special agents meaningful work assignments and assistance toward reaching a professional level of competency as quickly and efficiently as possible. The program requires that: A. every new special agent be assigned OJT investigations commensurate with his/her training ability B. every new special agent successfully complete prescribed objectives in order to complete OJT C. every new special agent trainee be assigned a qualified on-the-job instructor (OJI) to actively assist the special agent in completing OJT and reaching the full professional level D. successful performance of OJT activities be made a matter of record 2. On-the-job training is directly related to investigations and consists of a series of objectives to be completed by the special agent under the guidance of the SSA and an OJI. The objectives and guidelines for conducting on-the-job training are contained in the Special Agent On-the-Job Training Guide (Training 4136–101, TPDS 83365G). 3. On-the-job training begins as soon as a special agent successfully completes SABT. The special agent should initially be assigned relatively simple investigations using a specific item method of proof. The assignment of an investigation involving an indirect method of proof will require the OJI to work more closely with the special agent and provide more guidance than normal. This additional support should continue until the special agent has progressed to the point that additional help is no longer necessary.

Internal Revenue Manual - 9.2.1 Training

Note:
The special agent will then continue with OJT under the direct supervision of the OJI and the SSA until the objectives set forth in training progress record of the OJT training guide are successfully accomplished. Performance of OJT activities will be made a matter of record by the OJI. 4. The OJT will be completed when the objectives in the training progress record have been accomplished and the special agent has demonstrated to his/her OJI and SSA that he/she is capable of working independently. Although there is no rigid time limit set for the completion of OJT, the first 12 objectives in the training progress record are to be satisfactorily accomplished before the special agent is eligible for promotion to grade GS–11 (or the next higher grade for a IRS employee who has reached GS–11 at the time of transfer into CI).

9.2.1.3.4.1 (03-31-2004) Responsibility for On-The-Job Training
1. Each SAC is responsible for seeing that OJT is provided to special agent recruits and any special agents in need of such training, as well as the continued evaluation of the program. 2. The SAC is responsible for ensuring that all SSAs under his/her supervision provide an effective OJT program for trainees. The SAC is also responsible for certifying the completion of OJT for trainees in his/her field office. 3. The SSA is responsible for providing all special agent trainees under his/her supervision with an effective OJT program. The SSA is responsible for the following: A. Assigning a qualified OJI to assist the special agent with the necessary OJT. B. Assigning investigations and other OJT activities commensurate with the special agent's training and ability. C. Ensuring that the new special agent is provided all necessary assistance toward completing the OJT objectives and reaching a professional level of competency as quickly and efficiently as possible. D. Providing the OJI adequate time to fulfill his/her training responsibility to the special agent.

Note:

Internal Revenue Manual - 9.2.1 Training

On an average, 30–50% of the OJI's time is needed for each special agent. E. Reviewing and evaluating the accomplishments and progress of the special agent quarterly. F. Notifying the SAC when the special agent has successfully completed OJT.

9.2.1.3.4.2 (03-31-2004) Selection of On-The-Job Instructors
1. On-the-job instructors will be competitively selected and should possess the following qualities: A. an interest in serving as an instructor B. a high level of job performance and technical competence C. an ability to communicate effectively D. leadership and the ability to motivate others E. dependability F. self-confidence G. initiative H. the ability to use good judgment and make sound decisions I. the ability to meet and deal with various personality types 2. The success of the OJT program depends heavily upon the combined support of management and the quality of instruction that the special agents receive from their OJI. Consequently, management should ensure the most effective program possible by: A. selecting only the most qualified special agents to become OJIs B. ensuring that all OJIs receive training in the OJI Workshop C. reducing or adjusting workloads to provide the OJI's the necessary time and opportunity to fulfill their training responsibilities

Internal Revenue Manual - 9.2.1 Training

Note:
On average 30–50% of the OJI's time will be needed for each special agent D. evaluating OJIs on their performance, as part of the regular special agent evaluation process E. promoting the position of OJI as a developmental assignment to which special agents should aspire

9.2.1.4 (03-31-2004) Advanced Special Agent Training
1. Advanced Special Agent Training (ASAT) is an 81/2 day mandatory training course for GS-1811s Grades 12/13 special agents who have at least 8 years of experience as a special agent. Topics covered include: A. advanced material on innovative financial investigative techniques B. indirect methods C. international investigations D. terrorism financing/USA Patriot Act, E. forensics F. current issues in tax crimes G. advanced interviewing techniques H. asset forfeiture/money laundering I. search warrants J. core values K. enforcement operations 2. The course is presented in a seminar format and emphasizes participant involvement in class

Internal Revenue Manual - 9.2.1 Training

discussions and numerous practical exercises.

9.2.1.5 (03-31-2004) Advanced and Specialized Training Programs
1. The NCITA is responsible for developing and presenting programs to meet these needs. Current programs include: A. Defensive Tactics Instructor Training Basic and Refresher B. Money Laundering Expert Witness Seminar (MLEWS) C. Basic Instructor/Facilitator Training (BIFT) D. Firearms Instructor Training, Basic and Refresher E. Advanced Law Enforcement Photography Training Program (ALEPTP) F. Technical Investigative Equipment Training Program (TIETP) G. Law Enforcement Spanish Training Program, Basic and Advanced H. Physical Fitness Coordinator Training Program, Basic and Refresher I. Criminal Intelligence Analyst Training Program (CIATP) J. Building Entry Instructor Training (BEIT)

9.2.1.6 (03-31-2004) Management Training Programs
1. The Chief, CI is responsible for identifying nationwide needs for entry, mid-level, and top-level training, as well as Continuing Management Education (CME) for CI management personnel. 2. The NCITA is responsible for coordinating and developing programs to meet management training needs identified by the Chief, CI. These include the following: A. Core Entry Level Supervisory Special Agent Training Program B. Entry-Level Supervisory Special Agent Seminar

Internal Revenue Manual - 9.2.1 Training

C. Mid/Top-Level Supervisory Special Agent Seminar D. Senior Supervisory Special Agent Seminar (CME training) 3. Directors, Field Operations are responsible for providing qualified first, mid, and top-level SSAs as facilitators for all phases of CI, SSA training.

9.2.1.7 (03-31-2004) Program Development
1. The Chief, CI is responsible for identifying nationwide needs for specialized and advanced training of CI personnel. The NCITA is responsible for developing and presenting programs to meet those needs. Current programs include: A. Defensive Tactics Instructor Training (DTIT) B. Advanced Seized Computer and Evidence Recovery Specialist Training (ASCERS) C. Money Laundering Expert Witness Training D. Basic Instructor/Facilitator Training (BIFT) E. Computer Investigative Specialist Training (CIS) 2. The areas and field offices are responsible for identifying local specialized training needs. The NCITA is responsible for conducting training, when appropriate, and arranging for the attendance of special agents in the following training programs not conducted by IRS: A. Firearms Instructor Training, Basic and Refresher B. Advanced Law Enforcement Photography School C. Technical Investigative Equipment Training D. Law Enforcement Spanish Training E. Physical Fitness Program Coordinator Training F. Criminal Intelligence Analyst Training

Internal Revenue Manual - 9.2.1 Training

G. other courses offered at FLETC

9.2.1.8 (03-31-2004) Continuing Professional Education
1. Topics for CPE are developed by NCITA, with assistance from HQ and field office personnel. The CI Training Council will determine or concur on the topics for each fiscal year. Certain topics may be designated as mandatory while others may be selected at the option of the area or field office to meet local training needs. Area or field offices may develop other subjects to fill local needs. One copy of all locally developed material will be forwarded to the Director, NCITA.

9.2.1.8.1 (03-31-2004) Continuing Professional Education Materials and Scheduling
1. Continuing Professional Education topics will be distributed throughout the fiscal year on the CI Web. 2. Any locally developed material must be obtained from the developer. 3. Scheduling of CPE can be accomplished anytime during the fiscal year. 4. Each field office is authorized to conduct an off-site CPE every other year. Off-site CPEs for CI employees provide value to our workforce, not only through the presentation and discussion of the CPE curriculum, but through the benefit of the SAC and management team being able to address the entire field office formally and informally at one time in one location. Many field offices are geographically spread to the extent that it is difficult and expensive to assemble all CI employees in one location with the exception of CPE. 5. The Director, Field Operations will be responsible for ensuring that roughly half of their field offices conduct an off-site CPE each year. All CPE requests will initially be routed through the Supervisory Human Resources Specialist, for concurrence, and then to the area Director, Field Operations, for approval. 6. An off-site CPE can be authorized by the Chief/Deputy Chief, CI, during any fiscal year if extraordinary events create a necessity for the SAC to gather all staff together. The Chief/Deputy Chief, CI, can authorize off-site CPEs when a newly selected SAC elects to utilize CPE for a team building session. The Chief, CI, can approve a CPE location outside of the geographical boundaries of the field office (for example, where two field office's combine to conduct a joint CPE, thereby saving instructor and speaker expenses).

Internal Revenue Manual - 9.2.1 Training

7. An off-site CPE is defined as one taking place at a venue within the geographical confines of the field office’s boundaries but outside of the SAC's office commuting area. Procedures for requesting off-site facilities for training events will be followed when determining the viability of a proposed CPE venue. These procedures can be found on the IRS Human Capital Office Web site. 8. Internal Revenue Manual IRM 6.410.2, Selection of Locations and Facilities for IRS Off-Site Training provides appropriate guidelines that should be applied to meetings and conferences. Government facilities will be used for training when such facilities are available and adequate. Form 10416, Approval Request for Use of Off-Site Training Facilities must be completed in connection with a request for off-site CPE and approved by the Director, NCITA or the Supervisory Human Resource Development Specialist, NCITA. 9. Perception must always be a consideration by IRS managers and executives when planning offsite meetings. Under no circumstances, regardless of relative cost, availability, or other considerations, should meetings be held in locations that might be considered "resort" locations. 10. During the CPE cycle when training is not conducted off-site, it will be conducted in the commuting area of the SAC's location, or through local training at the field office's larger duty posts.

9.2.1.9 (03-22-2005) Firearms Training and Qualification
1. Before special agents are authorized to carry or use any IRS-owned weapon, they must successfully complete firearms training provided during the CITP at FLETC. Thereafter, special agents assigned either to a field office or HQ must successfully complete firearms training during quarterly firearms training in the field office or HQ. Special agents must also have successfully demonstrated proficiency with their weapon and achieved a qualifying score within the time limits specified in subsection (3) below for handguns. Special agents must also perform the requirements set forth in subsection (9) below for shotguns. 2. All special agents must have their badge and pocket commission on their person when carrying a firearm, except under unusual circumstances relating to special assignments with the approval of the SAC. The SSA must be assured that each special agent is clearly familiar with Treasury policy and guidelines for weapons use. 3. All special agents shall meet the following standards regarding their assigned IRS-issued firearm (items a & b below) and receive the following training/briefings (items c through e below) each fiscal year: A. Engage in handgun firing at least once each quarter (10/1 to 12/31, 1/1 to 3/31, 4/1 to 6/30,

Internal Revenue Manual - 9.2.1 Training

and 7/1 to 9/30). Under unusual circumstances, fire a qualifying score with a weapon that is the same model and caliber as their assigned weapon. B. Fire a qualifying score in two non-consecutive quarters (10/1 to 12/31 and 4/1 to 6/30; 10/1 to 12/31 and 7/1 to 9/30; or 1/1 to 3/31 and 7/1 to 9/30). C. As part of the CI Mandatory Briefings, be briefed on the Department of the Treasury Firearms Safety and Security Policy and CI’s directives and procedures on the safe handling and storage of firearms. Special agents shall also sign the appropriate certifications upon completing the briefings. D. A briefing each quarter regarding the policy of discharging their weapon at a moving vehicle see IRM 9.2.3, Use of Force Procedures. 4. See IRM 9.2.1.9 (3) for special agents who do not comply with the requirements in above, either due to a failure to qualify or a failure to participate, must surrender their IRS-issued weapon to the appropriate head of office, or designee, until they meet the stated requirements. 5. All special agents will be required to qualify at least once each year with all holsters they are approved to carry. Special Agents in Charge will be the approving officials for any carrying device other than the standard strong-side hip holster. All holsters must conform to requirements set forth in IRM 9.11.3 Investigative Property. In situations that require an unusual method of carry, such as an undercover operation, special agents must demonstrate to a CI firearms instructor that they are proficient in this method of carry. 6. All special agents will qualify at least once each year wearing tactical equipment, including ballistic vests, tactical holsters, and raid jackets. In addition, all special agents will qualify at least once each year with their weapon concealed under business attire. 7. Special agents generally will be limited to two attempts to qualify on any given day. This does not preclude a practice course beforehand. If special agents fail to qualify, they may fire a maximum of two additional qualification courses that day only if: A. they receive instruction after the first two courses, and B. the firearms instructor in charge believes the special agents are ready to qualify 8. Subject to approval by the SAC; Director, Field Operations; or HQ Directors, special agents with a temporary physical condition (including pregnancy) that prevents participation in firearms training may be excused by submitting documentation of their medical condition to their head of office. Special agents must surrender their IRS-issued weapon to their SAC, or designee, until they meet the qualification standards.

Internal Revenue Manual - 9.2.1 Training

9. All special agents must participate in semi-annual shotgun training. This training consists of weapon function, operation, safe handling, and firing at the NCITA approved qualification course ( see Exhibit 9.2.1-1.). Only those individuals who score a 75 or higher within the last 6 months and demonstrate proficiency with the weapon will qualify to carry the shotgun on enforcement operations. Proficiency, in this regard, will be based on a demonstration of safe and effective use of the weapon as determined by appropriate field office firearms instructors. Additional shotgun training can be made available at the discretion of the SAC. 10. Special agents are encouraged to use range facilities outside regular duty hours to maintain or improve their firearms proficiency. Within reason, the IRS will make ammunition available for this purpose. 11. Special agents engaged in firearms practice are considered to be in the performance of their official duties under the Federal Employees Compensation Act provided they use a IRS-issued weapon and ammunition. All practice will be conducted with the concurrence of the appropriate firearms instructor and the approval of the special agent's immediate manager. 12. Because it promotes increased skill with firearms, participation in pistol shooting competitions is viewed as an extension of CI’s policy regarding approved firearms practice. Expenses incurred as a result of participation by special agents in such competitions may be paid or reimbursed by CI if such participation is in the interest of the IRS. 13. All special agents engaged in firearms practice and qualification must wear CI issued eye and ear protection: A. Eye protection must have "side panels." If side panels are issued by CI for prescription eyewear, the special agent is in compliance with "CI issued eye protection." B. Firearms qualifications and tactical training using duty ammunition require the use of eye and ear protection. C. All special agents serving as firearms instructors will wear both earplug and outer muffler protection. D. Mandatory protection for participants in force-on-force training with FX marking cartridges (simulations) is eye, face, and throat protection. E. Hand, chest, and groin protection are also recommended for simulations training.

Note:

Internal Revenue Manual - 9.2.1 Training

Simulations weapons should be treated as live weapons and a firearms instructor should review all scenarios for safety purposes. 14. In addition, any injuries incurred during use of force training that require medical attention must be promptly reported via memorandum to the National Use of Force Program Manager through the Director, NCITA. 15. All special agent qualification scores and other related firearms training information will be recorded and maintained by field office use of force coordinators. These records will be forwarded at the end of each fiscal year to the National Use of Force Program Manager through the Director, NCITA. These records must include the special agent’s name, date, weapon used, course fired, score, and ammunition used. 16. The minimum qualification score is 75. The following levels of proficiency are based on qualifying scores obtained during completion of the CI Pistol Qualification Course: A. Sharpshooter Expert Distinguished Expert 90-94 95-99 100

17. Certificates may be awarded for each level of proficiency once in every 5-year period. Sharpshooter and expert certificates will be issued with the approval of the SAC; Director, Field Operations; or HQ Director. Requests for distinguished expert certificates and metallic pins should be forwarded through the appropriate channels for signature by the Chief, CI. 18. Criminal Investigation firearms instructors must successfully complete the FLETC's Firearms Instructor Training Program (FITP). Equivalent training can be completed in lieu of FITP but must be approved in advance by the National Use of Force Program Manager at the NCITA.

9.2.1.10 (03-31-2004) Defensive Tactics Training
1. In accordance with CI Directive No. 1 – Enforcement Operations ( IRM 9.1.4, Criminal Investigation Directives and Delegation Orders), all special agents must attend defensive tactics training, which will be included in quarterly use of force training sessions. Field offices will conduct annual training based on the annual defensive tactics training checklist distributed by NCITA. The field office use of force coordinator will keep records of attendance of all special agents who attend such training and the subjects presented for a period of 3 years.

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2. Each special agent must successfully complete an annual defensive tactics skills assessment from NCITA. This assessment consists of a practical demonstration of skills and a written examination. Each special agent must achieve a minimum 70% score on each part of the examination. Remedial training will be provided to those who fail to achieve the minimum score. 3. The field office use of force coordinator will keep a record of all special agents who have successfully completed the assessment and will notify the SSA of any special agent who does not successfully complete the assessment. The SSA may consider an unsuccessful assessment when evaluating the special agent. Absence from defensive tactics training must be authorized by the SAC, and a record of the authorization shall be maintained by the use of force coordinator. The record will reflect the reason for the absence and the date the SAC authorized the absence. 4. Special agents injured during defensive tactics training or assessments are considered to be in the performance of their official duties under the Federal Employees Compensation Act. Injuries incurred during defensive tactics training or assessments must be reported to the Director, NCITA, Attention: National Use of Force Program Manager. A memorandum will be prepared by the use of force coordinator that will contain a brief report of the injury and activities leading to the injury. The memorandum will be approved by the injured employee's SSA and forwarded to the Director, NCITA.

Note:
The head of office will ensure that injured employees review the guide to workers compensation procedures (http://erc.web.irs.gov) for action deemed appropriate as determined by the employee.

9.2.1.11 (03-31-2004) Certified Public Accountant/Attorney Professional Certifications
1. The IRS has long recognized the value of having employees who hold professional licenses such as CPAs and attorneys in technical positions, including the special agent position. Aside from the direct benefit of improving the individual special agents’ knowledge of accounting and law, both CI and the IRS benefit from an enhanced public image and credibility with the public, juries, and the legal and accounting professions from having employees who hold such professional licenses.

9.2.1.11.1 (03-31-2004) Examination Review Courses
1. As authorized in IRM 6.410.1, Learning and Education Policy, the IRS will reimburse employees for CPA and bar examination review courses when the course content relates to the performance of the employee's official duties.

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2. Administrative leave will not be granted to attend these examination review courses but may be granted for the purpose of taking the CPA or Bar examination.

9.2.1.11.2 (03-31-2004) Maintenance of Professional Certifications
1. State licensing agencies have varying continuing professional education which are required for those CPAs and/or attorneys who wish to maintain their professional licenses. In recognition of the benefits of having special agents who hold these professional licenses, official time will be granted to special agents attending qualifying CPE as long as the training has a nexus to the special agent’s official duties, as required for all out-service training. Up to 32 hours of excused absence may be granted for attending those CPEs necessary to maintain professional licenses. 2. Subject to the availability of funds, CI field offices may pay the cost of qualifying out-service training or correspondence courses as long as they have a nexus to the special agent’s official duties. Travel outside the local commuting area would normally not be reimbursed if similar training which satisfies the applicable requirements is available in the local area. 3. Criminal Investigation will pay for the cost of CPE Direct (CPA re-certification in a correspondence course format) for special agents who hold professional licenses as CPAs. 4. Criminal Investigation will seek the concurrence of other operating divisions to allow special agents to attend training conducted by other operating divisions that qualifies for CPA and Bar recertification credit. 5. The NCITA will seek accreditation of qualifying CI continuing professional education courses for CPA and Bar re-certification purposes.

9.2.1.12 (03-31-2004) Continuing Personal Development
1. As workload demands allow, CI will accommodate employees who request excused absence (administrative leave) in order to continue their personal development or to attend/participate in events sanctioned by management. The Continuing Personal Development (CPD) program applies to activities when an employee is: A. representing the IRS at a conference, training event, or as part of a delegation B. attending out-service training for his/her personal development

Internal Revenue Manual - 9.2.1 Training

C. attending a sanctioned activity not as an official representative of the agency but for his/her own personal development 2. The goal of the CPD program is to ensure every employee has an equal opportunity to develop and take on more challenging assignments. All CI employees, regardless of series, grade, gender, or geographic location, are eligible to participate in the CPD program. 3. Every CI employee will be allotted 24 hours of excused absence (administrative leave) during the fiscal year for his/her personal development. The allotted hours must be requested and used during the fiscal year or forfeited. 4. This time is to be used to take courses or attend conferences, meetings, training, and other events which will aid the employee in improving efficiency on the job, enhancing value to the IRS, and/or demonstrating proficiency in law enforcement activities. The activity or training must be consistent with the goals, mission, and/or stated policies of the IRS or CI. Authorized activities include courses provided by accredited/licensed colleges, universities, or technical training facilities; adult education courses provided by local school districts; sanctioned conventions, seminars, and workshops where the employee is not attending as a representative of CI on official business; CPEs required to maintain licenses; charitable events such as the Law Enforcement Officers Torch Run, and other events which allow special agents to demonstrate prowess in activities that are part of CI’s Health Improvement Program or directly related to the work of a law enforcement officer. 5. When holding a license or professional credential is beneficial to CI or the IRS, and more than 24 hours of CPE is required to retain the license or credential (e.g., CPE to retain one’s license as a CPA), additional time not to exceed 8 hours may be approved in order to complete the CPE. However, no employee may have more than 32 CPD hours in a fiscal year. 6. Excused absence under the CPD program will not be granted for formal training provided as a requisite for equipping an employee to perform assigned duties at an acceptable level of competence; conferences and training sessions attended as CI’s representative in either an instructor or attendee mode; annual conferences and training sessions sponsored by recognized employee organizations (REO) when the employee is CI’s representative attending in an official business status; or any other recreational events. 7. The employee's immediate manager approves all CPD leave requests. The manager is responsible for tracking the CPD leave taken by the employee during the fiscal year. 8. The employee request must include the following information: A. name of sponsoring organization

Internal Revenue Manual - 9.2.1 Training

B. type of activity to be attended C. why attendance meets the criteria of the CPD Program 9. Other legally permissible participation, not addressed herein, may be referred to the respective Director, Field Operations for consideration on a case by case basis. The Director, Human Resources, is authorized to resolve any issue concerning the CPD program.

9.2.1.12.1 (03-31-2004) Qualifying Organizations
1. The CPD program covers employee participation in activities, conferences, and training sessions sponsored by the following: A. Organizations, associations, fellowships, or any chapters thereof, whose membership is exclusively or predominantly composed of current IRS employees and organizations that represent minority groups, also known as Recognized Employee Organizations (REOs). Some of the organizations recognized by the IRS as meeting this definition are the Association for the Improvement of Minorities (AIM-IRS), Hispanic Internal Revenue Employees (HIRE), Asian Pacific Internal Revenue Employees (ASPIRE), and Gay, Lesbian or Bisexual, Transgender Employees (GLOBE). B. Organizations that are principally composed of law enforcement employees. These organizations may represent professional, social, or fraternal interests; the interests of minorities, women, or persons with disabilities; or civic, consumer, or charitable interests (e.g., Women in Federal Law Enforcement, the National Organization of Black Law Enforcement Executives, and the Hispanic American Police Command Officers Association). C. Organizations that are principally composed of employees classified to a specialty occupation that supports law enforcement employees (e.g., Fingerprint Analyst, Forensic Specialist, Information Technology Specialist, Physical Scientist, etc.). Such organizations may represent professional, social, or fraternal interests; the interests of minorities, women, or persons with disabilities; or civic, consumer, or charitable interests. D. External training/individual development opportunities which include those courses required to maintain professional certifications or to enhance one’s ability to perform his/her job. Such training typically is obtained from those colleges, universities, and professional organizations which provide career and personal development to adults. 2. The opportunity to attend the annual conference/training session sponsored by the organizations

Internal Revenue Manual - 9.2.1 Training

cited in IRM 9.2.1 will be afforded to at least one person from each field office provided: A. Funding is available. B. The REO sponsored conference/training meets the requirements stated in the Chief, Human Resource Officer’s Guidance on Support for REO Conferences and Training Events. (Additional information regarding attendance at these activities may be obtained from CI’s Human Resources Office and CI’s Office of Equal Employment Opportunity and Diversity.) 3. In order to be covered by the CPD guidelines, an organization must ensure that its activities are conducted in a manner that does not undermine the efficient and effective operation of the IRS. With respect to any specific request for permission to participate, the organization or requesting member must also demonstrate that the IRS will derive a benefit from providing support to, or permitting employees to participate in, those activities sponsored by the organization. In addition, the organization must: A. be a lawful, nonprofit organization or an accredited/licensed college, university, or technical training facility B. be sanctioned by the IRS or the Director, Strategy C. not discriminate in terms of membership or treatment because of race, color, religion, sex, sexual orientation, national origin, age, or handicapped condition; or otherwise support such discrimination D. not assist or participate in a strike, work stoppage, or slowdown against the government of the United States, or any agency thereof, or impose a duty or obligation to conduct, assist, or participate in any such strike, work stoppage, or slowdown E. not advocate the overthrow of the constitutional form of government of the United States 4. Management should ensure that an employee’s attendance at an activity/event would benefit the IRS or CI either directly or indirectly. In determining whether CI will derive a benefit in any specific instance, management may consider, among other things, the goals, objectives, and overall mission of the organization pursuant to CI's mission and programs. When the event is a charitable or athletic activity, participation is limited to the approved activities set forth in the Health Improvement Program or those that demonstrate prowess with a law enforcement tool (e.g., pistol, shotgun, automobile, etc.) 5. Employees may not be authorized funding, nor be excused from duty, to participate in events sponsored by organizations that fail to meet the eligibility standards cited above.

Internal Revenue Manual - 9.2.1 Training

9.2.1.12.2 (03-31-2004) Employees Attending Conferences and Meetings in an Official Capacity
1. Employees will be granted official time to attend conferences and meetings when they are designated as the IRS or CI representative at these activities. Examples of covered persons are: A. instructors, speakers, or participants in a panel discussion, delegation, or honor detail B. students at out-service training approved by management as job related and capable of enhancing employee productivity C. persons whose program responsibilities justify attendance 2. Employees attending an activity in an official capacity will not have the time charged against their personal development hours and: A. are entitled to travel and per diem costs B. if authorized, may use a government owned vehicle (GOV) to travel to and from the activity C. are excused from work without charge to personal leave 3. Some situations may warrant granting official time only for the periods of the activity when the employee is specifically representing CI or the IRS rather than granting official time for the entire event. Employees receiving official time may request annual leave or leave without pay (LWOP) for periods not covered by official time. 4. Travel and per diem expenses will be paid when the employee is traveling on official duty. Employees attending an authorized activity under this provision must have out-service training approvals or authorization for program travel. Employees who are not on official duty for the entire event/activity are not entitled to use a GOV for the trip. 5. A limited amount of training funds may be allocated to employees attending conferences in other than an official capacity that are sponsored by the REOs. For a listing of the REOs see IRM 9.2.1.12.1. Criminal Investigation may not exceed one-half of one percent (.5 percent) of its annual training budget allocation in support of these attendees. In order for management to approve the expenditure of funds for attendance, it must be demonstrated the REO conference will provide training that will enhance an employee’s ability to perform his/her official duties or

Internal Revenue Manual - 9.2.1 Training

prepare him/her for other career opportunities. Attendance at a health improvement or athletic event may not be charged to training funds. 6. Decisions regarding the commitment of other resources, such as personnel to work on a committee planning a charitable event (the Law Enforcement Torch Run, etc.) or space to hold a meeting for a specialty group (the National Organization of Black Law Enforcement Executives, Women in Federal Law Enforcement Inc., etc.), may be made by SACs and HQ Directors on a case by case basis.

9.2.1.12.3 (03-31-2004) Employees Attending Conferences and Meetings not in an Official Capacity
1. Those employees who are not attending a conference or training seminar in an official capacity may be granted administrative leave to attend. Approved hours should be applied against the 24 hours in the employees’ personal development account. 2. Administrative leave for attendance at a conference, convention, seminar, meeting, or athletic event may be authorized only when all of the following criteria are met: A. attendance will directly benefit the IRS or CI mission B. attendance will enhance an employee’s self-development and skills C. there is a direct relationship between the purpose for the activity, the conference agenda items, or the athletic activity and the employee’s job responsibilities 3. The SACs and HQ Directors are responsible for determining the appropriate use of administrative leave to be granted to an employee attending any such activity in a non-official capacity. This authority may be redelegated to any manager. Managerial approval of administrative leave should be carefully weighed in light of workload considerations and the extent to which the agenda/activities meet the conditions listed above. The amount of administrative leave to be authorized must be justified by the benefits to be obtained by the IRS. 4. In some instances, it may be permissible to grant administrative leave to attend, but only for the portion of the conference/event that is related to law enforcement work, activities, skills sets, etc. Employees may request annual leave or LWOP to cover attendance at portions of an activity not covered by administrative leave. 5. Travel and per diem expenses will not be paid for employees who are not traveling on official duty. Expenses may be covered for certain work-related portions of an activity while other non

Internal Revenue Manual - 9.2.1 Training

work-related portions may not. Employees who attend an event/activity under split coverage (i.e., part of the event/activity is covered by official time and the other portion is attended on CPD or personal leave) are not entitled to use of a GOV for the trip.

9.2.1.13 (03-31-2004) Instructor Assignments
1. Certified instructors assigned to conduct training outside their normal commuting area will receive a retention allowance of six percent of basic pay during qualified instruction time, if the duration of the training assignment and any related preparation time exceeds two continuous weeks. 2. The retention allowance includes, but is not limited to, the following CI training programs: A. Basic Training Cadre Instructors B. Temporary FLETC Cadre C. Advanced Training Instructors for Basic Instructor/Facilitator Training (BIFT), Advance Special Agent Training (ASAT), Tax Fraud Investigative Aide, Lead Development Center and Fraud Detection Center courses, Defensive Tactics courses, Entry Level and Senior Level Management courses, Electronic Crimes courses, and International training 3. This allowance is not applicable to assignments to task forces rewriting training materials, nor does it include training professionals. 4. A certified instructor is an instructor who has been competitively selected and successfully completed instructor training (the BIFT program conducted by NCITA) or past attendance at an IRS or FLETC sponsored instructor training class. 5. Training instructors positions are filled using one of two methods in a competitive selection process. A. The first selection method is initiated by a notification to CI's area training coordinators of a training opportunity open to all qualified CI employees. Interested and qualified candidates will then submit a standard resume ( see Exhibit 9.2.1-3.) the applicant prepared to which the management approval is attached. The resumes are sent to the NCITA for evaluation and selection and will be ranked based on the needs of the class being taught and equal extension of training opportunities throughout each area. The Director, NCITA will be the selection official for all NCITA sponsored classes. The Deputy Director, Electronic Crimes will be the selecting official for all Electronic Crimes training.

Internal Revenue Manual - 9.2.1 Training

B. The second selecting method involves a directed assignment of an instructor to a particular area (i.e., DT Cadre). The area coordinator will forward this request to the field offices. The SACs will forward their nominees to the Director, Field Operations for final selection. The area coordinator will then notify NCITA of the selection.

9.2.1.14 (03-31-2004) Membership in Professional Society or Organization
1. If the IRS requires an employee to be a member of a professional society or organization as a condition of continued employment, the IRS will reimburse the employee for the costs of such membership subject to the availability of funding.

9.2.1.15 (03-31-2004) Out-Service Training
1. Out-service training is non-IRS training and includes meetings, conferences, seminars, and symposia. The training must be designed to improve public service, achieve dollar savings, increase employee skills and efficiency, enhance employee retention, accomplish uniform administration of training consistent with the IRS mission, and ensure fair and equitable treatment of employees. 2. Out-service training authorization is obtained by completion of SF-182, Request Authorization Agreement and Authorization of Training. Whenever possible, payment for the training should be made with the Government Purchase Card. 3. The following approvals are required for Form SF-182: A. immediate supervisor (Item 26) B. secondary supervisor (Item 27) C. Supervisory Human Resource Development Specialist at the CI National Training Academy (Item 28) D. budget analyst (Item 29) 4. Subsequent to the completion of training the employee must complete Section C- Termination and Evaluation Data (Items 21 - 43) and the immediate supervisor must complete Section DSupervisory Comments (Items 44 - 48).

Internal Revenue Manual - 9.2.1 Training

Exhibit 9.2.1-1 (03-31-2004) CRIMINAL INVESTIGATION SHOTGUN QUALIFICATION COURSE
Administrative Guidelines This is a 12–round course of fire shot on the B21PC target. The course tests the overall weapon handling ability of the special agent by using multiple targets and short time sequences at each stage of fire. The course is fired only with standard duty loads of Rifled Slug and .00 Buck rounds (9 or 12 pellet rounds may be used). The course is fired in three stages at 7, 15, and 25 yards, and the shooter must engage two targets during each stage. Special agents should be instructed to carry their rounds in a pocket or ammunition carrier and to do all loading from the same. This will be the manner in which they will carry ammunition in the field and should train for it. The special agents should also be told that the starting position with the weapon is in three different conditions from the 25–yards stage using Condition Three to the 7–yard stage where Condition One is used. (See Exhibit 9.2.2–2). Scoring: Maximum score is 100 points Seven points for each slug hit on the silhouette. One point for each .00 Buck pellet hit (9 pellet round). 3/4th of a point for each .00 Buck pellet hit (12 pellet round). Passing score is 75 points Sharpshooter 90 – 94 Expert 95 – 99 Distinguished Expert 100

Exhibit 9.2.1-2 (01-23-2001) CRIMINAL INVESTIGATION SHOTGUN QUALIFICATION COURSE
Equipment and Supplies: 1. Shotgun: Remington Model 870 or 11–87 2. Ammunition: 4 rounds rifled slug, 8 rounds .00 buckshot (9 or 12 pellet rounds) 3. Target: B21PC modified

Internal Revenue Manual - 9.2.1 Training

Safety on, gun cocked and locked. Load two rounds in magazine, come to ready position. On the command to fire, you have 20 seconds to 4 – Rifled Slug Course of Fire 25 yards chamber and fire one round at each of two targets. Then combat reload two rounds and again fire one round at each target. Entire sequence – 20 seconds. Safety off, gun uncocked and unlocked. Load four rounds of .00 buckshot in the magazine, no round chambered, slide forward, come to the ready position. On the command to fire, 15 yards you have 7 seconds to chamber and fire one shot at the first target, two shots at the second target, and one shot at the first target. Entire sequence – 7 seconds. Safety off, load four rounds of .00 buckshot and chamber. Come to the ready position. This stage will be fired in two sequences. 7 yards On the command, fire one shot at each of your two targets in 2 seconds. Repeat this sequence for the last two rounds. Unload and leave action open.

Exhibit 9.2.1-3 (03-31-2004)

Internal Revenue Manual - 9.2.1 Training

CADRE INSTRUCTOR RESUME
Full Name: Series/Grade: /POD: Assignment Requested: Date BIFT Completed Brief Overview of Specialized Skills relative to the requested assignment: Most Recent Instructor Assignment(s): Other Prior Instructor Assignments: Management Certification: SSA ASAC SAC More Internal Revenue Manual Accessibility | Freedom of Information Act | Important Links | IRS Privacy Policy | USA.gov | U.S. Treasury

Internal Revenue Manual - 9.2.2 Physical Fitness Program

Chapter 2. Skills and Training Section 2. Physical Fitness Program

9.2.2 Physical Fitness Program
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9.2.2.1 9.2.2.2 9.2.2.3 9.2.2.4 9.2.2.5

OVERVIEW AUTHORIZATION GUIDELINES FOR OFFICIAL TIME AUTHORIZED PROGRAM ACTIVITIES RESPONSIBILITIES

9.2.2.1 (05-18-2005) OVERVIEW
1. Effective March 31, 1993, participation in a Criminal Investigation (CI) Physical Fitness Program (PFP) became mandatory for all GS–1811 special agent personnel. All special agents must undergo medical screening and, after receiving a medical clearance, must also participate in fitness assessments. Additionally, while not mandatory, all GS–1811 personnel are strongly encouraged to engage in an approved health and fitness improvement program. Physical Fitness Program Guidelines are found in the Physical Fitness for Special Agents Handbook. The following topics are covered in this section:
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9.2.2.2 (05-28-2004) AUTHORIZATION
1. Criminal Investigation Directives Nos. 3 and 5 provide for participation in the PFP and the use of a government vehicle to travel to a physical fitness facility during official duty hours.

Internal Revenue Manual - 9.2.2 Physical Fitness Program

9.2.2.2.1 (05-28-2004) Criminal Investigation Directive No. 5 - Physical Fitness Program
1. The physical fitness program aims to maintain and improve the fitness level of employees. It encourages life-style changes that increase productivity within the work force. Proper fitness conditioning is essential for special agents to be able to meet the physical demands of their law enforcement duties. 2. All special agents must participate in the physical fitness program. 3. Each head of office will establish and support a physical fitness program for all special agents in his/her office. Each Special Agent in Charge (SAC); Director, Field Operations; and the Chief, CI, are responsible for executing a three-part physical fitness program: A. Part I - mandates yearly health and medical screening consisting of a health and fitness questionnaire, blood analysis, and physicals B. Part II - requires participation in periodic fitness assessments of flexibility, strength, and aerobic capabilities C. Part III - while not mandatory, strongly encourages special agents to engage in an approved health and fitness improvement program 4. Special agents who participate in an approved health and fitness improvement or maintenance program will be allowed up to three hours of official on-duty time (non-law enforcement availability pay (LEAP) hours) per week for approved fitness activities. Designated Physical Fitness (PFP) Coordinators will maintain and local management will review records of official time charged to fitness activities.

9.2.2.2.2 (02-09-2005) Use of Government-Owned Vehicles - Physical Fitness Program
1. Special agents are authorized to drive a government vehicle during official duty hours, to a fitness facility to participate in the PFP. (Criminal Investigation Directive No. 3, IRM 9.1.4) 2. Special agents are allowed to use a government-owned vehicle to drive to a workout facility before or after the core-hour day as an extension of the core-hour day. This is allowed provided the special agent goes directly from his/her residence to the workout facility/area and then to the work station (mornings) or directly from the workstation to the workout facility/area and then to

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his/her residence or back to the workstation. 3. The Special agents are also authorized to use the government-owned vehicle during their corehours, provided they go directly from their workstation to the workout facility/area and then return to the work station, work related event or to their residence.

9.2.2.3 (02-09-2005) GUIDELINES FOR OFFICIAL TIME
1. Special agents are authorized up to three hours per week of official time to engage in approved fitness activities. The following guidelines apply: A. There is no accumulation of unused clock-time hours. B. Hours cannot be carried over from week to week. C. Official time for fitness activities cannot be taken on full days of leave. D. LEAP, compensatory time, or overtime will not be utilized for physical fitness activities. 2. Special agents authorized to work on a part-time basis are authorized to charge official time to engage in approved PFP activities. The following formula will be used to calculate allowable official time chargeable to PFP: (Part-time hours / 40) X 3 = allowable PFP hours (rounded to nearest whole number)

9.2.2.3.1 (05-28-2004) Fitness Activity Logs
1. Each participant who charges official time to fitness activities will maintain a fitness activity log which records the date, time, duration of official and personal fitness time, and fitness activity. Participants will forward the log directly to the PFP Coordinator within five workdays of the end of each month on a monthly basis. Form 9839 is utilized for this purpose.

9.2.2.4 (02-09-2005) AUTHORIZED PROGRAM ACTIVITIES
1. For purposes of coverage under the Federal Employees Compensation Act (FECA), the US

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Department of Labor only recognizes physical fitness activities authorized by the employing agency. When examining claims under FECA, the Department of Labor will compare the activity/activities on which the claim is based against the agency’s approved activity list to determine whether the claim may be covered under FECA. The Department of Labor does not establish an approved list of activities for each governmental agency. Instead, the Department of Labor allows each individual governmental agency to establish its own list of approved activities for its employees. 2. Approved activities are those that address one or more of the following three areas of fitness: A. aerobic/cardiovascular endurance B. strength training C. flexibility 3. The following activities are authorized as fitness activities for PFP: A. brisk walking B. jogging C. running D. cycling E. cross-country skiing F. stair climbing G. rowing H. the use of fitness equipment related to items (a) – (g) (such as treadmills, stationary bikes, etc) I. swimming J. rope-skipping K. skating

Internal Revenue Manual - 9.2.2 Physical Fitness Program

L. aerobic exercises (such as aerobic classes, calisthenics, etc.) M. strength/resistance exercises (such as weight training, including the use of free weights, calisthenics, etc.) N. flexibility exercises (such as stretching, yoga, etc.) 4. An employee who is ranked fair or better after completion of their aerobic assessment may also be certified to perform the following four physical fitness activities: A. racquetball B. squash C. handball D. singles tennis 5. Activities not listed above are not part of this program, and are not covered by the Federal Employees Compensation Act.

9.2.2.5 (02-09-2005) RESPONSIBILITIES
1. The following subsections cover the responsibilities of the PFP Coordinator, the Supervisory Special Agent (SSA), and the special agent.

9.2.2.5.1 (05-28-2004) Physical Fitness Program Coordinator Responsibilities
1. The role of the PFP Coordinator includes providing special agents and management with necessary materials and guidance for the administration of the program. 2. Each PFP Coordinator is required to successfully complete the Federal Law Enforcement Training Center's Physical Fitness Coordinator Training Program or the Cooper Clinic Physical Fitness Coordinator Training Program. While other training may be acceptable, it must be approved in advance by the National Use of Force Program Manager at the NCITA. 3. The PFP Coordinator is responsible for the following:

Internal Revenue Manual - 9.2.2 Physical Fitness Program

A. Arranging blood analysis for employees and retaining copies of medical screening results. B. Receiving Health History Questionnaires and the cardiac risk profiles from special agents (in sealed envelopes), and logging in the receipt of this information and forwarding it to the Medical Review Officer. (The PFP Coordinator will not have access to individual special agents' personal medical histories or data on personal medical issues.) C. Reviewing and signing participants' monthly fitness logs and retaining these reports on file. Review should ensure that fitness activities listed on the log conform to program guidelines. D. Meeting with each participant individually to review or develop a personalized, progressive, and systematic health and fitness improvement program geared toward reaching specific goals. The exercise prescription will be developed based on the individual's current level of fitness and fitness goals, and should address cardiovascular, strength, and flexibility conditioning as specified in the Physical Fitness Special Agents Handbook. The PFP Coordinator should emphasize to the participant that the plan is flexible and can be adjusted if necessary. E. Administering or arranging the periodic fitness assessments. In addition, the PFP Coordinator will monitor the participant's records to ensure that periodic assessments are completed on a timely basis. F. Notifying management of the date, time, and location of the periodic fitness assessments and make up dates to ensure maximum participation. G. Informing management when a special agent fails to attend a scheduled medical screening appointment. H. Apprising management of special agents who fail to pass the medical portion of the medical screening, as well as those who have not been cleared to participate in an approved health and fitness improvement or maintenance program. I. Considering safety factors during all aspects of fitness testing, and program development and administration, in an effort to eliminate liability and prevent injuries. J. Identifying possible health risk factors. K. Maintaining necessary certification in basic life support (CPR). L. Reviewing annually the procedure for recognizing and treating injuries caused by heat or overexertion.

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M. Knowing and properly using the Rest, Ice, Compression, Evaluation, Stabilization or Support (RICES) treatment for injuries. N. Thoroughly documenting all exercise-related accidents or injuries. O. When possible, taking corrective action to prevent future accidents and/or injuries of a similar nature. P. Checking each piece of fitness testing equipment to ensure that it is in safe working order before each use and before it is returned to storage. Q. Maintaining all fitness and medical information for all participants in a secure file cabinet or safe, and complying with the provisions of the Privacy Act. 4. The Physical Fitness Program Coordinators are encouraged to attend the basic first aid course offered by the National Red Cross (or its equivalent).

9.2.2.5.2 (05-28-2004) Supervisory Special Agent Responsibilities
1. Each SSA is responsible for: A. Ensuring that special agents have been approved to participate in a health and fitness improvement program. This includes ensuring that all medical screening and assessment results indicate that the participant meets all necessary criteria. B. Discussing the program with each participant to determine an anticipated fitness schedule for pre-approval and ensuring participants keep management informed of the location of fitness activities during the workday. C. Identifying and discussing with special agents, as situations arise, when official duties will preempt pre-approved fitness program activities. D. Periodically reviewing fitness logs of participants for completeness and adherence to approved program activities. E. Ensuring that LEAP, compensatory time, or overtime is not utilized for official time fitness activities. F. Ensuring compliance with all safety guidelines.

Internal Revenue Manual - 9.2.2 Physical Fitness Program

G. Upon notification of an injury, ensuring the appropriate Workman's Compensation forms are timely filed and the special agent is placed on short-term or Temporary Restricted Duty (TRD).

9.2.2.5.3 (05-28-2004) Special Agent Responsibilities
1. Each special agent is responsible for: A. Participating in the CI Physical Fitness Program, including Part I (medical screening) and Part II (physical assessment). B. Notifying the PFP Coordinator of any changes in his/her medical or physical condition that may effect participation in the PFP. The information will be provided to the PFP Coordinator in a sealed envelope for forwarding to the Medical Review Officer. C. Ensuring the SSA is informed of his/her location during participation in Part III (approved health and fitness activities) on official time. D. Ensuring that monthly fitness logs are maintained and submitted on a timely basis. E. Ensuring compliance with all safety guidelines. F. If a special agent is unable to participate in a scheduled fitness assessment because of injury (for example, a broken leg) he/she will, after a rehabilitation period, attempt to participate in fitness assessments during future assessment cycles. G. Ensuring official time for physical fitness activities does not negatively impact on official duties. H. Promptly notify management of any injuries sustained during PFP activities (during official and non-official duty hours) and prepare all necessary Workman’s Compensation forms.

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http://www.irs.gov/irm/part9/ch02s03.html

Chapter 2. Skills and Training Section 3. Use of Force Procedures

9.2.3 Use of Force Procedures
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9.2.3.1 OVERVIEW 9.2.3.2 General Guidelines 9.2.3.3 Weaponless Control 9.2.3.4 Intermediate Weapon Control 9.2.3.5 Deadly Force 9.2.3.6 Use of Firearms by Special Agents (Firearms Policy) 9.2.3.7 Post Use of Force Procedures 9.2.3.8 Special Agents' Responsibilities and Authority Toward Crimes Committed Outside the Jurisdiction of IRS 9.2.3.9 Medical and Liability Considerations 9.2.3.10 Emergency Driving Exhibit 9.2.3-1 Use of Force Model Exhibit 9.2.3-2 Color Codes

9.2.3.1 (05-18-2005) OVERVIEW
1. The purpose of this section is to inform and guide special agents in the application of the Treasury Department's Use of Force Policy. This section contains the following information:
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9.2.3.2 (01-23-2004) General Guidelines
1. Special agents may use force to establish and maintain lawful control of a situation with paramount consideration being given to the preservation of life and prevention of physical injury. The force should be: A. applied timely B. the appropriate level of force for the circumstances

9.2.3.2.1 (07-16-2002) Before Using Force
1. If possible, special agents should: A. identify themselves as law enforcement officers B. exercise persuasion, advice, and verbal warning 2. However, if verbal means is or may be ineffective, special agents may use physical force to accomplish a law enforcement purpose.

9.2.3.2.2 (07-16-2002) Levels of Force
1. The Treasury Policy Use of Force Levels on an escalating scale are: A. weaponless control

http://www.irs.gov/irm/part9/ch02s03.html

B. intermediate weapon control C. deadly force 2. The degree of force authorized is limited to that which is necessary to establish and maintain control and depends on the degree of danger perceived by the agents.

9.2.3.2.3 (01-23-2004) When Force May Be Used
1. Force may be used to: A. minimize the potential for injury B. provide for the safety of the agent and others C. accomplish duties authorized by law, such as performing a protective function or effecting an arrest 2. The duty of special agents is to take steps to prevent harm to themselves and others. 3. Special agents do not have to wait for injury to occur before taking appropriate action. 4. Special agents may have to rapidly escalate or de-escalate the use of force depending on the totality of the circumstances.

9.2.3.2.4 (07-16-2002) Responsibilities of Agents, Supervisory Special Agents, and NonTreasury Law Enforcement Officers
1. Special agents are required to be familiar with policies and procedures regarding use of force and post use of force. 2. Supervisory Special Agents (SSA) must certify to their Special Agent in Charge (SAC), on an annual basis, that special agents assigned to them have reviewed use of force and post use of force procedures. 3. Non-Treasury law enforcement officers who are participating in task forces sponsored, led, or funded by the Department of the Treasury must comply with this Use of Force Policy. This policy does not apply to non-Treasury law enforcement officers who work with IRS special agents on an

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adhoc basis or who assist in a one-time law enforcement operation.

9.2.3.3 (01-23-2004) Weaponless Control
1. Weaponless control is the most commonly used control and restraint. Techniques include: A. special agent presence and approach B. identification C. verbal commands D. contact controls E. compliance techniques F. defensive tactics 2. Weaponless controls are based on fundamental policing skills and capitalize upon the acceptance of authority by the general public.

9.2.3.3.1 (01-23-2004) Categories of Weaponless Controls
1. Weaponless control techniques can be classified into four categories: A. Cooperative Controls which rely on communication skills, verbal directions, relative positioning, and agent's presence B. Contact Controls such as the escort position and the palm-heel push C. Compliance Techniques such as joint locks and pressure points D. Defensive Tactics such as escape techniques, striking techniques, and weapon retention

9.2.3.3.2 (01-23-2004) When to Use Weaponless Controls

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1. Special agents should use communication skills when they perceive their presence, identification, and verbal commands are sufficient to establish and maintain control. 2. Special agents should escalate to contact controls, compliance techniques, or defensive tactics when they perceive it is necessary to establish and maintain control.

9.2.3.3.3 (08-14-2000) Handcuffs and Restraints
1. The purpose of handcuffs, transport handcuff restraints, and flexcuffs is to restrain the movements of a subject or prevent further physical resistance by a subject. 2. All subjects taken into custody should be handcuffed behind their backs and the handcuffs doublelocked to ensure the safety of the special agent and other citizens. Exceptions to this procedure occur when: A. The subject has an injury that does not permit handcuffing behind the back. B. The subject's age or physical limitations indicate a change in procedure. C. It is tactically unsafe for the special agent to double-lock the handcuffs. D. If tactically safe, transport handcuff restraints may be used to secure a subject's hands in front when transporting the subject for extended periods of time. 3. All subjects should be handcuffed prior to being searched to ensure proper safety of all special agents.

9.2.3.4 (07-29-1998) Intermediate Weapon Control
1. Intermediate weapons are weapons other than firearms or lethal weapons with non-lethal munitions, designed to supplement weaponless control techniques.

9.2.3.4.1 (07-29-1998) Authorized Intermediate Weapon
1. Oleoresin capsicum (OC) is the only authorized intermediate weapon special agents are allowed to carry.

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2. Oleoresin capsicum canisters must consist of a nonflammable aerosol propellant, a nontoxic and nonflammable carrier, and a percentage of OC ranging from 5 to 10 percent. 3. While OC is the only authorized intermediate weapon, emergency use of a common object as an intermediate weapon is permitted.

9.2.3.4.2 (07-16-2002) When Oleoresin Capsicum May Be Carried
1. Special agents are authorized to carry the OC intermediate weapon only after they have successfully completed appropriate training. Oleoresin capsicum should be carried in a safe, secure, and readily accessible manner. 2. Oleoresin capsicum should be carried during tactical operations, e.g., arrests or search warrants. 3. During any other official duties, special agents may choose to carry OC along with their firearms. Special agents should not carry OC while assigned to Secret Service protection details, consistent with the policy guidelines promulgated by the Director of the Secret Service. 4. Special agents may carry OC on board an aircraft if secured in checked baggage. The OC canister should be placed in a Zip-Loc type plastic bag, and locked in luggage that will be placed in the cargo compartment of the aircraft. Special agents should contact the airline they will be traveling on to verify permission to transport OC in the above manner. If the airline denies permission, the special agents may obtain OC after arriving at their destination from the nearest CI office. The SAC of that field office will make OC available to visiting special agents upon verification that the special agents have completed the approved training.

9.2.3.4.3 (01-23-2004) When Oleoresin Capsicum May Be Used
1. Special agents may use OC when they perceive that weaponless control techniques are or may be insufficient to maintain lawful control. 2. Special agents may use OC to control animals in situations where the animal poses a threat to special agents or other individuals.

9.2.3.4.4 (07-16-2002) Effect of Oleoresin Capsicum
1. Oleoresin capsicum is designed to temporarily render an individual incapable of continuing to

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resist lawful control.

9.2.3.4.5 (01-23-2004) Purchase and Disposal of Oleoresin Capsicum
1. Oleoresin capsicum may be purchased by field offices and assigned either to individual special agents on a permanent basis or retained in a pool in the local office and withdrawn as needed. 2. Oleoresin capsicum purchased by the Director, Field Operations and Headquarters will be retained in a pool and withdrawn as needed. 3. The Chief, CI; Director, Field Operations; and SAC, shall make provisions to ensure that chemical weapons are properly disposed of at the expiration of their shelf life.

9.2.3.5 (07-29-1998) Deadly Force
1. Deadly force is any force likely to cause serious physical injury or death.

9.2.3.5.1 (01-23-2004) Authority to Carry Firearms
1. Special agents' authority to carry firearms is implied from the authority to make arrests and seizures found in 26 USC §7608 (b).

9.2.3.5.2 (01-23-2004) When Deadly Force May Be Used
1. Special agents may use deadly force only when necessary when, in the considered opinion of the special agent, the special agent or another person is in imminent danger of loss of life or serious physical injury. A. "Imminent" has a broader meaning than "immediate" or "instantaneous. " B. A subject may pose an imminent danger even if he/she is not at that very moment pointing a weapon at the agent. C. Deadly force may be used to prevent the escape of a fleeing subject if there is probable

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cause to believe the subject has committed a felony involving the infliction or threatened infliction of serious physical injury or death and the escape of the subject would put the special agents or others in imminent danger of serious physical injury or death. D. Special agents may direct deadly force against dogs or other vicious animals when necessary in self defense or defense of others.

9.2.3.5.3 (01-23-2004) When Deadly Force Results in Injury (Role of Special Agents)
1. The following procedures apply when deadly force is used resulting in injury, property damage, or death. These procedures are furnished as guidelines; they are not intended to be all-inclusive or limiting. 2. Special agents involved in the use of deadly force should: A. Place the subject under arrest (if appropriate), read the subject the Statement of Rights, and secure any weapons present. B. Call for medical assistance for all injured parties. C. Notify their SSA. D. If the situation coincides with a protection detail, evacuate the protectee(s) to a safe location. E. Notify local law enforcement authorities and the Treasury Inspector General for Tax Administration (TIGTA) and secure the scene until they arrive. F. Identify individuals with knowledge of the incident for subsequent interviews by local law enforcement authorities and the TIGTA. G. Compile notes as soon as possible to maintain accuracy. H. Furnish their firearms, if discharged, to local law enforcement authorities. This should be done through the SSA or senior special agent on site and a receipt should be obtained. I. Cooperate with local law enforcement authorities and the TIGTA by identifying themselves and providing such information as is consistent with the constitutional protection of the special agents, i.e., that firearms were discharged (or other deadly force employed) while acting in an official capacity; that medical assistance has been requested;

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that suspects are in custody. J. When discussing the incident, exercise caution so that confidential tax information is not disclosed.

9.2.3.5.4 (01-23-2004) Rights of Special Agents When Deadly Force Results in Injury
1. Special agents have the same constitutional protections as other individuals, i.e., due process, the right to counsel, etc. 2. Special agents cannot be compelled to make self-incriminating statements. 3. The United States may provide legal representation, depending on the facts of the incident and the type of action(s) initiated. 4. Special agents may choose to consult a private attorney before providing any oral or written statements. 5. Special agents will be responsible for selecting and paying for a private attorney.

9.2.3.5.5 (01-23-2004) When Deadly Force Results in Injury (Role of Supervisory Special Agents)
1. The SSA or senior special agent at the site should: A. Oversee protection of subject(s), witness(es), other special agents, and the evidence. B. Notify local law enforcement authorities and the TIGTA. C. Act as an intermediary or assign a " companion agent" to act as an intermediary between the special agents, the TIGTA, and local law enforcement authorities until the special agents regain their composure and understand their rights. D. Ensure that the special agents involved in the incident receive prompt medical attention, if needed; are removed from the scene as soon as possible; and are not subject to media attention.

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E. If the discharge of a special agent's firearm resulted in injury or death, ensure that the firearms and spent cartridges are placed into evidence with local law enforcement authorities. Normally, a different firearm is issued to the special agent until his/her regular weapon is returned. F. If special agents are injured, personal contacts should be afforded to their families and transportation provided to the site of treatment. If feasible, the contacts should be by someone who knows the families, by a senior special agent, or by a SSA. G. For more detailed information about the role of a SSA in trauma situations, see IRM 1.4, Resource Guide For Managers.

9.2.3.6 (01-23-2004) Use of Firearms by Special Agents (Firearms Policy)
1. Special agents may discharge their firearms when, in the considered opinion of the special agent, there is an imminent danger of loss of life or serious physical injury to the special agent or to another person. 2. Special agents must conceal their firearms upon their persons, keeping them away from public view when conducting official business. However, special agents may display their firearms, if they feel it will relieve a threat against special agents or others. 3. Special agents should draw their firearms only if there is sufficient cause to expect they will be used and be prepared to use them. 4. Special agents may not fire their firearms solely to disable a moving vehicle except in the limited circumstances when agents are exercising the Secret Service's protective responsibilities consistent with policy guidelines promulgated by the Director of the Secret Service. 5. Special agents may fire their firearms at the driver or other occupants of a moving motor vehicle only when: A. special agents and others are in imminent danger of serious physical injury or death; and B. public safety benefits of using such force outweigh the safety risk to special agents or others 6. Warning shots are prohibited because they pose a hazard to innocent parties. However, special agents may use warning shots while exercising the Secret Service's protective responsibilities, consistent with policy guidelines promulgated by the Director of the Secret Service.

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9.2.3.6.1 (01-23-2004) Discharge of Firearms
1. Whenever special agents discharge their firearms while in the performance of official duty, the post use of force procedures outlined in this section must be followed. These procedures do not apply to routine firearms discharges, such as during firearms training, qualification, testing, etc. 2. Whenever special agents have an accidental discharge of their firearms, they must report the incident via memorandum and forward through channels to the Director, National CI Training Academy (NCITA).

9.2.3.6.2 (08-14-2000) Investigation of Discharged Firearms
1. The TIGTA will investigate all instances where a discharged firearm resulted in injury, serious property damage, or death.

9.2.3.7 (08-14-2000) Post Use of Force Procedures
1. After force is used in an official capacity special agents must follow these procedures.

9.2.3.7.1 (07-16-2002) Notification When Force Results in Injury
1. In all instances where use of force resulted in injury, serious property damage, or death, the following notifications must be made: A. The involved special agents or assisting special agents (if the involved special agents are incapacitated due to injury) must immediately notify their immediate supervisor of the incident regardless of the time of day. B. The immediate supervisor must immediately notify TIGTA and the SAC. C. The SAC must then notify the Director, Field Operations, who will in turn notify the Chief, CI. D. Special agents must complete page 1 of Form 9776, Use of Force Incident Report, including a narrative and submit it to the SAC.

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9.2.3.7.2 (01-23-2004) If a Firearm was Discharged
1. If a firearm was discharged and resulted in injury, serious property damage, or death, the following notifications must be made to the: A. Undersecretary of the Treasury (Enforcement) B. Director, NCITA 2. Absent any legitimate fifth amendment (self incrimination) privilege concerns special agents must complete Form 9776, including a narrative. A copy of this report and attached narrative must be sent, through channels to the Director, National CI Training Academy, Attention: Use of Force Program Manager. 3. This procedure must be followed regardless if shots were fired by special agents/officers of other law enforcement agencies, a subject, or a third party.

9.2.3.7.3 (01-23-2004) Coping with the Incident
1. Psychological counseling is available to special agents involved in a use of force incident which resulted in serious injury or death. All communications between the special agents and the psychological counselor will fall under the patient-doctor confidentiality rules. 2. Psychological counseling is also available to their immediate family members. 3. Special agents involved in a use of force incident and/or their family members may contact the Employee Assistance Program's toll free line for law enforcement officers and their families. Counselors with a law enforcement background are available 24 hours per day, 7 days per week to address the unique concerns of law enforcement and their families. In addition to telephone counseling, face to face meetings can also be requested. A counselor can be reached regarding law enforcement concerns at 1-888-270-8958. 4. At the discretion of the SAC, administrative leave may be granted to special agents involved in an incident which resulted in serious injury or death.

9.2.3.7.4 (01-23-2004) Notification When Force Does Not Result in Injury

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1. If a special agent uses force the level of compliance techniques or higher on the Use of Force Model, he/she must complete Form 9776, including a narrative and submit it to the SAC. See Exhibit 9.2.3–1, Use of Force Model and Exhibit 9.2.3–2, Color Codes. A copy of this report and attached narrative must be sent to the Director, National CI Training Academy: Attention Use of Force Program Manager. 2. If a firearm is discharged, special agents must complete page 2 of Form 9776. A copy of this report and attached narrative must be sent to the Director, National CI Training Academy, Attention: Use of Force Program Manager.

9.2.3.8 (01-23-2004) Special Agents' Responsibilities and Authority Toward Crimes Committed Outside the Jurisdiction of IRS
1. Special Agents' responsibilities and authority toward crimes committed outside the jurisdiction of IRS is governed by whether the crimes committed are federal or non-federal.

9.2.3.8.1 (07-16-2002) Federal Crimes
1. Special agents on official duty are expected to respond when a federal crime is committed in their presence by: A. immediately calling the appropriate federal or local agency; or B. responding as federal law enforcement officers if it is a life-death situation or an incident in which the special agents are inextricably involved

9.2.3.8.2 (01-23-2004) Non-Federal Crimes
1. The Federal Law Enforcement Officers Good Samaritan Act (FLEOGSA) provides Federal law enforcement officers "scope of employment coverage and protection when taking reasonable action to protect individuals from injury or bodily harm during the commission of a crime of violence." 2. The law states "...a law enforcement officer shall be construed to be acting within the scope of his/her office of employment, if the officer takes reasonable action, including the use of force, to: Protect an individual in the presence of the officer from a crime of violence. Provide immediate

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assistance to an individual who has suffered or is threatened with bodily harm. Prevent the escape of any individual who the officer reasonably believes to have committed in the presence of the officer, a crime or violence." 3. A "Scope of Employment" determination is required before the government can represent employees and a determination that an employee acted "in the due performance of his/her official duty" is a prerequisite to reimbursement for monetary judgements against IRS employees, 26 USC §7423(2). 4. This act does not enhance the law enforcement authority or jurisdiction of any Federal law enforcement officer nor does it require Federal law enforcement officers to become involved. Rather, it assures the agents that if they take reasonable actions to intervene in a crime of violence that may result in a loss of life or serious bodily harm, the FLEOGSA provides agents significant protection from liability. 5. Any actions taken must be considered to be "a reasonable officer's response" as established in Graham vs. Connor, 490 U.S. 386, (1989). In some circumstances, notifying the local authorities rather than becoming involved would be the appropriate response. 6. Special agents must follow the Treasury Department's Use of Force Guidelines at all times when a firearm is used. These guidelines must be followed regardless of the fact that a state or local law may be more liberal in allowing law enforcement officers to use firearms.

9.2.3.8.2.1 (01-23-2004) Department of Justice's Position on Representation
1. The Department of Justice (DOJ) is currently prohibited by statute from representing special agents who acted outside the scope of their employment. 2. The DOJ will determine on a case-by-case basis whether special agents acted within the scope of their employment and whether representation by the government is in the interest of the United States.

9.2.3.9 (01-23-2004) Medical and Liability Considerations
1. Whenever a subject is injured during the application of a weaponless control technique or the intermediate weapon (OC), special agents must ensure that the subject receives medical attention as soon as possible. A. If an injured subject refuses medical assistance, special agents cannot force the subject to

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receive treatment. B. If a subject in custody refuses treatment, documentation should be obtained from medical personnel that the subject refused treatment. 2. If special agents cause injury to a person, the injured person is responsible for paying for needed medical services regardless of how the person was injured, even if by accident. 3. Special agents do not have the authority to pay or commit federal funds for medical services to a person injured by special agents, see 31 USC §1341(a)(1)(A), Antideficiency Act. A. Inadvertently violating this act could result in administrative discipline, including job loss (31 USC §1518). B. Violating this act knowingly could result in a fine and imprisonment (31 USC §1519).

9.2.3.9.1 (01-23-2004) The Federal Tort Claims Act
1. The Federal Tort Claims Act (FTCA), 28 USC §1346(b), §§2671-2680, allows an individual to claim damages against the United States for injury or death caused by the negligent or wrongful acts or omissions by special agents acting within the scope of their employment, where the United States, if a private person, would be liable under applicable state law. 2. In order for a person to obtain damages, special agents must have acted in a negligent or wrongful manner. 3. In order for the United States to assume liability, special agents must have been acting within the scope of their employment, as determined by the state law where an injury occurred. Otherwise, the United States will not assume liability and special agents acting outside the scope of their employment could be sued in state court and be held personally liable for damages upon a judgment against them.

9.2.3.9.1.1 (01-23-2004) If Injured Person Alleges Violation of Constitutional Rights
1. If an injured person alleges a violation of his/her constitutional rights, that person could file a lawsuit against the special agents. This is known as a Bivens suit. Bivens v Six Unknown Named Agents of the Federal Bureau of Narcotics, 403 U.S. 388 (1971). Unlike FTCA cases, special agents are the defendants and not the United States. Special agents will be represented by the government if DOJ determines the special agents were acting within the scope of their official

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duties and representation is in the interest of the United States. The special agents would be personally liable upon a judgment against them. However, 26 IRC §7423(2) authorizes the Secretary of Treasury to repay damages and costs recovered against federal employees in any suit brought against them by reason of anything done within the scope of their official duties.

9.2.3.9.2 (07-16-2002) Special Agents' Rights
1. If special agents are injured in the performance of their official duties, the special agents may file claims under the Federal Employees' Compensation Act (5 USC §8101).

9.2.3.9.3 (01-23-2004) Professional Liability Insurance
1. Professional liability insurance (PLI) is available through private insurance carriers for CI employees. Employees are personally responsible for contacting a private insurance carrier of their choosing to secure PLI and payment of the premiums. 2. Section 636 of Public Law 104-208 of the Treasury, Postal Service and General Government Appropriations Act for FY 1997 permits the following groups of employees to receive reimbursement for a portion of the premiums paid for PLI: A. Executives B. Managers C. Supervisors D. Management Officials E. Special Agents 3. The PLI reimbursements will be paid at 50 percent of the cost of premiums paid during the fiscal year. The reimbursement will be included in salary payments and will also be reflected on earnings and leave statements. There is no deadline by which reimbursement requests must be received. One of the following methods will be used to compute reimbursements for PLI premiums paid: A. by payroll allotment will be based on 50 percent of the payroll deductions made during the fiscal year.

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B. directly to insurance carriers will be prorated based on the premium amount for insurance coverage during the fiscal year. 4. To receive 50% reimbursement of premiums paid (regardless of the method of payment for premiums) during a fiscal year, eligible employees must complete the Self-Certification of Premiums Paid for Professional Liability Insurance form after the end of the fiscal year. The form can be obtained from the Employee Resource Center (ERC) web at <http://erc.web.irs.gov/>, searching under liability insurance. The completed form should be mailed to: Philadelphia Transactional Processing Branch P.O. Box 245, Drop Point S-5721 Attn: Professional Liability Insurance Bensalem, PA 19020 5. The ERC can be contacted for additional information on their web site at <http://erc.web.irs.gov/>, 1-866-743-5748, or TYY 1-866-924-3578.

9.2.3.10 (03-26-2008) Emergency Driving
1. Criminal Investigation special agents may engage in emergency driving only when the seriousness of the emergency outweighs the danger created by such driving. When engaging in emergency driving, special agents must continually balance the need to engage in such driving against safety considerations. 2. Directive No. 7 establishes guidelines consistent with a uniform Treasury standard for Law Enforcement Officers to use in making decisions regarding emergency driving. 3. The goal of this directive is to ensure the safety of law enforcement officers, other persons involved, and the general public by balancing the seriousness of the emergency with safety considerations. 4. Directive No. 7 applies when a suspect is being followed to make an apprehension, surveillance is being conducted, or exigent circumstances exist. It encompasses driving situations in which the posted speed limit or other traffic laws are disregarded. The directive also notes that some driving maneuvers with a vehicle, referred to as emergency driving tactics (i.e., blocking, ramming, forcing vehicles off the road), may constitute the use of deadly force and may only be used in compliance with Treasury’s Policy on the Use of Force, Treasury Order 105–12.

9.2.3.10.1 (03-26-2008)

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Definitions
1. Emergency Driving: Driving in a manner that disregards the posted legal speed limits or other traffic laws for one or more of the following purposes: A. following a suspect vehicle to make an apprehension B. conducting surveillance C. responding to other exigent circumstances 2. Emergency Driving Tactics: Emergency driving tactics are maneuvers made while pursuing a vehicle that are likely to cause deliberate physical contact between the vehicles. Examples of emergency driving tactics may include blocking (except for slow moving vehicles), cutting off, ramming, and forcing vehicles off the roadway. 3. Deadly Force: Deadly force is the use of any force that is likely to cause death or serious physical injury. Deadly force does not include force that is not likely to cause death or serious physical injury but unexpectedly results in such death or injury.

9.2.3.10.2 (03-26-2008) Factors To Consider
1. When balancing the need for emergency driving with safety considerations, CI special agents should consider all relevant factors, including but not limited to the following: A. the nature of the emergency B. the imminent danger to public safety if a suspect is not apprehended C. the seriousness of the offense D. the probability of apprehending a suspect at a later time E. the location, weather, speed, traffic, and road conditions F. the time of day G. the presence of pedestrians

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H. the special agent’s driving ability I. the condition of all the vehicles involved J. the availability of emergency equipment K. the availability of assistance from uniformed police officers in marked police vehicles L. the possibility of alternative courses of action

9.2.3.10.3 (03-26-2008) Emergency Driving Tactics
1. In some circumstances, emergency driving tactics may constitute the use of deadly force. Those emergency driving tactics that are likely to cause death or serious physical injury may constitute the use of deadly force. Special agents may use deadly force only when necessary; that is, when the special agent has a reasonable belief that the subject of such force poses an imminent danger of death or serious physical injury to the special agent or to another person. 2. Deadly force may be used to prevent the escape of a fleeing subject if there is probable cause to believe: a. The subject has committed a felony involving the infliction or threatened infliction of serious physical injury or death; or b. The escape of the subject would pose an imminent danger of death or serious physical injury to the officer or to another person. 3. If force, other than deadly force, reasonably appears to be sufficient to accomplish an arrest or otherwise accomplish the law enforcement purpose, the use of deadly force is not necessary. See Treasury Order 105–12, Policy on the Use of Force, for additional guidance.

9.2.3.10.4 (03-26-2008) Other Agencies
1. In the planning of Treasury led joint operations involving other federal, state, or local law enforcement agencies, each participant will be informed of this policy and that this policy will be controlling.

9.2.3.10.5 (03-26-2008) Emergency Equipment
1. Criminal Investigation should review state requirements for emergency systems/equipment on vehicles engaged in emergency driving and comply when appropriate.

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9.2.3.10.6 (03-26-2008) Rights of Third Parties
1. Nothing in these guidelines is intended to create, or does create, an enforceable legal right or private right of action.

Exhibit 9.2.3-1 (01-23-2004) Use of Force Model
This image is too large to be displayed in the current screen. Please click the link to view the image.

Exhibit 9.2.3-2 (01-23-2004) Color Codes
COLOR CODES The perception of threat has often been associated with the color spectrum. The Federal Law Enforcement Training Center has recently revised the Use of Force Model. These revisions remove the Strategic, Tactical, Volatile, Harmful and Lethal Officer Perception designations. The Ability/Capability-Opportunity-Intent triangle has replaced the specific Officer Perception designations to clearly emphasize a need for these legal elements to be simultaneously present before an Officer Response of Deadly Force is authorized. Blue-Designation 5 The agent is engaged in duties with an occupationally produced perception of responsibilities and risks. The agent ¡ can control the subject by using officer presence and verbalization skills. Green-Designation 5 The agent perceives an increase in risks with the confrontational environment, evolving into a procedural process, and the deployment of tactics. The subject exhibits ¡ the preliminary level of noncompliance and requires some degree of physical contact by the agent in order to elicit compliance. Yellow-Designation 5

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The agent perceives the situation escalating and the level of noncompliance has increased. The subject is using force ¡ and/or energy to maintain resistance. The agent uses physical control tactics of sufficient force to overcome the active resistance. Orange-Designation 5 The agent has the perception of an attack or the potential for such an attack on the agent or others. The agent is justified in ¡ using defensive countermeasures designed to cease the subject's nonlethal assault on the agent or others, regain control, and assure continued compliance. Red-Designation 5 The agent perceives an imminent threat that could result in ¡ death or serious physical injury to the agent or others. Immediate countermeasures must be used to stop the threat. ACTION ARROWS Double-headed assessment/selection arrows represent the potential for a threatening situation to rapidly escalate, de-escalate, or stabilize. Agent's control responses should also escalate, deescalate, or stabilize. More Internal Revenue Manual Accessibility | Freedom of Information Act | Important Links | IRS Privacy Policy | USA.gov | U.S. Treasury

Internal Revenue Manual - 9.3.1 Disclosure

Chapter 3. Disclosure and Publicity Section 1. Disclosure

9.3.1 Disclosure
q q q q q q q q q

9.3.1.1 9.3.1.2 9.3.1.3 9.3.1.4 9.3.1.5 9.3.1.6 9.3.1.7 9.3.1.8 9.3.1.9

OVERVIEW DEFINITION OF DISCLOSURE TERMS ADMINISTRATIVE INVESTIGATION THE FEDERAL GRAND JURY INVESTIGATIONS STATE GRAND JURY INFORMATION TITLE 18 SEIZURES AGENT ADMINISTRATIVE INFORMATION AND MANAGEMENT DOCUMENTS POST CONVICTION DISCLOSURES REPORTING VIOLATIONS OF CRIMES OUTSIDE OF THE JURISDICTION OF IRS

9.3.1.1 (04-13-2005) OVERVIEW
1. Returns and return information are confidential and may not be accessed or disclosed except as authorized by Internal Revenue Code (IRC) §6103. This rule applies to all present and former IRS employees. Civil and criminal sanctions may be imposed upon intentional violators. Effective with respect to disclosures made after September 3, 1982, civil actions for damages are permitted against the government rather than against the employee. 2. Instructions and guidelines relating to disclosure of information from tax returns and other IRS documents, including disclosure under the Freedom of Information Act and the Privacy Act, are published in Internal Revenue Manual (IRM) 11.3, Disclosure of Official Information. This section will only highlight some of the situations that are frequently encountered in Criminal Investigation (CI).

9.3.1.2 (09-25-2006) DEFINITION OF DISCLOSURE TERMS
1. Disclosure - Disclosure is the making known of returns or return information in any manner.

Internal Revenue Manual - 9.3.1 Disclosure

2. Return - A return is any tax return or information return, schedules, and attachments, including any amendment or supplement, which are required or permitted to be filed and is filed by a taxpayer with the Secretary of the Treasury. A photocopy of a return is considered to be a return for this purpose. Examples include: A. income tax returns, such as Forms 1040, 1120, or 1065, including all schedules and attachments with the forms submitted in order to process the Forms 1040, 1120, or 1065 B. information returns such as Forms W-2 or 1099 C. Employer's Annual Federal Unemployment (FUTA) Tax Returns (Forms 940), Employer's Quarterly Federal Tax Return (Form 941), Quarterly Federal Excise Tax Returns (Forms 720) or US Estate Tax Returns (Forms 706) 3. Return Information - The statutory definition of return information is very broad and relates primarily to that information gathered during the course of an investigation that did not come from the taxpayer or his/her representative. It includes any information other than a taxpayer’s return itself, which the IRS has obtained from any source or developed through any means that relates to the potential liability of any person under the IRC for any tax, penalty, interest, fine, forfeiture or other imposition or offense. Return information may also include, within the meaning of 26 USC §6103(b)(2) and (3), a suspicious return claiming a questionable refund if the suspicious return has not been determined to be a "return" within the meaning of 26 USC §6103(b)(1). A legal opinion should be sought as to the classification of the suspicious return (taxpayer return information verses return information) before proceeding with efforts to disclose information related to that return. Return information may be disclosed by the IRS to the appropriate Federal agency head pursuant to the procedures set forth in 26 USC §6103(i)(3)(A). Such disclosures may not be made by CI, but must be referred to the Area Disclosure Officer for possible disclosure to the Federal agency (see IRM 9.3.1.9 Reporting Violations of Crimes Outside of the Jurisdiction of IRS and IRM 11.3.28, Disclosures to Federal Agencies for Administration of Non-Tax Criminal Laws). Return information includes information extracted from a return (e.g., the names of dependents, locations of business interests, bank accounts, etc.) Examples include: A. the fact that a person has filed a return B. the fact that a person is under investigation C. the fact that the IRS has, in its possession, copies of public records which were secured from a county clerk’s office pursuant to an audit or investigation of a taxpayer

Note:
The distinction between taxpayer return information andreturn information (other than

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taxpayer return information) becomes an important distinction in relation to what can or cannot be disclosed and to whom (see IRM 9.3.1.9). 4. Taxpayer Return Information- 26 USC §6103(i) requires the IRS to make the distinction betweentaxpayer return information and return information (other than taxpayer return information) for disclosure purposes. Taxpayer return information is return information which is filed with or furnished to the IRS by or on behalf of the taxpayer to whom the return information relates (26 USC §6103(b)(3)). This includes, data supplied by a taxpayer's representative (e.g., his/her accountant) to the IRS in connection with an audit to the taxpayer's return (see IRM 11.3.28). 5. The distinction between taxpayer return information and return information (other than taxpayer return information) becomes an important distinction in relation to what may or may not be disclosed, and to whom the information may be disclosed (see IRM 9.3.1.9 and IRM 11.3.28). 6. Tax Administration- Tax administration includes the enforcement of not only the Internal Revenue laws, but also the enforcement of other related Federal statutes where such enforcement is related to the administration of tax laws, (example: use of 18 USC §286 and 18 USC §287 in a false claim investigation or 18 USC §371 for conspiracy) see IRM 11.3.22, Disclosure to Federal Officers and Employees for Tax Administration Purposes for additional information.

9.3.1.3 (09-25-2006) ADMINISTRATIVE INVESTIGATION
1. Official matters should not be discussed in public or within the hearing of the public. Further, when a discussion of findings, theories, and plans relating to an investigation is necessary in order to achieve a better understanding of the investigation, the discussion should be limited to the IRS personnel directly concerned. This does not preclude general (not case specific) discussions among special agents concerning investigative techniques, sources of information, etc. 2. The legal authority for facsimile transmission of tax return information is the same as for responding to an inquiry for tax information by telephone or mailing tax information to third parties. Guidelines regarding the faxing of return and return information can be found in IRM 11.3.1, Introduction to Disclosure (see subsection on Facsimile Transmission of Tax Information). 3. Employees may not use e-mail to transmit Sensitive But Unclassified (SBU) data unless they use the IRS Secure Messaging (SM) system. This messaging system allows users to encrypt e-mail messages and attachments for transmission between IRS employees. However, both the sender and the recipient must have SM for transmission of enforcement information, even when encrypted. A.

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Note:
Sensitive law enforcement information, including information related to informants or undercover activities, must not be transmitted by e-mail even when encrypted. See IRM 1.10.3, Standards for Using E-mail; IRM 11.3.1, Introduction to Disclosure; and IRM 25.10.1, Information Technology (IT) Security Policy and Guidance. 4. Special agents are authorized by 26 USC §6103(k)(6) to disclose return information to the extent such disclosure is necessary in obtaining information which may be relevant to a tax investigation, but is not otherwise reasonably available. These disclosures are called "investigative disclosures." A situation in which a special agent may have to make such a disclosure could arise when an agent contacts a third party believed to have information pertinent to a tax investigation and the information is not otherwise reasonably available. 5. Investigative disclosure, 26 USC §6103(k)(6), permits the disclosure of return information in the investigation process, but does not authorize the disclosure of returns themselves. The returns may be disclosed during the investigation process only to the taxpayer, the taxpayer's designated representative (26 USC §6103(c)) and the preparer of the return (see IRM 11.3.2, Disclosure with a Material Interest). These preparer disclosures are not 26 USC §6103 (k)(6) disclosures, but instead are covered under other disclosure provisions. An investigative disclosure is to be limited to the information that is necessary to obtain pertinent information. 6. The following subsections will provide an overview of the investigative situations that involve investigative disclosure.

9.3.1.3.1 (04-13-2005) Interviews
1. When soliciting information during a tax investigation from a third party other than the preparer of the return, a special agent may not show a taxpayer’s tax return to the third party. However, pertinent data (e.g., the nature and amount of income, deductions, expenses, etc.) may be extracted from the tax return and used in questioning third parties. This may be done to the extent that necessary information of sufficient reliability could not be secured without making the disclosure. 2. Situations in which necessary information generally will not be available from the taxpayer or will not be in a usable form include the following: A. when corroboration of a taxpayer’s statements and/or records is needed B. when missing evidence is in the hands of third parties

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C. when it is necessary to disclose return information to persons possessing special expertise in areas such as handwriting analysis, photographic development, sound recording enhancement, and voice identification 3. In determining whether to make an investigative disclosure under 26 USC §6103(k)(6), be certain that the disclosure is consistent with the requirements of that section and the related regulation. (Treasury Regulation 301.6103(k)(6)-1T). 4. The fact that information from the taxpayer’s investigative file is already public should not normally be a factor in making investigative disclosures. 5. Questions concerning investigative disclosures should be brought to the attention of one’s Supervisory Special Agent (SSA) or the local Disclosure Officer.

9.3.1.3.1.1 (09-25-2006) Third Party Accompanying the Subject of an Investigation
1. The taxpayer’s presence is not considered implied consent for disclosure purposes when a third party accompanies the taxpayer (see IRM 11.3.3, Disclosure to Designees and Practitioners). A written or oral authorization from the taxpayer, consenting to or requesting such disclosure, will be required during an investigation conducted by CI personnel. Details of the oral consent should be documented in a memorandum of interview or stated in a recorded statement. 2. Participation in a grand jury investigation does not suspend the special agent's conformance to disclosure provisions under 26 USC §6103. The special agent should consult Criminal Tax (CT) Counsel and the Disclosure Officer regarding any divergence from established procedures.

9.3.1.3.1.2 (04-13-2005) Third Party Accompanying Witnesses
1. When a witness has a person other than his/her counsel present to assist him/her, such as an interpreter, adequate precautions should be taken to ensure that the third party’s presence is necessary to obtain the information sought.

9.3.1.3.1.3 (04-13-2005) Recording an Interview
1. An interrogation or conference may be recorded only by a stenographer who is an employee of the IRS. This rule may be waived by the special agent’s SSA. At the request of the IRS or witness, which includes a principal, the SSA may authorize the use of:

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A. a stenographer employed by the US Attorney B. a court reporter of the US District Court C. a reporter licensed or certified by any state as a court reporter or to take depositions D. an independent reporter known to the IRS to be qualified to take depositions for use in a US District Court 2. The use of this procedure may be permissible under: A. 26 USC §6103(n)—where the IRS contracts with a non-IRS reporter or stenographer B. 26 USC §6103(c)—a consent by the subject taxpayer in an investigation C. 26 USC §6103(k)(6)—where a disclosure is necessary for investigative purposes 3. A witness or principal will be permitted to engage a qualified reporter as described in (1) above to be present at his/her expense to transcribe testimony, provided that the IRS may secure a copy of the transcript at its expense or record the testimony using a mechanical recording device or its own stenographer or reporter. However, the IRS retains the right to refuse to permit verbatim recording by a non-IRS reporter or stenographer on the grounds that disclosure would "seriously impair Federal tax administration (26 USC §6103(c))" . 4. When no stenographer is readily available, mechanical recording devices may be used to record statements by advising the witness, in advance, of the use of the device. If the witness does not object, this is considered implied consent to record. If the witness objects, the interrogator will refrain from mechanically recording the statement. If the witness elects to mechanically record the conversation, the IRS will make its own recording.

9.3.1.3.2 (04-13-2005) Informants
1. If a special agent finds it necessary or desirable to have an informant accompany him/her on an investigative contact or activity such as identifying a witness or taxpayer, pinpointing a location, introducing the agent to a witness or potential informant, or, in exceptional circumstances, attending a witness interview, the special agent must exercise extreme care to prevent unauthorized 26 USC §6103 disclosure of returns or return information. 2. As a general rule, an informant should not be present while a special agent is conducting a witness

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interview. There are, however, exceptional circumstances when a special agent may have an informant accompany him/her on a witness interview (for example, when the informant’s presence during the interview will make a reluctant witness feel more at ease). An informant’s presence is permitted only when the witness requests the informant’s presence or the witness expressly consents to the informant’s presence. This request or consent must be documented by the special agent in the memorandum of interview or other interview record. 3. When it appears that an IRS informant is knowledgeable concerning potential narcotics violations, CI personnel will encourage the informant to meet directly with Drug Enforcement Administration (DEA) or Federal Bureau of Investigation (FBI) personnel. If the informant declines, CI personnel will debrief the informant of the information relating to potential narcotics violations and will transmit such information to the Disclosure Office for transmission to the DEA, the FBI, or to the Assistant Attorney General, Criminal Division, Department of Justice (DOJ), in accordance with the disclosure laws and regulations. Contact the local Disclosure Office for advice concerning whether such a disclosure may be made under 26 USC §6103(i). 4. If Federal, state or local agencies inquire as to the reliability of an individual who is an informant, the Special Agent in Charge (SAC), with the permission of the informant, may tell the other agency the extent and value of the informant’s cooperation, consistent with disclosure policies. No information protected by 26 USC §6103 may be disclosed. The special agent will advise the informant that any information submitted by him/her concerning violations not under IRS jurisdiction will be furnished to the appropriate enforcement agency in accordance with IRS disclosure procedures. 5. Whenever an IRS employee learns that an IRS confidential informant/confidential witness (CI/CW), in obtaining information for the IRS, has employed illegal techniques such as breaking and entering into another’s premises without a search warrant, the illegal seizure of papers or other property, or the illegal overhearing of conversations, the IRS employee will immediately notify the SAC. The SAC will determine the advisability of notifying the appropriate law enforcement authority using the information and criteria set forth in IRM 9.4.2, Sources of Information. The disclosure to the appropriate agency, will be in accordance with IRM 11.3, Disclosure of Official Information.

9.3.1.3.3 (04-13-2005) Multiple Letters to Third Parties
1. In certain circumstances, letters to third parties may be the most efficient means of obtaining documentary evidence in an investigation. This option may be particularly useful when a large number of persons, widely scattered geographically, need to be contacted. 2. If not judiciously used, such correspondence may result in unwarranted embarrassment to the taxpayer.

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9.3.1.3.3.1 (04-13-2005) Approval for Multiple Letters to Third Parties
1. A special agent will not send multiple letters of a similar nature to third parties for information without prior managerial approval. However, in all instances where the special agent will be sending ten or more letters of a similar nature to third parties, the SAC or the Assistant Special Agent in Charge (ASAC) will approve the mailing. Managerial approval will be indicated on the file copy of the letter. 2. The special agent or SSA should obtain the advice of the Disclosure Officer and the CT Counsel prior to submitting the template letter to the CI management official for approval. The advice may be provided in an informal format. However, it should be forwarded to the CI management official and documented in the administrative file.

9.3.1.3.3.2 (12-02-2005) Content of Multiple Letters to Third Parties
1. The body of the letter may disclose that he/she is a special agent with IRS-CI and that he/she is conducting a criminal investigation of the taxpayer. Appropriate wording could be, "The Internal Revenue Service is conducting an investigation of ..." 2. When authorizing multiple letters, management should ensure that: A. Inquiries are being sent only to third parties who are known or potential sources of information. B. The information sought is important to the investigation. C. The letter is professional in tone and neither offensive nor suggestive of wrongdoing by the taxpayer; and D. The requirements of 26 USC §6103(k)(6) and the regulations thereunder have been considered including: - The information sought is necessary to determine the taxpayer's correct tax liability, and the disclosure is the minimum amount of information necessary to obtain the requested information. - The information is not reasonably available through other means.

Note:

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If the information is available through other means, is the other means not practical because it will unduly delay the investigation, is unreasonably costly, or is not available in sufficiently probative form?

9.3.1.3.4 (04-13-2005) Summons
1. Information obtained through the use of a summons is considered tax return information subject to the disclosure provisions of 26 USC §6103, §7213, §7213A, and §7431. 2. Except as otherwise authorized, no officer or employee of the Treasury Department or any component thereof shall: A. Publicly name any person to whom a summons has been issued, or release any information to the public concerning that person or the issuance of a summons. B. Disclose any testimony or material summoned (including the name of the witness) to any one other than an officer or employee of the Treasury Department who has a need for such information in connection with assigned tax administration duties or in connection with or for tax administration purposes. This non-disclosure position does not preclude any officer or employee of the IRS from disclosing material necessary to obtain information for investigative purposes. Any disclosure of tax information must be in accordance with the provisions of 26 USC §6103 as explained in this text.

9.3.1.3.5 (04-13-2005) Mail Covers
1. The mail cover request should be sufficiently detailed to establish the need for the mail cover. Disclosure of tax return information to the US Postal Service must be limited to the extent necessary to obtain the mail cover.

9.3.1.3.6 (09-25-2006) Narcotics Investigations
1. During the course of an OCDETF, HIDTA or other narcotics investigations, facts or information may surface concerning the commission of non-tax Federal criminal offenses. This information generally may be disclosed (pursuant to 26 USC §6103(i)(3)(A) and only to the extent such information pertains to Federal criminal violations), but specific procedures need to be followed (see IRM 9.3.1.9, Reporting Violations of Crimes Outside of the Jurisdiction of IRS).

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9.3.1.3.7 (09-25-2006) Strike Force Investigations
1. During the course of a Strike Force investigation, facts or information may surface concerning the commission of non-tax Federal criminal offenses. This information generally may be disclosed (pursuant to 26 USC §6103(i)(3)(A) only to the extent such information pertains to Federal criminal violations) but specific procedures need to be followed (see IRM 9.3.1.9).

9.3.1.3.8 (09-25-2006) Wagering Tax Investigations
1. Congress repealed 26 USC §6107, which allowed public inspection of certain tax records relating to wagering, and enacted 26 USC §4424. The Code was intended to remove any constitutional problems regarding enforcement of the wagering taxes resulting from improper disclosure of wagering tax information. 2. The SAC will meet with the United States (US) or Strike Force Attorney to discuss individual wagering tax investigations to determine if they are prosecutable under DOJ standards. Disclosure of information for this purpose is permissible under 26 USC §4424. The attorney for the government should be informed that any information gleaned from data subject to 26 USC §4424 must be used only for the administration of civil or criminal enforcement of the IRC, and that such information may not be used for intelligence or prosecutorial purposes such as the enforcement of gambling offenses set forth in Title 18 USC or any other non-tax administration purpose (see IRM 11.3.26, Wagering Tax Information). 3. If the US Attorney decides to prosecute a wagering tax defendant for a substantive non-tax gambling violation after a gambling tax investigation, he/she may need to prove that none of the information used at trial is tainted by the tax non-disclosure provisions. Where this is not possible, the prosecution of non-tax violations may be precluded. To avoid this potential interference with non-tax gambling investigations and prosecutions, all information controlled by 26 USC §4424 (see IRM 11.3.26), which is forwarded to the US Attorney, will have the following statement on the cover sheet of each report: THIS DOCUMENT CONTAINS WAGERING INFORMATION WHICH UNDER 26 USC §4424 AND §6103 MAY BE DISCLOSED ONLY FOR THE ADMINISTRATION AND CRIMINAL ENFORCEMENT OF THE INTERNAL REVENUE CODE. IT MAY NOT BE USED FOR INTELLIGENCE OR PROSECUTORIAL PURPOSES FOR GAMBLING OFFENSES SET FORTH IN TITLE 18 USC, OR ANY OTHER PURPOSE.

9.3.1.3.9 (09-25-2006) Disclosures to Other Treasury Employees
1. On many occasions, IRS employees have an official need for certain returns or return information

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in the special agent’s investigative file. Such employees include the special agent’s SSA, another special agent, a revenue agent, a revenue officer, etc. The key is whether the employee has a "need to know" in connection with his/her official tax administration duties. A written request is not required for these "need to know" disclosures. 2. A written request will generally be required before tax information in the possession of the IRS will be disclosed to an employee of another component of the Department of the Treasury whose official duties require the information for tax administration purposes (see IRM 11.3.22, Disclosure to Federal Officers and Employees for Tax Administration Purposes).

Note:
A written request is not required for The Office of the Treasury Inspector General for Tax Administration (TIGTA) investigations. For, TIGTA investigations, IRS employees should cooperate as fully as possible after having the TIGTA requester show proper identification. If employees have questions, they should consult their manager for guidance. If desired, IRS employees may use Form 11377 to record accesses made to provide information for TIGTA investigations (see IRM 11.3.22).

9.3.1.3.10 (04-13-2005) Disclosures to the Department of Justice for Tax Administration Purposes
1. Approved Special Agent Reports (SAR) are referred to DOJ under the authority of 26 USC §6103(h)(2) and (3). A disclosure may be made to DOJ of relevant returns or return information pertaining to the taxpayer who is or may be a party to a tax administration proceeding or investigation. Returns and return information of third parties gathered in connection with an investigation of a taxpayer may be disclosed to DOJ if such information satisfies the "item" or " transactional relationship" test provided in 26 USC §6103(h)(2). 2. The item test is met if an item on a third party’s return may relate to the resolution of an issue in the tax administration proceeding or investigation. 3. The transaction test is met if the third party’s returns or return information may relate to a transaction between the taxpayer and the third party and the third party’s information pertaining to the transaction may affect the resolution of an issue in a proceeding or investigation involving tax administration. 4. Special agents who are contacted by an attorney for the government and asked to provide returns or return information in connection with an investigation or prosecution which was not referred by the IRS should refer the requesting attorney to the Disclosure Officer.

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9.3.1.3.11 (04-13-2005) Disclosures to a Taxpayer’s Representative
1. Disclosure of returns and return information to the taxpayer’s representative will be made only in the following circumstances: A. The taxpayer has executed a written consent to the disclosure. (Form 8821, Tax Information Authorization, may be used for this purpose. This form does not authorize practice before the IRS). B. The taxpayer has provided his/her representative a tax power of attorney (Form 2848, Power of Attorney and Declaration of Representative, may be used for this purpose). C. Participating in a grand jury investigation does not suspend the special agent's conformance to disclosure provisions under 26 USC §6103. The special agent should consult CT Counsel and the Disclosure Officer regarding any divergence from established procedures.

9.3.1.4 (04-13-2005) THE FEDERAL GRAND JURY INVESTIGATIONS
1. There are two types of secrecy requirements surrounding information accumulated during a tax grand jury, a tax related grand jury, or non-tax grand jury investigation: A. Those which are set forth in Federal Rules of Criminal Procedure Rule 6(e) (USCS Fed Rules Crim Proc R 6(e)) and deal with grand juries; B. Those which are set forth in 26 USC §6103 and deal with tax related information.

This subsection addresses grand jury secrecy, grand jury information available for civil tax matters, 26 USC §6103 disclosures in the grand jury investigation and how to deal with 26 USC §6103 disclosure when state and local law enforcement officers are assisting a Federal grand jury.

9.3.1.4.1 (09-25-2006) Grand Jury Secrecy (Federal Rules of Criminal Procedure Rule 6)
1. Grand jury proceedings are kept secret to: A. prevent the escape of those whose indictment may be contemplated but is not yet certain

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B. ensure freedom to the grand jury in its deliberations by protecting its members from annoyance and undue influence C. prevent subornation of perjury or tampering with witnesses D. protect the reputations of persons investigated but not indicted 2. Accordingly, while it is in session, the only persons who may be present in a grand jury proceeding are attorneys for the government, the witness under examination, a stenographer or operator of a recording device, and interpreters when needed. An indictment may be dismissed upon a showing that an unauthorized person was present during the proceedings. No person other than the jurors may be present while the grand jury is deliberating or voting ( USCS Fed Rules Crim Proc R 6(e) for exceptions and other matters pertaining to grand jury disclosures). 3. Federal Rule of Criminal Procedure 6(e), (referred to as Rule 6(e)) provides, generally, that matters occurring before the grand jury are secret. For convenience, "matters occurring before the grand jury" will be referred to as grand jury information. No obligation of secrecy may be imposed on any person except in accordance with this rule. 4. Disclosure of grand jury information may be made to those government personnel deemed necessary by an attorney for the government to assist in the performance of his/her duty to enforce Federal criminal law. With the consent of the attorney for the government, agents of the IRS may: A. examine documents and records which are before the grand jury B. inspect the minutes of a grand jury proceeding C. assist in the investigation of possible criminal tax violations 5. If the court orders disclosure of matters occurring before the grand jury, the disclosure shall be made in such manner, at such time, and under such conditions as the court may direct.

9.3.1.4.1.1 (04-13-2005) Witnesses Before the Grand Jury
1. Federal rules do not impose any obligation of secrecy upon witnesses, although some Federal jurisdictions require an oath of secrecy. 2. A grand jury is not obliged to grant a request from a prospective defendant to appear before it as a witness. However, DOJ procedures provide that where no burden upon the grand jury or delay of its proceedings is involved, reasonable requests of a prospective defendant to personally testify

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before the grand jury are to be given favorable consideration. This may be done provided that such witness: A. explicitly waives his/her privilege against self-incrimination B. is represented by counsel or voluntarily and knowingly appears without counsel C. consents to full examination under oath

9.3.1.4.1.2 (04-13-2005) Defendant's Access to Grand Jury Information
1. After the grand jury’s functions have ended, a trial court may order disclosure of grand jury minutes to the defendant if he/she shows a "particularized need" to: A. support an attack upon the indictment B. impeach a witness or refresh his/her recollection C. to inspect his/her own grand jury testimony while defending a perjury prosecution

9.3.1.4.1.3 (04-13-2005) Grand Jury Investigations and Assisting IRS Personnel
1. Internal Revenue Service personnel who participate in a grand jury investigation do so for the purpose of assisting the attorney for the government in the enforcement of the Federal criminal law. 2. Internal Revenue Service personnel gaining access to grand jury information may not disclose this information except as authorized under the exceptions ( IRM 9.3.1.4.1 above) to the general rule of secrecy. Disclosures otherwise prohibited by Rule 6(e), other than the deliberations and the vote of any grand juror, may be made to: A. an attorney for the government for use in the performance of his/her duty to enforce Federal criminal law B. such government personnel (including a state) as are deemed necessary by an attorney for the government to assist an attorney for the government in the performance of his/her attorneys duty to enforce Federal criminal law

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3. Internal Revenue Service personnel to whom disclosure is made under this authority shall not disclose matters occurring before the grand jury to any and all others (including other IRS personnel) except as deemed necessary by the attorney for the government.

9.3.1.4.1.4 (04-26-1999) Violations of Grand Jury Secrecy
1. An intentional violation of Rule 6 may be punished as contempt of court.

9.3.1.4.2 (04-13-2005) Grand Jury Information and Civil Tax Matters
1. Disclosure of matters occurring before the grand jury may also be made when so directed by a court preliminarily to or in connection with a judicial proceeding, but the court has held that IRS civil examinations are not preliminary to judicial proceedings within the meaning of Rule 6(e). In addition, the government must establish a "particularized need" to obtain an order. 2. At the end of the grand jury investigation, the special agent will prepare a final report similar to the final report in an administrative investigation. The special agent should prepare separate exhibit folders for documents governed by Rule 6(e) and clearly identify them as grand jury information.The SAC should give copies of the report to only those persons specifically on the Grand Jury Access List. 3. If a Rule 6(e) order cannot be obtained and the investigation has civil potential solely on the basis of non-grand jury information, the special agent will consult with the attorney for the government for his/her concurrence that the information is non-grand jury information and can be disclosed. The special agent will then confer with CT Counsel to determine whether IRS policy allows the information to be given to the appropriate civil operating division. If CT Counsel concurs, the SAC will transmit the non-grand jury information to the Territory Manager of the civil operating division by memorandum, but will neither refer to the grand jury investigation nor refer to or draw conclusions based on grand jury information. 4. If civil action is not to be pursued and the attorney for the government returns the records to CI for disposition, CI should document how the records are to be disposed of, secure the approval of the attorney for the government (original records of witnesses can generally be returned to the witnesses, if approval is received), and retain the record of disposition in the office files. Records which are to be retained should be stored in accordance with existing IRS guidelines.

Note:
Special care should be taken to document sources of information as the IRS may have to prove that

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evidence used for civil purposes was properly obtained under a Rule 6(e) order or was obtained independently of the grand jury. The independently obtained information, even if identical to the grand jury information, is not governed by Rule 6(e) and may be disclosed in accordance with 26 USC §6103. For example, information supplied to a grand jury by the IRS from sources independent of the grand jury process may be used for the criminal purposes of the grand jury and the civil purposes of the IRS.

9.3.1.4.2.1 (04-13-2005) Rule 6(e) Order
1. After all criminal matters have been concluded, CI will confer with the attorney for the government for the purpose of pursuing any civil action. If the attorney for the government agrees that civil action should be pursued, CI will seek CT Counsel’s assistance in reviewing the information gathered for the purpose of pursuing civil action. If CT Counsel determines that civil action is warranted, an attorney for the government will apply for a Rule 6(e) order to allow use of the grand jury information by the appropriate civil operating division. If the court grants the Rule 6(e) order authorizing full disclosure for civil purposes, the SAC will forward a copy of the Special Agent’s Report (SAR) and supporting documents to the appropriate civil operating division. 2. A court order under Rule 6(e) is applied for by an "attorney for the government." "Attorney for the government" is defined by USCS Fed Rules Crim Proc R 54(c) to include only "the Attorney General, an authorized assistant of the Attorney General, a United States Attorney, and an authorized assistant to a United States Attorney." When the terms "attorney for the government" or "government attorney" are used, they refer to the attorney directly involved in the conduct of the grand jury proceeding.

9.3.1.4.3 (04-26-1999) The Grand Jury and Disclosure of Tax Return and Return Information
1. The procedures for revealing tax information to the attorney for the government or others involved in conducting a grand jury investigation differ depending on whether the grand jury investigation or proceeding is for tax administration purposes or not.

9.3.1.4.3.1 (09-25-2006) Grand Juries for Tax Administration Purposes
1. A Federal grand jury investigation conducted to determine if there is a violation of criminal tax law (Title 26 charges) or tax related offense (e.g., 18 USC §286 and §287, 18 USC §371 or identity theft) is a Federal grand jury for tax administration purposes. Two means by which a Federal grand jury investigation can be initiated is by way of an IRS initiated request or a request from an attorney for the government. An IRS initiated grand jury request must be approved by

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DOJ, Tax Division and referred to the attorney for the government. Department of Justice, Tax Division must approve the request by the attorney for the government for the initiation of a taxrelated Federal grand jury in other than Organized Crime and Drug Enforcement Task Force (OCDETF) investigations. If such a request involves an on-going non-tax Federal grand jury investigation or an OCDETF investigation, the SAC is authorized to approve the Federal grand jury investigation in accordance with Tax Division Directive 86-59. In those situations, the IRS can disclose returns and return information to DOJ on its own volition consistent with 26 USC §6103(h)(2). 2. Another type of grand jury involving a matter of tax administration is a finalizing type of grand jury. In general, for purposes of tax administration, the IRS may disclose returns and return information to DOJ on its own motion, if the investigation to which the information relates has been referred to DOJ. A referral, for 26 USC §6103 purposes, is an IRS request to DOJ that it defend, prosecute, or take other affirmative action with respect to an investigation. Appropriate referral procedures should be followed. This occurs when an administrative investigation has proceeded through approval channels to the US Attorney's Office for prosecution (see 26 USC §6103(h)(2)). 3. There are other grand jury investigations in which tax charges are related to the primary investigative charges but may not be the initial or primary focus. In this latter type of Federal grand jury proceeding, before returns or return information can be revealed to the attorney for the government for use in the investigation, one of several procedures must be followed, i.e., an ex parte order or a related statute call. Even then, the IRS can only disclose returns and return information to DOJ personnel (including US Attorneys) or Federal personnel named in an ex parte order who are personally and directly engaged in, and solely for their use in, preparation for any such proceeding (or investigation which may result in such a proceeding). 4. For purposes of Federal grand jury investigations described in (1) and (2) above, as well as when a related statute call is made, returns or return information can be disclosed only if one or more of the following conditions are satisfied: A. The taxpayer whose returns and return information are to be disclosed is or may be a party to the proceeding. B. The treatment of an item on the return is or may be related to the resolution of an issue in the proceeding or investigation. C. The return or return information relates or may relate to a transactional relationship between a person who is or may be a party to the proceeding and the taxpayer which affects, or may affect, the resolution of an issue in the proceeding or investigation. 5. These conditions do not apply to the ex parte court order process under 26 USC §6103(i)(1). In this regard, any taxpayer under investigation by the Federal grand jury is considered to be an

Internal Revenue Manual - 9.3.1 Disclosure

individual who is or may be a party to the proceeding.

Note:
The IRS can still disclose the information to the DOJ under 26 USC §6103(h)(2) and (3) as necessary in the litigation of the IRS civil tax cases. The decision to issue a Rule 6(e) order permitting the IRS to use grand jury information for civil purposes is at the discretion of the court having supervision over the grand jury.

9.3.1.4.3.1.1 (09-25-2006) Multi-Agency and Money Laundering Grand Jury Investigations
1. The situation that most frequently causes confusion to a special agent arises when the special agent is participating in a money laundering investigation or a multi-agency money laundering or other multi-agency Federal grand jury investigation and tax charges are not the main focus of the investigation. In these cases, issues arise as to whether and how the special agent obtains tax information and how the tax information is to be transmitted to DOJ, and for what purposes it can be used by DOJ. Further, an issue arises when other agencies are participating in the investigation as to whether they may access returns and return information for purposes of the non-tax related charges (e.g., bank fraud, securities fraud, narcotics violations). A. If there are Title 26 charges that have been approved by the DOJ, Tax Division, then returns and return information may be used by the attorney for the government in the tax investigation and also for any non-tax matter that involves or arises out of the particular facts and circumstances giving rise to the tax investigation (see Treas. Reg. Section 301.6103(h)(2) -1(a)(2)(ii)). However, if the Title 26 charges are subsequently dropped, then an ex parte order under 26 USC §6103(i)(1) is required to continue using returns and tax return information in the non-tax portion of the investigation. B. Money laundering or Bank Secrecy Act (BSA) investigations are not tax administration investigations. In money laundering and BSA investigations, the special agent may access returns and return information only when there has been a "related statute call" made by the SAC or when a court has issued an order pursuant to 26 USC §6103(i)(1). As discussed later in subsection IRM 9.3.1.4.3.1.1.2, Related Statute Determination, the related statute determination permits access by special agents to tax information for use in a money laundering and/or BSA investigation. That information may then be disclosed to DOJ under the provisions of 26 USC §6103(h)(2) and (3) - but solely for use in the related statute investigation. The information may not be used or disclosed to other agencies for any purpose other than the tax-related money laundering or BSA charge. In the absence of a related statute determination, a special agent may access tax information for use in a money laundering or BSA investigation only if the attorney for the government first obtains an ex parte court order under 26 USC §6103 (i)(1).

Internal Revenue Manual - 9.3.1 Disclosure

C. In a multiple agency grand jury investigation which includes money laundering and/or BSA violations, the attorney for the government may apply for an ex parte order under 26 USC §6103(i)(1) that will permit returns and return information to be used by a special agent for investigation of these charges, as well as for use by the other participating agencies for investigation of the other non-tax charges. If the SAC determines that the related statute test is met and makes a related statute call, disclosure to and use by a special agent and the attorney for the government of returns and return information is permitted only for the charges under the related statute money laundering or BSA charges. Such disclosures must comply with 26 USC §6103(h)(2) and (3). The other agencies may access the returns and return information for the charges other than money laundering only if an ex parte court order is obtained under 26 USC §6103(i)(1). 2. There are advantages and disadvantages to special agents obtaining access to returns and return information in money laundering or BSA investigations by an appropriate related statute determination versus obtaining access pursuant to an ex parte court order. The related statute determination does not require action by a court - only the SAC need be involved. On the other hand, any information gathered or collected during the investigation after the related statute call is made is return information protected by 26 USC §6103. This is the case whether or not the IRS has information in its files indicating a tax crime or whether or not any Title 26 charges are pursued. A related statute determination cannot be undone. Further, it may be difficult in those situations to later sort out what portion of the information obtained is covered by 26 USC §6103 and which is not. 3. Moreover, in multiple agency situations, an ex parte court order will be required, in any event, in order to disclose tax information from the IRS to the other Federal agencies participating in the investigation. Therefore, in multi-agency investigations involving money laundering or BSA, but not Title 26 violations, if returns and return information are sought, consideration should be given to obtaining returns and return information for both the money laundering, BSA, and other non-tax violations via an ex parte pursuant to 26 USC §6103(i)(1), thus obviating the need for a related statute determination. An ex parte court order, however, can only be used to obtain information for non-tax administrative purposes. 4. Indications of money laundering or BSA violations will be identified from either tax information protected by the disclosure provisions of 26 USC §6103, including returns and return information as defined in 26 USC §6103(b)(1) and (2) or from sources not protected by 26 USC §6103. A Title 31 report is generally not protected by 26 USC §6103 unless it is used in a tax or tax-related investigation or placed in a tax investigation case file. If a Title 31 report is used in a tax or taxrelated investigation or placed in a tax investigation case file, it becomes return information protected by 26 USC §6103. 5. Forms 8300, Report of Cash Payments Over $10,000 Received in a Trade or Business, may or may not be tax information protected by 26 USC §6103. As of January 1, 2002, pursuant to the

Internal Revenue Manual - 9.3.1 Disclosure

provisions of the USA Patriot Act, Form 8300 has a dual filing requirement under both Titles 26 and 31. Care must be taken to ensure that disclosure of Forms 8300 and information extracted from these forms is made under the appropriate guidelines. Generally, the following parameters are suggested:
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Pre USA Patriot Act (transactions occurring on or before 12/31/2001) Forms 8300 are solely Title 26 documents eligible for (among other 26 USC §6103 authorities) 26 USC §6103 (I)(15) disclosure. Post USA Patriot Act Forms 8300 (covering transactions occurring on or after 1/1/2002) are solely Title 31 returns when the source is the Currency and Banking Retrieval System (CBRS). Post USA Patriot Act Forms 8300 are Title 26 returns when the electronic source is the Information Return Master File (IRMF) or the filer is the clerk of the court. Paper copies of all Forms 8300 filed pre USA Patriot Act (and those Forms 8300 filed post USA Patriot Act by clerks of the court) are solely Title 26 in character. Paper copies of Forms 8300 filed post USA Patriot Act are generally (with the exception of those filed by clerks of the court) dual in character. As such, they are disclosed in accordance with the purpose of the request for disclosure (i.e., tax administration or not tax administration).

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6. In order to ensure compliance with the appropriate statute (Title 26 or Title 31) regulations, special agents considering disclosure of Forms 8300 should discuss the answers to the following questions with the Disclosure Officer:
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Is the filer a clerk of the court? Is the transaction date before 1/1/2002 or on or after 1/1/2002? Is the source of the Form 8300 being disclosed derived from IRMF or from CBRS? Is the Form 8300 required (for a transaction of more than $10, 000)? Is the purpose of the disclosure tax administration or a non-tax purpose?

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9.3.1.4.3.1.1.1 (04-13-2005) Ex Parte Order
1. Details concerning an ex parte order are found in IRM 11.3, Disclosure of Official Information. 2. If the return or return information is obtained pursuant to an ex parte order requested by an attorney for the government, only the information received as a result of that ex parte order is

Internal Revenue Manual - 9.3.1 Disclosure

protected by 26 USC §6103 non-disclosure provisions, not all the information collected during the investigation. 3. An ex parte order can only be obtained for Federal non-tax judicial or administrative proceedings pertaining to the enforcement of a Federal criminal statute (i.e., not in a Title 26 investigation, and generally not a investigation in which a previous related statute determination has been made).

9.3.1.4.3.1.1.2 (04-13-2005) Related Statute Determination
1. Returns and return information may be used or disclosed to initiate or conduct a money laundering or BSA investigation if the investigation is considered to be for tax administration purposes according to 26 USC §6103(b)(4). When investigating potential money laundering or BSA violations, the key test (related statute test) is whether, under the facts and circumstances of the particular case, the money laundering and BSA provisions are considered related to the administration of the Internal Revenue laws. 2. The related statute determination is within the good faith judgment of the SAC. This determination is also known as the "related statute call." The SAC will make such determination in memorandum form with his/her signature for placement in the administrative investigative file. Returns and return information cannot be used to evaluate information related to a money laundering or BSA investigation to determine whether a related statute call should be made. 3. The factors to be considered are whether the offense: A. was committed in the furtherance of a violation of the Internal Revenue laws, or B. is part of a pattern of violations of the Internal Revenue laws. 4. Once the related statute determination is made by the SAC, all the information received, collected, and developed by the IRS, in that investigation, is protected from disclosure under 26 USC §6103 regardless of whether or not a formal tax investigation is opened and/or the ultimate determination with respect to any potential Title 26 charges. 5. Once the related statute determination is made, 26 USC §6103(h)(1) allows for the disclosure of returns and return information to Treasury Department employees whose official duties require inspection or disclosure for tax administration purposes. This allows for access to the returns and return information by the IRS investigating special agents. This does not allow the sharing of information to all other Treasury agents. 6. Once the related statute determination has been made, and the matter has been referred to DOJ, returns and return information can be disclosed to DOJ employees who are personally and directly

Internal Revenue Manual - 9.3.1 Disclosure

engaged in the tax administration matter. Title 26 USC §6103 (h)(2) allows for DOJ employees to use the information solely for tax administration investigations and proceedings before a Federal grand jury or a court. This allows the IRS investigating special agents to disclose returns and return information to the investigating attorney for the government engaged in the proceedings of the related statute money laundering or BSA investigation. It does not allow disclosure to all other DOJ employees for purposes of investigating other non-tax charges. As discussed above, an ex parte order under 26 USC §6103(i)(1) must be obtained to use tax information for those non-tax charges (e.g., bank fraud, securities fraud). The attorney for the government may further disclose returns or return information to officers and employees of DOJ only to the extent necessary for their assistance with the tax administration Federal grand jury proceeding or in preparation for a proceeding. 7. A money laundering or BSA Federal grand jury request without Title 26 charges may be directly referred by the SAC to the attorney for the government in instances where the related statute call has been made but where tax charges are not pursued. 8. However, a money laundering investigation under 18 USC §1956(a)(1)(A)(ii) is always considered tax related and is never a pure money laundering investigation. A Federal grand jury request for violation of 18 USC §1956(a)(1)(A)(ii) must follow the referral procedures for Title 26 investigations. 9. It is not necessary to establish a Title 26 violation or a numbered Title 26 investigation to meet the related statute test. However, if subsequent to a related statue determination, the investigation is not expanded to include Title 26, then an ex parte court order must be obtained to utilize the return and return information.

9.3.1.4.3.1.1.3 (04-13-2005) Bank Secrecy Act Report Information
1. Treasury dissemination guidelines, promulgated under the authority of 31 CFR 103.43, permit IRS to disclose BSA report information (Title 31 reports) to Federal, state, and local agencies for use in criminal, tax, and regulatory law enforcement matters, including BSA enforcement. This includes disclosure to other investigators or prosecutors participating in joint Federal or joint Federal-state investigations (including state or local prosecutors or law enforcement agencies) and to the attorney for the government, for use in conjunction with joint investigations or prosecutions. 2. Suspicious Activity Reports (SARs), however, can only be disseminated in criminal matters and therefore can not be shared with IRS employees handling civil examination or collection duties, or other civil enforcement divisions or agencies. 3. As of January 1, 2002, pursuant to the provisions of the USA Patriot Act, Form 8300 is required to be filed under both Title 26 and Title 31. Care must be taken to ensure that the use and disclosure

Internal Revenue Manual - 9.3.1 Disclosure

of the Form 8300 and information extracted from it is done in accordance with the appropriate guidelines. Disclosure limitations vary depending on whether the Form 8300 reporting violation is being investigated under 26 USC §6050I or 31 USC §5331. If the special agent is investigating the violation under 26 USC §6050I disclosure is governed by 26 USC §6103. Generally, the form and underlying files may be disclosed as part of a referral for Federal grand jury tax investigations or prosecutions. Title 26 Form 8300 information may also be disclosed for law enforcement purposes in response to a written request pursuant to 26 USC §6103(I)(15). However, the form itself or related information cannot be disclosed. Under 26 USC §6103(I)(15), the special agents may access Title 26 Form 8300 information contained on CBRS. If, however, additional Title 26 information is sought beyond the information from the Form 8300, a related statue determination will be necessary. Alternatively, in any non-tax investigation, special agents have the option of obtaining the Title 26 Form 8300 information, the form itself and related files pursuant to a court order. 4. Disclosures made under 26 USC §6103(I)(15) must contain a warning statement on the use and further dissemination of all BSA information. In addition, the IRS must maintain a log of all such disclosure requests. Logs and warning statements are required upon dissemination. Currently, under National Treasury Delegation Order 143 (Rev.6), the authority to release BSA report information is delegated to the SAC. 5. For Title 31 information on financial institutions not within the jurisdiction of the IRS where the related statute test has been met, but where prosecution potential is lacking, the SAC should forward a summary of the facts on Form 5104, Report of Apparent Violation of Financial Recordkeeping and Reporting Regulations, to the Chief, CI, who will advise the Executive Associate Director, Compliance and Regulatory Enforcement. If tax information is disclosed, it should be noted in the summary.

9.3.1.4.3.2 (04-13-2005) Grand Jury Investigations Not Concerning Tax Administration (Pure Title 18 and Title 31 Money Laundering Investigations)
1. Pure Title 18 and Title 31 money laundering or BSA investigations are those investigations not involving tax or tax-related violations. The Title 31 reports and other information collected by the IRS during the investigation are not protected by 26 USC §6103. 2. If, after evaluation of Title 31 reports and other information collected during the (initial) investigation, a determination is made to conduct a pure money laundering grand jury investigation (e.g., the related statute test is not met), returns and return information may not be disclosed to Treasury (including IRS) and DOJ employees, except through the ex parte court order provisions of 26 USC §6103(i)(1), or the request provisions of 26 USC §6103(i)(2).

9.3.1.4.4 (09-25-2006)

Internal Revenue Manual - 9.3.1 Disclosure

Disclosure To State And Local Law Enforcement Personnel Assisting The Federal Grand Jury
1. Tax information obtained under specific provisions of 26 USC §6103 for use in a tax or a non-tax Federal grand jury investigation generally may be disclosed by the attorney for the government to Federal officers and employees personally and directly engaged in the investigation. However, 26 USC §6103 generally prohibits disclosure of tax information to state and local law enforcement personnel assisting the attorney for the government in such investigations. 2. State and local personnel can be considered Federal employees for disclosure purposes if specific prerequisites noted below are met: A. those personnel are formally appointed as Federal employees (rather than merely detailed) B. are assisting in a Federal investigation C. are supervised by a Federal employee 3. Such personnel would include, for example, Special US Attorneys, Special Deputy US Marshals, and other persons formally appointed as Federal employees. Special Deputy US Marshals are deputized by the US Marshals Service. 4. State and local personnel deputized under 21 USC §878 by the DEA or the US Attorney’s Office in a narcotics investigation may not have access to tax information because they are not considered Federal employees for purposes of the disclosure laws. 5. Once state or local personnel are formally appointed, they become subject to all the prohibitions on access, use, and disclosure of tax information in the IRC and, therefore, subject to the penalties for unauthorized access or disclosure. 6. When state and local personnel are formally appointed, they will be advised in writing of the disclosure restrictions and penalties for unauthorized disclosures. See Exhibit 9.3.1-2, Statement Regarding Use and Disclosure of Federal Tax Information By State or Local Government Employee Appointed to Assist A Federal Grand Jury Investigation, which reflects the required content of such written notice.

9.3.1.5 (04-13-2005) STATE GRAND JURY INFORMATION
1. Because of various problems associated with information developed by state grand juries, access to and use of information developed by a state grand jury depends upon the law of the particular state

Internal Revenue Manual - 9.3.1 Disclosure

involved. Therefore, CT Counsel should be consulted for legal advice prior to IRS acceptance of such information.

9.3.1.6 (09-25-2006) TITLE 18 SEIZURES
1. Title 26 USC §6103(i)(4) permits tax information obtained under 26 USC §6103(i)(1) to be used in a non-tax Federal prosecution. In addition, 26 USC §6103(i)(4) permits the information to be used for 18 USC §981, 18 USC §982 and 31 USC §5317 civil or criminal forfeitures related to the non-tax violations of 18 USC §1956, §1957, or 31 USC §5313(a) or §5324(a). In addition, if a related statute determination has been made, 26 USC §6103(h)(4) would permit disclosure in a taxrelated forfeiture. 2. There are two methods which allow an agent to utilize tax returns and return information when attempting to include this information in an affidavit for a seizure warrant and subsequent litigation: A. Ex parte Order - If the matter is not related to tax administration. B. Related Statute Determination - If the matter has been determined to be related to tax administration and such determination has been approved by the SAC. 3. Information gathered in a criminal grand jury investigation may be used in conjunction with any civil forfeiture provision of Federal law (see 18 USC §3322). The statute provides for disclosure between a criminal Assistant US Attorney and a civil Assistant US Attorney.

9.3.1.7 (04-13-2005) AGENT ADMINISTRATIVE INFORMATION AND MANAGEMENT DOCUMENTS
1. Documents and data relating to an agent’s daily activities, time reports and other investigation management and internal management documents are not considered to be background material or subject-related information and may be retained for management purposes. However, such documents and data may contain "return information" as defined in 26 USC §6103(b) and be subject to the disclosure provisions.

9.3.1.8 (09-25-2006) POST CONVICTION DISCLOSURES
1. The two areas in which post conviction disclosure may become an issue are publicity and the

Internal Revenue Manual - 9.3.1 Disclosure

probation office. 2. Publicity on an investigation can occur prior to trial, but more commonly happens upon conviction, see IRM 9.3.2, Publicity and Internal Communications, which goes into publicity and disclosure in detail. That subsection covers investigative publicity, as well as requirements and criteria, including clearance procedures for speeches and proposed articles.

9.3.1.8.1 (04-13-2005) Probation Officer
1. Title 26 USC §6103(h)(4) allows disclosure of returns and return information to a US Probation Officer for the purposes of informing the court of any compliance or non-compliance by a taxpayer during such taxpayer’s probationary period under the following circumstances: A. The returns and return information must relate to a taxpayer convicted of a criminal tax violation. B. The US Probation Officer must be charged with the responsibility of determining whether such taxpayer is complying with the terms of his/her probation to the extent that they relate to the Internal Revenue laws. C. The returns and return information are limited to those years specified in the conditions of probation issued by the court, or alternatively to the conviction years and those years for which the taxpayer is placed on probation; and D. The disclosure of the returns and return information would not identify a confidential informant or seriously impair a civil or criminal tax investigation.

Note:
Any disclosure to a US Probation Officer will be coordinated with the local Disclosure Officer. 2. For the purpose of preparing the report contemplated by USCS Fed Rules Crim Proc R 32(c), the special agent’s report may be disclosed to a US Probation Officer in instances where a taxpayer has pleaded guilty or nolo contendere, or has been found guilty of Federal tax law violations. Inspection of the prosecution recommendation report by the US Probation Officer, to the extent material and relevant, should be made at a convenient location such as the office of the US Attorney. Proper care should be exercised to provide adequate security of the report and the information contained therein to prevent unauthorized disclosure.

Internal Revenue Manual - 9.3.1 Disclosure

3. Occasionally, US Probation Officers will request tax information from the IRS as part of a presentence investigation in a non-tax criminal matter. Disclosures may be made to US Probation Officers in these circumstances only as provided in 26 USC §6103(c). Treasury Regulation 301.6103(c)-1 provides the format that must be followed in any taxpayer authorization or waiver that is submitted for the purpose of allowing a US Probation Officer to receive tax information. 4. Following conviction for criminal tax violations, courts in some instances specify that probation of the sentence imposed is conditioned upon satisfactory settlement or payment of civil liability for taxes and penalties. The SAC will take whatever steps are necessary to initiate appropriate legal action in any instance where the taxpayer has failed to comply with the conditions of the probation or supervised release. Title 26 USC §6103(h)(4) permits the disclosure of information contained in IRS files to a US Probation Officer in a judicial proceeding pertaining to tax administration for the purpose of informing the court of any non-compliance with the terms of the taxpayer’s probation or supervised release.

9.3.1.9 (04-13-2005) REPORTING VIOLATIONS OF CRIMES OUTSIDE OF THE JURISDICTION OF IRS
1. Title 26 USC §6103(i)(3) authorizes the disclosure of return information in certain circumstances involving possible violation of Federal crimes, emergency circumstances and terrorist activities. 2. All disclosures under 26 USC §6103(i)(3) for non-tax Federal criminal violations should be in writing or sufficiently documented to provide a permanent record of the information released. This documentation should be retained in the investigative file. 3. If disclosure could impair a criminal tax investigation or any tax administration matter, the SAC should weigh the relative significance of the potential impact and the seriousness and significance of the non-tax violation in determining whether or not to report a crime outside of the jurisdiction of IRS. The SAC should periodically reevaluate the seriousness and significance of the non-tax violation and the impact of disclosure on the criminal tax investigation or tax administration matter to determine if the circumstances underlying the decision not to disclose remain valid.

9.3.1.9.1 (09-25-2006) Reporting Possible Violations of Federal, State, and Local Criminal Laws
1. Often in the conduct of tax investigations, special agents discover evidence of crimes outside the jurisdiction of IRS. What can be revealed and the manner it can be revealed depends on:

Internal Revenue Manual - 9.3.1 Disclosure

A. whether the information is "taxpayer return information" or "return information (other than taxpayer return information)" or non-tax information (see IRM 9.3.1.9) B. whether the IRS offers the information or a different agency requests the information C. the source of the information

9.3.1.9.1.1 (09-25-2006) Return Information (Other Than Taxpayer Return Information) and the Non-Tax Violation
1. Title 26 USC §6103(i)(3)(A) provides for disclosure in writing of return information (other than taxpayer return information) which may constitute evidence of a violation of Federal non-tax criminal statutes to the extent necessary to apprise the head of the appropriate Federal agency charged with enforcing such statutes. Information that merely indicates that a violation may have occurred is sufficient to warrant referral pursuant to 26 USC §6103 (i)(3)(A). However, the information submitted must sufficiently identify the specific criminal act or event to which it relates. 2. Return information (other than taxpayer return information) is information in the possession of the IRS which was not received from the taxpayer, the taxpayer’s representative, or the taxpayer’s return and supporting schedules. 3. Return information (other than taxpayer return information) as it applies to CI may include: A. Local police seize the books and records of a taxpayer during the execution of a search warrant. The police subsequently turn over the books and records to the IRS in conjunction with a Title 26 violation. The source of this information is the police, who were not acting on behalf of the taxpayer. In this example, the books and records are return information (other than taxpayer return information). B. A transcript is made of a conversation between an informant who consented to being monitored and the taxpayer who is the subject of a Title 26 investigation. The transcript of both the informant’s and the taxpayer’s remarks is regarded as return information (other than taxpayer return information). The source of the information in this instance is the informant. C. Additional examples can be found in IRM 11.3.28, Disclosure of Official Information, Disclosure to Federal Agencies for Administration of Non-tax Criminal Laws. 4. When return information (other than taxpayer return information) which may constitute evidence

Internal Revenue Manual - 9.3.1 Disclosure

of a violation of Federal non-tax criminal statutes is received by a CI employee, he/she should prepare a memorandum to the SAC. The memorandum should contain the following information relating to the violation: A. name, social security number, address, and aliases of subject (if known). B. business or occupation of subject (if known) C. facts and circumstances surrounding the non-tax violation D. US Code sections believed to have been violated E. specific source of information, i.e., third party, taxpayer, taxpayer’s representative, taxpayer’s return F. the circumstances under which the information was obtained G. agency that this violation would be of interest, i.e., US Attorney (Judicial District), Strike Force Attorney (location), other agency (specify) H. system of Records from which information was obtained I. a statement as to whether or not disclosure would identify a confidential informant or seriously impair a civil or criminal tax investigation 5. The SAC will furnish such information to the responsible Disclosure Officer for appropriate dissemination in accordance with IRM 11.3, Disclosure of Official Information. Return information relating to the commission of non-tax Federal criminal offenses or violations of nontax Federal criminal laws may be disclosed pursuant to 26 USC §6103(i)(3)(A) by officials authorized under Delegation Order 156 (as revised). Criminal Investigation personnel do not have 26 USC §6103(i)(3)(A) disclosure authority. 6. In instances where the information was obtained during the course of a wagering (26 USC Chapter 35) investigation, some information may not be disclosed in accordance with 26 USC §4424, see IRM 11.3, Disclosure of Official Information, for disclosure procedures. 7. If the information concerns alleged impersonations of a Federal officer, see IRM 9.3.1.9.4.6. If the information indicates forgery of a United States government check is involved in an investigation within the jurisdiction of CI, see IRM 9.3.1.9.4.4. 8. In the event that a disclosure would seriously impair a criminal or civil tax investigation or identify a confidential informant, the SAC will forward his/her recommendations through channels to the

Internal Revenue Manual - 9.3.1 Disclosure

appropriate official authorized to determine whether information should be withheld based on impairment considerations or the protection of the identity of a confidential source. The Disclosure Officer may be contacted for assistance in this regard. 9. If in doubt as to whether the information may be disclosed, contact the responsible Disclosure Officer.

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Internal Revenue Manual - 9.3.1 Disclosure (Cont. 1)

Chapter 3. Disclosure and Publicity Section 1. Disclosure (Cont. 1)

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9.3.1.9 REPORTING VIOLATIONS OF CRIMES OUTSIDE OF THE JURISDICTION OF IRS 9.3.1.10 LIAISON DUTIES 9.3.1.11 SUBPOENAS SERVED ON CI EMPLOYEES AND REQUESTS TO TESTIFY 9.3.1.12 REQUESTS FROM CONGRESSIONAL COMMITTEES, THE PRESIDENT, OR PURSUANT TO A TAX TREATY 9.3.1.13 REQUESTS FROM OTHER FEDERAL AGENCIES 9.3.1.14 REPORTS TO CONGRESSIONAL COMMITTEES INCLUDING THE GENERAL ACCOUNTING OFFICE 9.3.1.15 INSPECTOR GENERAL AND OFFICE OF PERSONNEL MANAGEMENT DISCLOSURES 9.3.1.16 FOREIGN TAX TREATY INFORMATION EXCHANGES 9.3.1.17 PROTECTING RECORDS FROM UNAUTHORIZED DISCLOSURE 9.3.1.18 PROTECTING TAXPAYER RECORDS AGAINST UNAUTHORIZED ACCESS 9.3.1.19 PENALTIES FOR UNAUTHORIZED INSPECTION AND DISCLOSURE 9.3.1.20 REPORTING UNAUTHORIZED ACCESS, INSPECTIONS AND DISCLOSURES 9.3.1.21 NON-DISCLOSURE LAWS OTHER THAN 26 USC §6103 PERTAINING TO CRIMINAL INVESTIGATION DIVISION ACTIVITIES Exhibit 9.3.1-1 Memorandum of Understanding: Access to Grand Jury Matters for Internal Audit Purposes Exhibit 9.3.1-2 Statement Regarding Use and Disclosure of Federal Tax Information By State or Local Government Employee Appointed to Assist A Federal Grand Jury Investigation

9.3.1.9 REPORTING VIOLATIONS OF CRIMES OUTSIDE OF THE JURISDICTION OF IRS 9.3.1.9.1 Reporting Possible Violations of Federal, State, and Local Criminal

Internal Revenue Manual - 9.3.1 Disclosure (Cont. 1)

Laws 9.3.1.9.1.2 (04-13-2005) Emergency Circumstances
1. Title 26 USC §6103(i)(3)(B) contains provisions by which relevant return information may be disclosed in situations involving imminent danger of death or physical injury to any individual. Such situations may include imminent danger of death or physical injury due to a terrorist incident, threat, or activity. Criminal Investigation special agents are authorized to make an immediate determination and subsequent disclosures to the extent necessary to appraise appropriate officers or employees of any Federal or state law enforcement agency of such circumstances pursuant to 26 USC §6103(i)(3)(B)(i). In addressing immediate disclosures of this nature, and if time permits, CI personnel should consult with their local Disclosure Official. 2. For purposes of an imminent danger disclosure, both taxpayer and other than taxpayer return information may be disclosed. Disclosure is limited to only that data which is needed to stop the imminent danger. Returns cannot be disclosed, although data may be extracted from the returns for purposes of making a 26 USC §6103(i)(3)(B) disclosure. 3. If additional information beyond that which is necessary to stop the imminent danger is needed for a non-tax Federal criminal investigation, an ex parte court order must be obtained.

9.3.1.9.1.3 (04-13-2005) Non-Tax Crime Information (Witnessed or Received Orally or in Writing) Not Related to Tax Violations
1. RESERVED

9.3.1.9.2 (04-13-2005) Terrorism-Related Provisions of 26 USC §6103(i)
1. This subsection describes what can be revealed if the information is offered by the IRS or requested by another agency.

Note:
These provisions expired 12-31-03. As of March 2004 they have not been extended.

9.3.1.9.2.1 (04-13-2005)

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Disclosure of Information to Appropriate Officials
1. Title 26 USC §6103(i)(3)(C) allows IRS on its own volition to disclose in writing return information (other than taxpayer return information) that may be related to a terrorist incident, threat, or activity to the extent necessary to apprise the head of the appropriate investigating/responding Federal law enforcement agency. For purposes of this section, taxpayer identity information is not considered taxpayer return information. The head of the agency may redisclose such information to officers and employees of such agency to the extent necessary to investigate or respond to the terrorist incident, threat, or activity. 2. The IRS will furnish information involving substantive narcotics violations either directly to the DEA; the FBI; or to the Assistant Attorney General, Criminal Division, DOJ, in accordance with the disclosure laws and regulations. (The Attorney General assigned jurisdiction to the FBI to investigate Federal drug offenses effective January 21, 1982).

9.3.1.9.2.2 (09-25-2006) Requested by Another Federal Agency
1. All terrorism-related requests by other Federal agencies for returns or return information will be forwarded to the Disclosure Coordinator for Antiterrorism Disclosures. Except for imminent danger situations (see (6) below), the authority to make terrorism-related disclosures of returns and return information pursuant to the 26 USC §6103(i) provisions has only been delegated to Disclosure personnel. 2. 26 USC §6103(i)(7)(A) allows IRS to disclose return information (other than taxpayer return information) upon the written request of the head (or his/her delegate) of a Federal law enforcement agency that is personally and directly engaged in the response to or investigation of any terrorist incident, threat, or activity. A taxpayer's identity is not considered taxpayer return information for this purpose. Such written request must set forth the specific reason(s) why such disclosure may be relevant to a terrorist incident, threat or activity. Limited redisclosure is permitted by state or local law enforcement employees who are part of a team with the Federal law enforcement agency involved in such a response/investigation. 3. Title 26 USC §6103(i)(7)(B) allows IRS to disclose return information (other than taxpayer return information) upon the written request of an officer or employee of DOJ or Treasury who is appointed by the President with the advice and consent of the Senate or who is the Director of the US Secret Service, if such individual is responsible for the collection and analysis of intelligence and counterintelligence concerning any terrorist incident, threat, or activity. Taxpayer identity information for this purpose is not considered taxpayer return information. Such written request must set forth the specific reason(s) why such disclosure may be relevant to a terrorist incident, threat, or activity. Disclosures under 26 USC §6103(i)(7)(B) may be made to those officers and employees of DOJ, Treasury, and other Federal intelligence agencies who are personally and

Internal Revenue Manual - 9.3.1 Disclosure (Cont. 1)

directly engaged in the collection or analysis of intelligence and counterintelligence information or investigation concerning any terrorist incident, threat, or activity. Such disclosures may be made solely for the use of such officers and employees in such an investigation, collection, or analysis. 4. Title 26 USC §6103(i)(7)(C) sets up an ex parte court order process similar to 26 USC §6103(i)(1). It provides that, upon grant of an ex parte order by a Federal district court judge or magistrate, returns and return information with respect to a specified period(s) shall be disclosed to officers and employees of any Federal law enforcement or Federal intelligence agency who are personally and directly engaged in any investigation, response to, or analysis of intelligence and counterintelligence information concerning any terrorist incident, threat, or activity. Such disclosures may be made solely for the use of such officers and employees in the investigation, response, or analysis, and, subject to 26 USC §6103(i)(4), in any judicial, administrative, or grand jury proceedings pertaining to the terrorist incident, threat, or activity. The application for the order must be approved by the Attorney General, Deputy Attorney General, Associate Attorney General, and Assistant Attorney General, or any US Attorney. In granting the order, the judge/magistrate must determine that there is reasonable cause to believe, based on information found to be reliable, that the return or return information may be relevant to a matter relating to such terrorist incident, threat, or activity. In addition, the judge/magistrate must determine that the return or return information is sought exclusively for use in a Federal investigation, analysis, or proceeding involving a terrorist incident, threat, or related activity. 5. Title 26 USC §6103(i)(7)(D) allows the Commissioner of Internal Revenue to authorize an application for an ex parte order described in 26 USC §6103(i)(7)(C). In granting the order, the Federal district court judge/magistrate must determine that, on the basis of the facts submitted by the applicant, there is a reasonable cause to believe, based upon information believed to be reliable, that the return information may be relevant to a matter involving a terrorist incident, threat, or activity. Information may be disclosed pursuant to 26 USC §6103(i)(7)(D) only to the extent necessary to apprise the head of the appropriate Federal law enforcement agency responsible for investigating or responding to a terrorist incident, threat, or activity. Information so disclosed shall be solely for use in a Federal investigation, analysis, or proceeding concerning a terrorist incident, threat, or activity. The IRS disclosures to DOJ, made in support of an application for an ex parte order described in 26 USC §6103(i)(7)(D), are authorized under 26 USC §6103(i)(3)(C)(ii). 6. Pursuant to 26 USC §6103(i)(3)(C)(i), in situations involving imminent danger of death or physical injury to any individual, CI special agents and TIGTA special agents are authorized to make immediate determination and subsequent disclosures to the extent necessary to apprise appropriate officers or employees of any Federal or state law enforcement agency of the potential danger. This procedure is discussed in IRM 9.3.1.9.1.2.

9.3.1.9.3 (09-25-2006)

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Source of Information
1. Other considerations may prohibit the disclosure of tax information for non-tax criminal purposes. This includes: A. information which would identify a confidential informant or seriously impair a civil or criminal tax investigation B. information obtained under a tax treaty C. wagering tax information protected under 26 USC §4424 (see 26 USC §6103(o)(2)) D. information obtained from, or on behalf of, a grand jury proceeding, unless a valid court order permitting the use of such information has been issued under the USCS Fed Rules Crim Proc R 6(e) E. other information that cannot be disclosed under 18 USC §1905

9.3.1.9.4 (09-25-2006) Situations Which May Require Disclosure
1. Return information (other than taxpayer return information) relating to the commission of non-tax Federal criminal offenses or violations of non-tax Federal criminal laws, which is obtained by a special agent during the course of an official investigation, will be reported by memorandum to the SAC (see IRM 9.3.1.9.1.1) and may be disclosed pursuant to 26 USC §6103(i)(3)(A) by officials authorized under Delegation Order 11-2 (formerly Delegation Order 156 (Rev. 17)).

9.3.1.9.4.1 (04-13-2005) Emergencies
1. In emergency circumstances involving the imminent danger of death or physical injury to any individual, the Secretary may disclose return information to the extent necessary to apprise appropriate officers and employees of any Federal or state law enforcement agency (26 USC §6103(i)(3)(B)(i)), see IRM 9.3.1.9.1.2 for further discussion. 2. In emergency circumstances involving flight from Federal prosecution, the Secretary may disclose return information to the extent necessary to apprise appropriate officers or employees of any Federal law enforcement agency (26 USC §6103(I)(3)(B)(ii)). Special Agents in Charge have 26 USC §6103(i)(3)(B)(ii) disclosure authority.

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9.3.1.9.4.2 (04-13-2005) Threats To The President and Certain Government Officials
1. The US Secret Service is charged with the responsibility of protecting the President and certain other government officials and public figures, including: A. members of the President’s immediate family B. the President-elect C. the Vice President or other officer next in the order of succession to the Office of President D. former Presidents E. the wife, widow, and minor children of former Presidents F. Presidential and Vice Presidential candidates G. visiting heads of foreign states or foreign governments 2. The Executive Protection Service, under the direction of the US Secret Service, is responsible for the protection of the Executive Mansion and foreign diplomatic missions in the District of Columbia metropolitan area. 3. Any employee who receives information either orally or in writing which indicates a potential threat to the health or safety of one of the individuals in (1) above should report the information immediately by telephone to the nearest US Secret Service office or to the US Secret Service Intelligence Division, Washington, DC. 4. If an employee discloses information as described in (3) above, he/she shall prepare a memorandum setting forth all the facts disclosed, together with any other facts bearing on the matter and full details as to the circumstances under which such information was acquired. The memorandum should be transmitted immediately to the SAC and a copy should be forwarded to the local Disclosure Officer who will prepare any necessary 26 USC §6103(p)(3) accounting forms.

9.3.1.9.4.3 (04-13-2005) Reporting Other Information of Interest to the Secret Service
1. The US Secret Service is also charged with the responsibility of identifying individuals or groups

Internal Revenue Manual - 9.3.1 Disclosure (Cont. 1)

who may be involved in the following activities: A. the use of bodily harm, assassination, or kidnapping as a political weapon. This includes training and techniques used to carry out the act B. persons or groups who insist upon personally contacting high government officials for redress of imaginary grievances, etc C. any person who makes oral or written threatening, irrational, or abusive statements about high government officials D. professional gate crashers E. terrorists (individuals, groups) and their activities (bombing, etc.) F. the ownership or concealment by individuals or groups of caches of firearms, explosives, or other implements of war, when it is believed that their intended use is for other than legal purposes G. anti-American or anti-US government demonstrations in the United States or overseas H. information regarding civil disturbances I. counterfeiting of US or foreign obligations, i.e., currency, coins, stamps, bonds, US Treasurer’s checks, Treasury securities, Department of Agriculture Food Stamp coupons, etc J. the forgery, alteration, and fraudulent negotiation of US Treasurer’s checks, US Government bonds and Government Travel Requests (GTR’s) 2. When the US Secret Service requests information concerning any of their responsibilities as described in (1) above when investigating threats against the President, disclosure can only be made to the US Secret Service by those individuals so authorized in Delegation Order 156. 3. Any disclosure made under (2) above is limited by the provisions of 26 USC §6103. 4. In all instances, the person making the referral will prepare and submit a memorandum detailing the information disclosed and the basis for the disclosure. The memorandum will be forwarded through the head of the office to the responsible Disclosure Officer.

9.3.1.9.4.4 (04-13-2005)

Internal Revenue Manual - 9.3.1 Disclosure (Cont. 1)

Forgery of a United States Government Check
1. The local Disclosure Officer should be contacted in those instances whenever information is received or discovered which indicates a forged United States government tax refund check is involved in an investigation within the investigative jurisdiction of CI (including any investigation involving checks issued to fictitious payees).

Note:
Currently the SAC cannot make disclosure to the Secret Service as it is not an agency of the Department of the Treasury. 2. In order to protect the development by CI of a possible criminal tax investigation, the US Secret Service will make:
q

no investigation in the forgery case until such action has been coordinated with CI no consultation with the United States Attorney until such consultation can be done jointly with representatives of CI or until such consultation has been coordinated with the SAC no action on any question of settlement of the forgery case until such action is agreeable with CI

q

q

3. Copies of pertinent affidavits, handwriting exemplars, personal and criminal history, and other items of interest will be made immediately available by each agency to the other investigating agency, and each agency will keep the other informed of the progress of the investigation being made to avoid unnecessary duplication of effort. 4. Disclosure regarding US government checks, other than tax refund checks, must be made pursuant to the guidelines contained in IRM 9.3.1.9.1.

9.3.1.9.4.5 (04-13-2005) Diversion of Nuclear Material
1. Information concerning potential diversion of nuclear material should be immediately reported by the special agent to his/her SSA who will transmit the information at once to the nearest FBI field office and, as soon as practicable, to the SAC. 2. In all instances, the SSA making the referral will prepare a written report containing:

Internal Revenue Manual - 9.3.1 Disclosure (Cont. 1)

A. all the information furnished to the FBI B. the name and title of the person to whom the information was given C. time and date of the referral 3. This report should be forwarded by the SAC to the Chief, CI, as confirmation of the telephone referral. If this information is return information, the procedures in IRM 9.3.1.9.1 should be followed. In emergency situations, the Disclosure Officer should be contacted immediately so that he/she may contact the Office of Governmental Liaison and Disclosure for consultation, if necessary.

9.3.1.9.4.6 (12-02-2005) Impersonations of a Federal Officer
1. The Treasury Inspector General for Tax Administration (TIGTA) is charged with the responsibility to investigate charges against persons alleged to be impersonating employees of the IRS or wrongly using IRS seals or other identifying marks. All allegations of this nature should be reported promptly to TIGTA.

9.3.1.9.4.7 (09-25-2006) Violations of Law Involving Serious Crimes by Informants Not Connected with a IRS Assignment
1. Whenever the IRS has knowledge of the actual commission of a serious crime not connected with a IRS assignment by a CI/CW, the SAC shall make a determination of the advisability of notifying appropriate law enforcement authorities in accordance with IRM 11.3, Disclosure of Official Information. For the purpose of these IRM procedures, the phrase, " serious crime," means any crime which is a felony under Federal or state law. 2. Approval of the Director, Field Operations will be required when it is advisable not to notify another law enforcement agency. In such cases, the SAC will notify the Director, Field Operations, by memorandum, of the facts and circumstances concerning the informant’s law violation and also provide a recommendation on reporting the violation and on continued use of the CI/CW. 3. In determining the advisability of notifying appropriate law enforcement authorities of criminal activity by a CI/CW, the reviewing or approving officials, as appropriate, shall consider the following factors:

Internal Revenue Manual - 9.3.1 Disclosure (Cont. 1)

A. the seriousness of the crime in terms of danger to life and property B. the degree of certainty of the information regarding the criminal activity C. whether the appropriate authorities already know of the criminal activity and the CI/CW's informant’s identity D. the degree to which notification would endanger the life of the CI/CW or any other person. 4. Disclosures involving tax information must follow the procedures (see IRM 9.3.1.9).

9.3.1.10 (09-25-2006) LIAISON DUTIES
1. In all liaison contacts, IRS personnel shall adhere to existing disclosure provisions, particularly 26 USC §4424 and 26 USC §6103. Also, see IRM 9.3.1.9.

9.3.1.10.1 (04-13-2005) Liaison with State and Local Law Enforcement Officials
1. The SAC shall maintain liaison with local and state law enforcement officials to identify violations which warrant action by CI and to keep current in regard to enforcement problems in his/her office.

9.3.1.10.2 (04-13-2005) Liaison with Other Federal Agencies
1. The SAC will meet with other agencies to set up direct lines of communication for overall cooperation aimed at enhancing the respective law enforcement efforts of both agencies, including all civil and criminal aspects of financial crimes. Information will be obtained at the local level on an investigation-by-investigation basis, only as authorized by 26 USC §6103. 2. The SAC will brief local Federal law enforcement officials on the disclosure provisions contained in the wagering law (26 USC §4424); those implemented through the Tax Reform Act of 1976 (26 USC §6103); and the implications of these provisions upon the IRS disclosure of information to other Federal agencies and the IRS procedures for informing other agencies of non-tax violations. The SAC will ensure that special agents follow the procedures set out in IRM 9.3.1.9 regarding indications of other Federal violations observed during an investigation.

9.3.1.10.3 (09-25-2006)

Internal Revenue Manual - 9.3.1 Disclosure (Cont. 1)

Disclosure of Information Received From Other Federal Law Enforcement Agencies
1. The IRS is authorized by other Federal law enforcement agencies to receive certain information and reports from their investigative files. Access to information or reports received from other Federal investigative agencies should be limited to IRS personnel who require the information in the performance of their official duties. 2. Unless specifically provided for under 26 USC §6103 or other laws or regulations, reports of investigations or other information received from other Federal agencies will not be: A. made available to the subject of an investigation, his/her attorney, or any other representative in connection with any official or private litigation B. introduced into evidence (example presentencing reports) C. incorporated into any paper or record of a court or other proceeding, which the subject, his/her attorney, or other representative have a right to see 3. During inquiries conducted by CI involving information received from another law enforcement agency, there should be no disclosure to any person that his/her name was obtained from or that he/she is mentioned in any report or information obtained from that agency, unless specifically provided for under 26 USC §6103 or other laws or regulations. 4. Reports received from other Federal enforcement agencies shall be maintained in secure storage facilities (see IRM 1.16.8, Emergency Planning and Incident Reporting). Sufficient records shall be maintained to show the name and position of each individual who inspects such a report, the date of the inspection, and the purpose of the inspection. Such reports shall not be removed from CI custody and no copies of any such reports shall be made. 5. Any information or leads obtained from such reports shall be developed by independent investigation, and such reports shall not be used as exhibits or mentioned in final reports. 6. No action shall be taken which identifies informants or investigative techniques employed by other Federal agencies. 7. Such reports shall be returned upon request or when existing operating procedures require that such reports be returned to the agency involved. The report must be returned prior to submission of the special agent’s final report. 8. Upon receipt of financial information from other Federal agencies involving a completed

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investigations, which contains possible tax related information, e.g., evidence of gross wagers received by a gambling operation reflecting a liability for wagering excise and income tax or evidence of income by an individual from embezzlement, bribery, extortion, or shylocking, an information item will be prepared. The information item will be evaluated for criminal potential. If criminal potential does not exist, the information item will be forwarded to the appropriate civil operating division provided that it does not contain grand jury information.

9.3.1.10.4 (04-13-2005) Details of CI Employees to Other Agencies
1. The Chief, CI; Director, Field Operations; or the SAC will provide a letter of notification to his/her employees who are detailed to other agencies. Exhibit 9.11.3–4 found in IRM 9.11.3, Investigative Property, is an example of such a letter. 2. The letter should address issues of access to tax returns and return information. Access to tax returns and return information is authorized for those official duties which require disclosure for tax administration purposes. Access for other matters is governed by the provisions of 26 USC §6103(i). 3. The letter must also address the use of IRS pocket commissions and enforcement badges. They may be used for official identification purposes, but the letter will clarify the advice IRS employees should give those contacted (see IRM 9.5.2, Grand Jury Investigations). 4. Employees who have a need to know the details will receive an information copy of the appointment letter.

9.3.1.11 (09-25-2006) SUBPOENAS SERVED ON CI EMPLOYEES AND REQUESTS TO TESTIFY
1. Periodically, employees of CI are served with subpoenas to produce Internal Revenue records, information, or testify in a judicial or administrative proceeding. Treasury Regulation 301.9000–1 requires IRS employees to obtain appropriate authorization before they comply with a subpoena. 2. The authorities permitted to approve the testimony or production of record vary with the type of request. See Delegation Order 11-2, Authority to Permit Disclosure of Tax Information and to Permit Testimony or the Production of Documents.

9.3.1.11.1 (04-13-2005) IRS Tax Administration Proceedings

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1. An exception to the general rule is that no authorization is needed when testimony or production of records is requested by the attorney for the government in a tax administration investigation, e.g., testifying for the government in a criminal tax investigation or Tax Court case. However, authorization is needed when testimony or records are sought by a party to the litigation other than the government (e.g., the defense in a criminal investigation, a petitioner in a US Tax Court case, the plaintiff in a Federal tort claims case against an IRS employee, or the plaintiff in a refund litigation case). 2. If the request to testify or produce information in a tax proceeding comes from someone other that the attorney for the government, contact CT Counsel immediately. Criminal Tax Counsel is responsible for preparing the authorization for approval and signature in this type of situation.

9.3.1.11.2 (04-26-1999) Subpoenas Requesting Grand Jury Information
1. Subpoenas and requests for information and documents obtained during a grand jury investigation should be referred to the attorney for the government in order to comply with the requirements of Fed R Crim P R6(e).

Note:
Be aware that if any of the information was collected during the administrative phase of the investigation, IRS may have to authorize the release of that portion of the information.

9.3.1.11.3 (04-13-2005) Procedures for Obtaining Authorization To Testify In Other Than Tax Administration Cases
1. Any request or demand for testimony or production of IRS information, along with any pertinent facts and/or background information, is to be immediately forwarded through the manager to the Disclosure Officer. Failure to do so in a timely manner may subject the employee and the IRS to sanctions such as contempt of court. This information may be transmitted by telephone or fax when there is not enough time for a formal transmittal and mailing. 2. The Disclosure Officer will prepare the authorization and clear it through Counsel prior to its submission to the appropriate official for signature.

9.3.1.12 (04-13-2005) REQUESTS FROM CONGRESSIONAL COMMITTEES, THE

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PRESIDENT, OR PURSUANT TO A TAX TREATY
1. Any requests for on-site visits, or demands for testimony or production of Internal Revenue information from Congressional Committees, the President, or other persons under 26 USC §6103(g) or pursuant to a Tax Treaty must be immediately transmitted through the SSA to the SAC, along with any pertinent facts and/or background information. He/she will send the request to the Chief, CI. 2. Authorizations in these instances are prepared by the Governmental Liaison and Disclosure Office (or other designated office), cleared through the Assistant Chief Counsel (Disclosure and Privacy Law) and authorized by the Commissioner or the Deputy Commissioner.

9.3.1.13 (04-13-2005) REQUESTS FROM OTHER FEDERAL AGENCIES
1. Requests for tax-related information from the following governmental offices located in Washington, DC, shall be sent by the SAC to the Chief, CI: A. national headquarters office of the FBI B. national headquarters office of Selective Service (records of Selective Service applicants are confidential and the information therein may not be released except in instances where extraordinary circumstances, such as national security consideration, require disclosure) C. all Congressional committees and subcommittees and their investigatory staffs D. Securities and Exchange Commission E. Headquarters IRS F. Federal Deposit Insurance Corporation G. any other requests for information to be obtained from departments and agencies in Washington, DC, which are not routine in nature 2. If there is a question as to whether the material is of a routine nature, the request should be sent to the Chief, CI, who will determine its disposition. 3. Any requests for information from other governmental offices located in Washington, DC, other than those covered in paragraph (1), shall be forwarded to the head of the other agency by the SAC.

Internal Revenue Manual - 9.3.1 Disclosure (Cont. 1)

9.3.1.14 (04-26-1999) REPORTS TO CONGRESSIONAL COMMITTEES INCLUDING THE GENERAL ACCOUNTING OFFICE
1. Other than ad hoc information requested by Congressional Committees, certain reports and procedures have been established in dealing with recurring reports or specific situations involving Congressional Committees. The following subsections describe a few that might concern CI.

9.3.1.14.1 (09-25-2006) Approval of the Joint Committee on Taxation to Correct Misstatement of Fact on an Investigation
1. There may be instances when the limited disclosure of tax information, to the extent necessary to correct misstatement of fact, may be warranted. When it is determined that such a correction is necessary for tax administration purposes, the Commissioner is authorized to make such disclosures, but only with the approval of the Joint Committee on Taxation on an investigation-byinvestigation basis (see 26 USC §6103(k)(3)). 2. The IRS should seek authorization to disclose when: A. A misstatement of fact has the potential for instigating taxpayer noncompliance or causing a proliferation of taxpayer noncompliance. B. A misstatement of fact discredits the integrity of the IRS. 3. Whenever field personnel become aware of any situation where a misstatement may warrant correction by the IRS through the disclosure of return information, they should contact their Disclosure Office for assistance. Particular attention should be paid to those situations involving abusive tax shelters. 4. Additional information may be found in IRM 11.3, Disclosure of Official Information.

9.3.1.15 (04-13-2005) INSPECTOR GENERAL AND OFFICE OF PERSONNEL MANAGEMENT DISCLOSURES
1. Disclosure to TIGTA and the Office of Personnel Management (OPM) have certain unique features.

Internal Revenue Manual - 9.3.1 Disclosure (Cont. 1)

9.3.1.15.1 (04-13-2005) Office of Audit
1. The Office of the Treasury Inspector General for Tax Administration can have access to information covered under 26 USC §6103. 2. Criminal Investigation Division field offices should follow established protocol when responding to TIGTA auditors' requests for information on grand jury investigations. 3. When TIGTA makes a request involving a matter investigated by a grand jury, the CI special agent handling or responsible for the case will review the case file and redact any grand jury information. 4. Information obtained prior to the grand jury referral and all information obtained during the investigation which does not constitute a matter occurring before the grand jury, will be furnished to TIGTA. The IRS takes the position that grand jury material is any matter occurring before the grand jury, i.e., testimony, information obtained pursuant to a subpoena, and/or any information that discloses the scope or direction of the investigation. Criminal Investigation Division will advise Office of Audit if full disclosure cannot be made of all items in the file because certain items fall within the scope of Rule 6(e). Criminal Investigation Division will describe in general terms the nature of the items (e.g., a transcript of testimony). 5. If the CI special agent has questions about any specific items, he/she should consult with CT Counsel about whether the information should be redacted. If the special agent and CT Counsel cannot resolve the question as to whether specific information is grand jury related, CI may then consult with the attorney for the government who handled the criminal case. 6. On open investigations (not fully adjudicated), prior to providing any documents to TIGTA auditors, CI will consult the attorney for the government assigned to the investigation to ensure that the attorney for the government does not object to the information being released to TIGTA auditors. If the attorney for the government believes that the release of such information could damage the ongoing investigation, CI, TIGTA and the government attorney will determine whether an accommodation can be made. 7. If TIGTA believes that the items are not covered by Rule 6(e) and should be released, TIGTA will make a specific request to CI limited to the items important to completing the audit. Criminal Investigation Division will promptly reconsider releasing the items in the request and advise TIGTA of their decision. If TIGTA and CI cannot agree, the final decision will be made by the attorney for the government. 8. All parties to the dispute will treat it as a priority and will provide an expedited review of the

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issues. They will attempt to resolve the dispute at the lowest possible level, seeking CT Counsel advice as soon as possible. If all attempts within the IRS fail to resolve the issue, the Division Counsel/Associate Chief Counsel (Criminal Tax) may, if unable to resolve the matter, refer the matter to the DOJ for final resolution.

9.3.1.15.2 (09-25-2006) Office of Personnel Management
1. Title 26 USC §6103(l)(4)(B) permits the disclosure of returns and return information to Department of the Treasury officers and employees for use in a personnel action or proceeding, or in preparation for such action or proceeding, to the extent necessary to advance or protect the government’s interests. 2. This provision permits the IRS to disclose returns and return information to OPM when such information is needed in a personnel action of any kind. The reclassification of position grade levels by OPM is an "administrative action" within the meaning of 26 USC §6103(l)(4)(B), and OPM’s desk audits are considered preparation for this action. 3. Disclosure to OPM under the provisions of 26 USC §6103(l)(4)(B) does not require a written request, but only officials with Delegation Order 156 authority may authorize such disclosures. Blanket disclosures of returns and return information to OPM should not be made. The need for confidentiality must be balanced against the need for specificity of information. See IRM 11.3.20, Personnel Records for additional guidelines to be followed.

9.3.1.16 (04-13-2005) FOREIGN TAX TREATY INFORMATION EXCHANGES
1. Tax treaties may contain secrecy clauses restricting disclosure of information exchanged pursuant to the treaty. (This is currently true of the US-Canadian Simultaneous Criminal Investigation Program. Canadian Customs and Revenue Agency (CCRA) should be alerted if any disclosure is contemplated). Access to such information is governed by 26 USC §6103. 2. Director, Operations Policy and Support (CI:OPS) must be consulted prior to any disclosure or publicity involving international investigations wherein another country has participated in the investigation.

9.3.1.17 (04-13-2005) PROTECTING RECORDS FROM UNAUTHORIZED DISCLOSURE
1. The Chief, CI; Directors, Field Operations; SACs, and ASACs, are responsible for safeguarding

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CI records deposited in their respective offices. They will take adequate precautions, by arranging for safe storage facilities and the installation of necessary security devices, to guard against the loss or unauthorized disclosure of these records. The Physical Security Program, IRM 1.16, lists the minimum protection required for the various kinds of CI records and documents. 2. Special agents and other CI personnel are responsible for the safeguarding of CI records in their custody against loss, destruction, or unauthorized access, and against unauthorized disclosure of information. To prevent unauthorized access or disclosure, documents and records in their possession, when not in use, will be provided with three protection points in accordance with IRM 1.16.

9.3.1.18 (04-13-2005) PROTECTING TAXPAYER RECORDS AGAINST UNAUTHORIZED ACCESS
1. Unauthorized Access (UNAX) is the willful unauthorized access or inspection of any return or return information. This does not include accidental or inadvertent access or inspection of a return or return information. 2. Special agents and other CI personnel are not allowed to access or inspect taxpayer records when involvement in the matter could cause a possible financial conflict of interest or when there is a personal relationship or an outside business relationship that could raise questions about impartiality in handling the tax matter. 3. Unauthorized Access (UNAX) covers both paper and electronic records of returns and return information, including local databases with return information. 4. The Office of the Treasury Inspector General for Tax Administration, has total responsibility for investigation of all allegations of UNAX.

9.3.1.19 (09-13-2006) PENALTIES FOR UNAUTHORIZED INSPECTION AND DISCLOSURE
1. Criminal and civil sanctions may be imposed upon persons who have made intentional UNAX or disclosure violations. 2. The TIGTA has investigative jurisdiction of unauthorized inspection or disclosure of Federal tax information by Federal or state employees, corporate shareholders, contractors, and others.

9.3.1.19.1 (04-13-2005)

Internal Revenue Manual - 9.3.1 Disclosure (Cont. 1)

Unauthorized Disclosure of Information
1. Title 26 USC §7213 provides criminal penalties of up to a $5,000 maximum fine, imprisonment for a maximum of 5 years, or both, together with the cost of prosecution and dismissal from employment for the willful unauthorized disclosure of a return or return information. 2. An unauthorized disclosure is made willfully when it is done voluntarily and intentionally with full knowledge that it is wrong.

9.3.1.19.2 (09-13-2006) Unauthorized Access or Inspection of Return or Return Information
1. Title 26 USC §7213A provides criminal penalties of a fine not to exceed $1000, imprisonment for a period of not more than one year, or both, together with the cost of prosecution and dismissal for the willful unlawful access or inspection of any return and return information. 2. Unauthorized access to return or return information is to be reported to the immediate CI supervisor. The CI supervisor will advise TIGTA of all intentional unauthorized accesses. 3. For a complete discussion of unauthorized accesses or disclosures of confidential tax information, see IRM 11.3.38.6, Referral of Unauthorized Disclosure and/or Inspection.

9.3.1.19.3 (04-13-2005) Civil Liability Under 26 USC §7431
1. Civil actions for damages are permitted against the Federal government rather than against the Federal employee. 2. Title 26 USC §7431 provides that where a Federal officer or employee knowingly or negligently discloses a return or return information in violation of the disclosure restrictions, the wronged party may bring a civil action for damages against the government. 3. Certain non-Federal employees may be sued for damages under 26 USC §7431, if they have violated the disclosure statutes. 4. No liability shall arise under 26 USC §7431 where the disclosure was the result of a good faith but erroneous interpretation of 26 USC §6103. 5. If employees are criminally charged with inspection or disclosure of a taxpayer's return or return information, the IRS is required to notify the taxpayer that their records were inspected or

Internal Revenue Manual - 9.3.1 Disclosure (Cont. 1)

disclosed. 6. Any IRS official or employee who receives a complaint or summons in a civil suit containing allegations of unauthorized disclosure should immediately notify his/her supervisor and Counsel.

9.3.1.20 (09-25-2006) REPORTING UNAUTHORIZED ACCESS, INSPECTIONS AND DISCLOSURES
1. Internal Revenue Service employees are required to report suspected instances of willful (voluntarily and intentional with full knowledge of wrong doing) unauthorized access, inspection, or disclosure of returns and return information to TIGTA. 2. Inadvertent unauthorized access, inspection and disclosure are not willful and are therefore exempt from the above TIGTA reporting procedures. Criminal Investigation employees must report violations of this nature directly to their immediate CI supervisor who, in turn, is to report them to the local disclosure officer. Form 10848, Improper Disclosure Report, is used for this purpose (see IRM 11.3.38.6).

9.3.1.21 (04-13-2005) NON-DISCLOSURE LAWS OTHER THAN 26 USC §6103 PERTAINING TO CRIMINAL INVESTIGATION DIVISION ACTIVITIES
1. Employees of the IRS have access to information falling under the provisions of other nondisclosure regulations. IRS employees must abide by those regulations, just as the IRS subjects parties permitted to have tax information to the limitations and penalties associated with 26 USC §6103. Criminal Investigation Division employees most frequently encounter disclosure regulations in the areas of information obtained in the grand jury setting, from intercepted communications, or from the Social Security Administration.

9.3.1.21.1 (04-26-1999) Disclosure of Grand Jury Information
1. See IRM 9.3.1.4.

9.3.1.21.2 (09-25-2006) Disclosure of Intercepted Communications
1. All persons having access to transcripts of private conversations are reminded that the contents of

Internal Revenue Manual - 9.3.1 Disclosure (Cont. 1)

intercepted communications may be disclosed solely within the course of their official duties and on a need-to-know basis. Any disclosure of the contents of intercepted messages, which is not pursuant to 18 USC §2517, may subject the offending party to a civil action for damages under 18 USC §2520, and the possibility of having to show cause why he/she should not be held in contempt under 18 USC §2518(8)(c).

Note:
Once the contents of intercepted communications are made known to IRS officials, the access and disclosure provisions of 26 USC §6103, §7213A, §7213, and §7431 are applicable (see 18 USC §1905).

9.3.1.21.3 (09-25-2006) Disclosure of Social Security Administration Records
1. Regulations under the Social Security Act authorize the Social Security Administration to disclose information to any officer or employee of the Department of the Treasury lawfully charged with the administration of Titles II, VIII, or IX of the Social Security Administration, the Federal Insurance Contributions Act, the Self-Employment Act, the Federal Unemployment Tax Act, or any Federal income tax law for the purpose of such administration only. The regulations expressly forbid further disclosure of information thus obtained, or its use for any purpose other than administration of the employment and income tax laws. 2. If an attorney for the government requires returns or return information in the possession of the Social Security Administration, he/she should submit a written request to the Chief, Communications & Liaison requesting authorization for Social Security Administration to release the information (see IRM 11.3.22, Disclosure to Federal Officers and Employees for Tax Administration Purposes).

Exhibit 9.3.1-1 (04-26-1999) Memorandum of Understanding: Access to Grand Jury Matters for Internal Audit Purposes
RESERVED

Exhibit 9.3.1-2 (04-26-1999) Statement Regarding Use and Disclosure of Federal Tax Information By State or Local Government Employee Appointed to Assist A Federal Grand Jury Investigation

Internal Revenue Manual - 9.3.1 Disclosure (Cont. 1)

STATEMENT REGARDING USE AND DISCLOSURE OF FEDERAL TAX INFORMATION BY STATE OR LOCAL GOVERNMENT EMPLOYEE APPOINTED TO ASSIST A FEDERAL GRAND JURY INVESTIGATION I understand that I have been formally appointed pursuant to (US CODE SECTION UNDER WHICH APPOINTED) to assist in a Federal grand jury investigation and that because of this appointment I am considered a Federal employee for Federal tax information disclosure purposes. I understand that during the course of this appointment I may receive Federal tax information under 26 USC §6103(h) or (i). I understand that such information is provided solely for use in the Federal grand jury investigation in which I am assisting and related Federal judicial or administrative proceedings, and for no other purpose. I specifically understand that such information may not be used or disclosed for state or local law enforcement. I understand that the willful, unauthorized disclosure of Federal tax information is a crime (felony) under 26 USC §7213(a) punishable by a fine of not more than $5,000, or imprisonment of not more than 5 years, or both, together with the costs of prosecution. Such disclosure may also give rise to civil liability under 26 USC §7431. (Signature) Name: Title: Address: Department:

More Internal Revenue Manual Accessibility | Freedom of Information Act | Important Links | IRS Privacy Policy | USA.gov | U.S. Treasury

Internal Revenue Manual - 9.3.2 PUBLICITY AND INTERNAL COMMUNICATIONS

Chapter 3. Disclosure and Publicity Section 2. PUBLICITY AND INTERNAL COMMUNICATIONS

9.3.2 PUBLICITY AND INTERNAL COMMUNICATIONS
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9.3.2.1 OVERVIEW 9.3.2.2 PURPOSE OF PUBLICITY 9.3.2.3 PUBLICITY, TAXPAYER INFORMATION, AND TAXPAYER RIGHTS 9.3.2.4 ROLES IN RELATION TO PUBLICITY 9.3.2.5 JURISDICTIONAL AREAS 9.3.2.6 INFORMATION AVAILABLE FOR MEDIA USE 9.3.2.7 INFORMATION NOT AVAILABLE FOR MEDIA USE 9.3.2.8 INVESTIGATIVE PUBLICITY 9.3.2.9 NON-INVESTIGATIVE PUBLICITY 9.3.2.10 MEDIA INQUIRIES 9.3.2.11 MEDIA PROCEDURES Exhibit 9.3.2-1 28 CFR, Chapter 1, Part 50.2 Release of Information by Personnel of the Department of Justice Relating to Criminal and Civil Proceedings Exhibit 9.3.2-2 Title 1- 7, United States Attorneys’ Manual, Media Relations, Dated September 1997

9.3.2.1 (07-02-2004) OVERVIEW
1. Research demonstrates the IRS Criminal Investigation’s (CI) law enforcement efforts have a measurable effect on voluntary compliance; specifically that CI investigations involving tax, taxrelated, and money laundering violations have a measurable influence on compliance. This section will discuss why, how, and when CI seeks publicity involving their investigative efforts. The subsections in this section are:
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Purpose of Publicity Publicity, Taxpayer Information, and Taxpayer Rights

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Internal Revenue Manual - 9.3.2 PUBLICITY AND INTERNAL COMMUNICATIONS

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Roles in Relation To Publicity Information Available for Media Use Information Not Available for Media Use Investigative Publicity Non-Investigative Publicity Media Inquiries Media Procedures

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9.3.2.2 (07-02-2004) PURPOSE OF PUBLICITY
1. Criminal Investigation serves the American public by investigating potential criminal violations of the Internal Revenue Code and related financial crimes in a manner that fosters confidence in the tax system and compliance with the law. One of the most effective methods to encourage compliance is through publicity of the activities that CI undertakes to enforce the laws within CI's jurisdiction.

9.3.2.3 (07-02-2004) PUBLICITY, TAXPAYER INFORMATION, AND TAXPAYER RIGHTS
1. Criminal Investigation will at all times adhere to the statutes, regulations, and policies regarding the disclosure of tax returns and return information (26 USC §6103) and privacy (5 USC §552a) when seeking publicity.

9.3.2.4 (08-13-2003) ROLES IN RELATION TO PUBLICITY
1. The following subsections describe the responsibilities of CI employees in relation to publicity matters.

9.3.2.4.1 (07-02-2004) Role of the Special Agent in Charge

Internal Revenue Manual - 9.3.2 PUBLICITY AND INTERNAL COMMUNICATIONS

1. For all local enforcement news releases, the Special Agent in Charge (SAC) is the approving official. This approval authority may be delegated no lower then the Assistant Special Agent in Charge (ASAC). 2. Designated IRS officials may participate in press conferences relating to enforcement actions at the invitation of the attorney for the government. Generally, the SAC will participate. The Director, Field Operations, however, may be the appropriate official in investigations of regional or national significance, or multi-functional compliance issues. Any IRS participation will be coordinated with the CI Public Information Officer (PIO) as early as possible.

9.3.2.4.2 (07-02-2004) Role of the Supervisory Special Agent and Special Agent
1. In general, the special agent or Supervisory Special Agent (SSA) whose investigation is the subject of a court action is responsible for notifying the PIO, in advance, of all scheduled legal actions. 2. Coordination among the special agent or SSA, the attorney for the government, and the PIO should begin at the earliest possible date. This allows all parties to agree to a plan of action to maximize deterrent publicity. 3. The special agent or SSA will notify the PIO of pending enforcement actions. 4. The special agent or SSA will notify the PIO of non-investigative publicity activities. These include the following activities: A. public speaking engagements B. compliance projects C. written articles D. public service or outreach projects E. award presentations

9.3.2.4.3 (07-02-2004) Role of the Public Information Officer
1. A designated special agent will serve as a PIO in each field office. He/she will develop local

Internal Revenue Manual - 9.3.2 PUBLICITY AND INTERNAL COMMUNICATIONS

strategy with the Communication and Liaison Media Relations Specialist (MRS). The duties of the PIO include: A. serving as a spokesperson for local CI issues; the SAC is the primary CI spokesperson B. briefing the SAC and MRS on upcoming media opportunities C. serving as a key member of the SAC's staff (attend staff meetings) D. researching, writing, editing, and distributing news releases to the media in the geographic area covered by the field office E. preparing the SAC for interviews F. preparing talking points or briefing papers for the SAC G. arranging and attending media interviews with the SAC H. responding to media inquiries concerning criminal tax matters and related financial crimes I. coordinating and attending enforcement related press conferences J. attending pre-operational meetings for activities such as executing search, seizure, or arrest warrants, and ensure the MRS awareness of roles, plans, and activities as necessary K. building working relationships with journalists and specialized media to establish resources to effectively publicize criminal tax matters and related financial crimes L. building effective working relationships with Federal, state, and local law enforcement public information officers M. serving as a subject matter expert on publicity issues for the special agents and management N. serving as the expert on criminal matters and related financial crimes for the local MRS O. promptly forwarding local media coverage of CI educational and enforcement activities to CI Communications and Education for immediate use and for compilation for future reference P. testing and implementing the CI National Communications Strategy in selected markets in

Internal Revenue Manual - 9.3.2 PUBLICITY AND INTERNAL COMMUNICATIONS

the geographic area covered by the field office Q. identifying and sharing best practices with the local MRS and CI Communications and Education R. reviewing, and if appropriate, inputting monthly Criminal Investigation Management Information System (CIMIS) data to verify accuracy of publicity codes S. acting as the coordinator of the local CI speaker bureau, CI Digest, and CI Bulletin T. coordinating and tracking local outreach activities 2. The PIO will use the PIOneer, PIO database, to: A. post upcoming legal actions on field investigations B. post outreach events C. file documents associated with investigations such as news releases, media coverage, and public record documents, as appropriate.

9.3.2.4.4 (07-02-2004) Role of the Criminal Investigation Communications and Education
1. CI Communications and Education is located in Headquarters (HQ) and has primary responsibility for accomplishing the following activities: A. developing and managing a market-driven educational strategy to foster voluntary compliance B. promoting the CI message nationwide C. coordinating CI publicity activities through the PIO D. developing a public relations and public outreach program through a speaker's bureau to deliver the IRS compliance strategy E. developing talking points, speeches, and news articles on CI activities for dissemination to both internal and external audiences

Internal Revenue Manual - 9.3.2 PUBLICITY AND INTERNAL COMMUNICATIONS

F. assisting with the development of Congressional testimony G. serving as a conduit between IRS Communication and Liaison for external media contacts and CI executives for interviews and articles on CI matters H. communicating publicity on CI investigations to executives, CI employees, and other internal and external stakeholders I. producing documents and publications regarding CI investigations, program areas, strategies, and related matters, (i.e., the weekly CI Bulletin; the weekly Treasury Report; the monthly news clippings report; the quarterly CI Digest; and ad hoc products such as the CI Media Kit (Pub. 1918), and the Irey/Wilson Video: An Orientation to CI) J. managing disclosure issues relating to publicity and Freedom of Information Act Requests (FOIA) relating to CI K. maintaining biographical information on the CI leadership cadre L. managing media training for all CI executives, liaisons, and PIOs including Continuing Professional Education (CPE) for PIOs M. managing national outreach and compiling nationwide statistical data on CI outreach efforts

9.3.2.5 (07-02-2004) JURISDICTIONAL AREAS
1. As a general rule, field offices will service inquiries from the local media, as well as inquiries from national media on matters under jurisdiction of that field office. 2. The IRS Communications & Liaison will service all other national media inquiries. 3. Field offices receiving national media requests for interviews will contact CI Communications and Education before taking any action on the request. 4. Director, CI Communications and Education will inform IRS Communications & Liaison of substantive media inquiries on local issues that are received directly by CI. The IRS office of Communications & Liaison and local offices will inform the Director, CI Communication and Education of substantive media inquiries on national issues or matters they receive directly.

9.3.2.6 (06-05-2006)

Internal Revenue Manual - 9.3.2 PUBLICITY AND INTERNAL COMMUNICATIONS

INFORMATION AVAILABLE FOR MEDIA USE
1. These instructions regarding the release by IRS personnel of information relating to criminal and civil proceedings are based on the Attorney General's Statement of Policy concerning the release of information by personnel of the Department of Justice (DOJ) relating to criminal and civil proceedings, and published in DOJ 28 CFR 50.1. 2. The type of information that can be released is as follows: A. general information concerning CI and the type of work done by the organization B. information that is a matter of public record (such as pleadings filed with the US Tax Court, a sworn affidavit or an indictment, which has been made public) may be supplied upon request 3. All news releases concerning criminal actions will be submitted to the appropriate attorney for the government for approval before distribution to the news media. News releases may be attributable to either the attorney for the government, or to both the IRS and the attorney for the government. Jointly attributable news releases may be issued on approved IRS letterhead after clearance through the Disclosure Officer and the attorney for the government, and may be distributed by IRS officials. News releases, which are attributable only to the attorney for the government, may be distributed by IRS officials. 4. Any disclosure of return information under this provision is made pursuant to the "public record exception" recognized by most circuit courts. 5. Because of the statutory prohibition on the disclosure of tax returns and return information, it is imperative that material contained in news releases be limited to information that is taken directly from the public record. Media requests for information that go beyond public record information, or general IRS program issues, will be referred to the attorney for the government. 6. With respect to those special situations referred to in 28 CFR 50.2(b)(9) of the Attorney General's Statement of Policy, (see Exhibit 9.3.2-1) the SAC is designated for approving release of information beyond the Attorney General's guidelines, after clearance with the attorney for the government. This exception is to permit the release of information that would not be prejudicial under the particular circumstances. 7. All information intended for release to the public is subject to the provisions of IRM 11.3, Disclosure of Official Information, with respect to the disclosure of official information from IRS files or records.

Internal Revenue Manual - 9.3.2 PUBLICITY AND INTERNAL COMMUNICATIONS

Note:
Just because an item is considered information suitable for release in the Attorney General's Policy statement does not mean that it can be disclosed pursuant to 26 USC §6103. See IRM 11.3, Disclosure of Official Information, and IRM 9.3.1, Disclosure. Public Record Information is defined in the Ninth Circuit as follows: "If a taxpayer's return information is lawfully disclosed in a judicial proceeding, the information is no longer confidential and may be disclosed again. Once tax return information is made part of the public domain, the taxpayer may no longer claim a right of privacy in that information."

9.3.2.7 (07-02-2004) INFORMATION NOT AVAILABLE FOR MEDIA USE
1. In many instances, information cannot be disclosed because of prohibitions contained in 26 USC §6103 and other statutes such as the Privacy Act. The special agent, PIO, SSA, ASAC, and SAC should be familiar with 26 USC §6103 and the penalties for unauthorized disclosure in 26 USC §7213 and 26 USC §7431. 2. IRS personnel will not make public statements, news releases, or other public disclosures concerning the defendant, the evidence, or any other aspect of a criminal investigation from the time a person is the subject of a criminal investigation until any proceeding resulting from such an investigation has been entered into public record. Under no circumstances will IRS officials release to the public the following type of information: A. observations about a defendant's character B. information concerning a defendant's prior criminal record C. statements, admissions, confessions, or alibis attributable to the defendant or the refusal or failure of the accused to make a statement D. references to investigative procedures, such as fingerprints, polygraph examinations, ballistic tests, or laboratory tests, or to the refusal by the defendant to submit to such tests or examinations E. statements concerning the identity, credibility, or testimony of prospective witnesses F. statements concerning the evidence or argument developed during the course of an investigation, whether or not it is anticipated that such evidence or argument will be used at trial

Internal Revenue Manual - 9.3.2 PUBLICITY AND INTERNAL COMMUNICATIONS

G. any opinion as to the accused's guilt or the possibility of a plea of guilty to the offense charged, or the possibility of a plea to a lesser offense H. any statement or information expected to influence the outcome of a pending or future trial I. any information that would be highly prejudicial and where release would serve no law enforcement function 3. IRS personnel will take no action to encourage or assist news media in photographing or televising a defendant or accused person being transported or held in Federal custody, nor should photographs of a defendant be made available to news media. These restrictions are not intended to prohibit the release of information concerning a defendant who is a fugitive from justice. 4. Generally, extensive pretrial publicity does not, itself, render a trial unfair and violate a defendant's right to due process. See Dobbert v. Florida, 432 US 282 (1977); Irvin v. Dowd, 366 US 717 (1961). 5. When civil actions result from a criminal investigation, CI personnel should not make or participate in making an extra-judicial statement. 6. The mere fact that disclosure of certain information may be embarrassing to the IRS is not a sufficient basis for withholding it.

9.3.2.8 (06-05-2006) INVESTIGATIVE PUBLICITY
1. While CI conducts criminal tax investigations, DOJ is responsible for prosecutions and should take the lead in publicizing such actions. Because of tax administration benefits that stem from deterrent publicity, however, IRS will assist with the preparation and distribution of news releases to be issued in the name of the attorney for the government. 2. If the attorney for the government chooses not to issue a news release, the SAC may issue a release after obtaining the concurrence of the attorney for the government. 3. While there are many pre-trial, trial, and post-trial activities of CI that are of interest to the media, any disclosure of return information under this provision is made pursuant to the "public record exception" .

Note:
Media representatives are prohibited from accompanying CI personnel carrying out an

Internal Revenue Manual - 9.3.2 PUBLICITY AND INTERNAL COMMUNICATIONS

investigative, enforcement, or similar assignment.

9.3.2.8.1 (07-02-2004) Pre-Trial Actions
1. News releases related to pretrial actions, such as indictments and the filing of criminal information, may be prepared upon approval of the attorney for the government. Releases will be cleared as stated in IRM 9.3.2.10, Media Inquiries. After appropriate clearances, the release may be issued on approved IRS letterhead. 2. Media requests for information about a pretrial action that goes beyond the contents of a release will be referred to the attorney for the government. In this regard, if the release is issued on IRS letterhead, it will carry the statement: "For further information, please contact the attorney for the government." 3. Pre-trial activities that may warrant publicity, but require pre-approval from the attorney for the government include the following: A. execution of search, seizure, and arrest warrants B. motions, hearings, and injunctions C. indictments and informations D. pleas and arraignments

9.3.2.8.1.1 (06-05-2006) Search, Seizure and Arrest Warrants
1. At the conclusion of the execution of a search, seizure, or arrest warrant, IRS may release to the news media information contained in the warrant and affidavit, provided such information has been filed with the clerk of the US District Court. At that time, the warrant and affidavit have become matters of public record in the judicial proceeding relating to the warrant, unless there are specific limitations imposed by law or court order. The release of such information may be made, after obtaining approval from the attorney for the government. 2. Any disclosure of return information under this provision is made pursuant to the "public record exception". 3. The information that is released will include only incontrovertible factual matters and should not

Internal Revenue Manual - 9.3.2 PUBLICITY AND INTERNAL COMMUNICATIONS

include subjective observations. Where such information would be highly prejudicial and where release would serve no law enforcement purpose, it will not be made public. Needs information concerning a defendant's prior criminal record will not be made public by IRS officials. 4. Media requests for information about a warrant that go beyond the contents of a public warrant or public affidavit will be referred to the attorney for the government.

9.3.2.8.1.2 (07-02-2004) Motions and Hearings
1. The IRS may provide advance media notice. 2. A news release may be issued with the approval of the attorney for the government.

9.3.2.8.1.3 (07-02-2004) Indictments and Information
1. News releases related to pre-trial actions such as indictments and filing of criminal informations will be released only upon the approval of the attorney for the government on a case-by-case basis. These news releases must be prepared by the field office in accordance with local procedures and submitted to the attorney for the government for approval before distribution to the news media. At the request of the attorney for the government, the field office will assist with the distribution of a release to the news media. News releases that are jointly attributable to the IRS and the attorney for the government may be printed on approved IRS letterhead.

9.3.2.8.1.4 (06-05-2006) Pleas and Arraignments
1. If a plea agreement does not contain a " no publicity" clause, the IRS may provide advance media notice, and the field office may issue a news release with the approval of the attorney for the government. 2. If the attorney for the government does not wish to initiate a news release upon the entry of a plea of either guilty or nolo contendere, rendition of a trial decision, or upon ultimate sentencing, then the SAC is authorized to issue an appropriate news release. 3. Any disclosure of return information under this provision is made pursuant to the "public record exception" .

9.3.2.8.2 (06-05-2006)

Internal Revenue Manual - 9.3.2 PUBLICITY AND INTERNAL COMMUNICATIONS

Trials
1. Because a trial is a public forum, anything introduced at trial is considered public information and is no longer confidential. Therefore, information derived from the public record is not afforded confidential protection under 26 USC §6103. Typically, the attorney for the government's office will issue news releases or hold press conferences at the conclusion of a trial. 2. If the attorney for the government does not wish to initiate a news release upon the entry of a plea of either guilty or nolo contendere, rendition of a trial decision, or upon ultimate sentencing, the SAC is authorized to issue an appropriate news release. 3. Release by IRS of information provided at legal proceedings can be made if recorded by an IRS employee other than the investigating special agent. Verbatim notes should be taken by the IRS employee and should be filed with the background documents, and with the news release. No editorial comments should be placed in the release, even those made by the judge. The release must contain the facts of the conviction, plea, or sentence. Information from the already publicly filed indictment can be used to describe the charges. 4. Any disclosure of return information under this provision is made pursuant to the "public record exception" .

9.3.2.8.3 (07-02-2004) Post Prosecution Actions
1. News releases may be issued within guidelines for post-prosecution actions. The media may also be notified if public information is available (e.g., indictments, criminal complaints, etc.). 2. Post-prosecution activities that may warrant publicity include the following: A. sentencing B. appeals C. seizures, sales, and auctions D. asset sharing

9.3.2.8.3.1 (06-05-2006) Sentencing

Internal Revenue Manual - 9.3.2 PUBLICITY AND INTERNAL COMMUNICATIONS

1. A good opportunity to seek publicity to further CI's mission to promote voluntary compliance exists at the time of sentencing. 2. The IRS may notify the media in advance of the date, time, and place of sentencing. 3. A news release may be issued by the SAC and with the approval of the attorney for the government. 4. If the attorney for the government does not wish to initiate a news release upon the entry of a plea of either guilty or nolo contendere, rendition of a trial decision, or upon ultimate sentencing, then the SAC is authorized to issue an appropriate news release. 5. Any disclosure of return information under this provision is made pursuant to the "public record exception" .

9.3.2.8.3.2 (07-02-2004) Appeals
1. The IRS may provide advance media notice. 2. A field office may issue a news release with the approval of the attorney for the government.

9.3.2.8.3.3 (06-05-2006) Seizures, Sales and Auctions
1. For unique or exceptional (newsworthy) situations, the IRS may contact the media and provide information pursuant to the guidelines listed for search warrants (see Exhibit 9.3.2-2). 2. The specific notification procedures required for asset seizures and forfeitures are not publicity situations as referred to in this section. These procedures can be found in IRM Chapters 9.7, Asset Forfeiture and Seizure.

9.3.2.8.3.4 (07-02-2004) Asset Sharing
1. Photos, public record investigation summaries, news releases, and press conferences can be used to publicize asset-sharing events. Because the investigations have been adjudicated, asset-sharing investigations have substantial amounts of public information. 2. One occasion where the IRS can reap positive publicity occurs when a check is presented to an

Internal Revenue Manual - 9.3.2 PUBLICITY AND INTERNAL COMMUNICATIONS

assisting state or local law enforcement agency involved in a seizure investigation. The PIO can arrange for the Director, Field Operations and SAC to participate in the presentation.

9.3.2.9 (07-02-2004) NON-INVESTIGATIVE PUBLICITY
1. Criminal Investigation has many opportunities to promote its mission, beyond investigationrelated activities. Outreach to key audiences provides many of those opportunities. Outreach is defined as any proactive education, assistance, or marketing activity designed to provide or enhance top quality service to internal or external customers and/or to help taxpayers better understand and meet their tax responsibilities. Criminal Investigation’s customers have been defined as tax professionals, the taxpaying public, (including representatives), attorneys for the government, and the IRS operating divisions. 2. The PIO is to be notified of all non-investigation related outreach opportunities to promote CI’s mission. The PIO must coordinate non-investigative media interviews with the local MRS. The following is a list of some non-investigation related opportunities: A. public speaking engagements B. compliance projects C. written articles D. public service or outreach projects E. award presentations

9.3.2.9.1 (07-02-2004) Public Speaking Engagements
1. Frequently IRS or CI is asked to speak to civic organizations, professional associations, law enforcement organizations, schools, or banks. Criminal Investigation talking points and speeches are available for these events by contacting the PIO who will coordinate the appearances with CI Communications and Education.

9.3.2.9.2 (07-02-2004) Compliance Projects
1. Consideration should be given to coordinated news releases through IRS Communications and

Internal Revenue Manual - 9.3.2 PUBLICITY AND INTERNAL COMMUNICATIONS

Liaison at the onset of major compliance projects. Such projects frequently are worked in conjunction with the other operating divisions covering major industries or occupations involved in widespread noncompliance. These activities may result in a significant number of audits resulting in high dollar assessments, and ultimately many successful criminal prosecutions. A proactive approach would involve a general news release at the time the civil audits begin, followed by releases regarding the number of audits and assessments made, and still later with the traditional criminal action news releases. A comprehensive approach could result in greater overall compliance.

9.3.2.9.3 (07-02-2004) Professional Articles
1. Frequently, newspapers, periodicals, and newsletters ask for contributing articles on CI or agent profiles. Responses to these requests provide positive publicity and should be coordinated through the CI Communications and Education.

9.3.2.9.4 (07-02-2004) Outreach and Public Service
1. Participation in outreach programs and public service programs also provide a platform for positive news coverage.

9.3.2.9.5 (07-02-2004) Award Presentations
1. Awards, both internal and external, received by CI personnel, as well as awards presented by CI personnel to persons in the community who have aided the mission of the IRS, provide a positive image of the IRS.

9.3.2.9.6 (06-05-2006) Information Regarding Non-Investigation Publicity
1. The PIO is to be furnished with the following information regarding non-investigation publicity and outreach: A. Date the request was received B. Date and time of the event

Internal Revenue Manual - 9.3.2 PUBLICITY AND INTERNAL COMMUNICATIONS

C. Requesting information D. Location E. Topic F. Type of activity G. Point of Contact – name, phone number, fax number, email address H. Length of presentation I. Type and size of the audience J. Audience feedback

9.3.2.10 (07-02-2004) MEDIA INQUIRIES
1. Media inquiries and contacts must be coordinated through the PIO. 2. Media is the basic means of mass communications with the public, therefore effective procedures are necessary to ensure the handling of inquiries promptly and in a spirit of genuine helpfulness. Such cooperation is dictated by the valuable contribution made by the media in disseminating the requirements of tax law compliance and the policies and programs of the IRS. 3. Timeliness is essential in news dissemination and should be given major emphasis in meeting the requirements of the media. It is particularly important in adversary situations. If it is appropriate to comment, the IRS's side of the story should be made available as quickly as possible, preferably in time for the edition in which the first reporting of the story appears. 4. Extreme care should be used in responding to inquiries of a general nature when it can reasonably be deduced that the answers are going to be applied to a specific situation. 5. When media inquiries are made, a statement of "no comment" should be avoided. If the media inquiry is made at a stage in the investigation when little or no public information is available, the PIO should explain the law that prohibits IRS from either confirming or denying the existence of an investigation. Unauthorized disclosure of tax returns or return information imposes severe criminal and civil penalties on the party responding to such questions (see IRM 9.3.1, Disclosure). 6. Media requests for information that go beyond the contents of a news release or public

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information should be referred to the attorney for the government's office.

9.3.2.11 (08-13-2003) MEDIA PROCEDURES
1. The IRS and CI in particular, have specific procedures that must be followed to release, track, and record newsworthy information. The subsequent subsections address these procedures. 2. For additional information on public record issues see IRM 11.3.11, Other Information Available to the Public.

9.3.2.11.1 (08-13-2003) Releasing News
1. Before news is released or an interview takes place, prepare the information to be released and obtain the appropriate approvals.

9.3.2.11.1.1 (07-02-2004) The Printed News Release
1. A printed news release consists of information prepared by the attorney for the government or CI for publication by the news media. It should meet the following criteria: A. be well structured B. furnish all available public record facts C. provide date of issue D. provide a contact point for further information

9.3.2.11.1.1.1 (07-02-2004) Notification Process for the News Release
1. Coordination among the special agent or SSA, the attorney for the government, and the PIO, should begin at the earliest possible date. This allows all parties to agree to a plan of action to maximize deterrent publicity. 2. As soon as the special agent is notified by the attorney for the government of the date of any

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anticipated legal actions, he/she should notify the PIO. 3. The PIO will place the anticipated action on the Legal Action Calendar in PIOneer. 4. The SSA is responsible for ensuring that anticipated legal actions are communicated to the PIO using the process adopted by the field office (e.g., email notification, Outlook calendar, etc.) any additions or deletions of anticipated legal actions are brought to the attention of the PIO for correction.

9.3.2.11.1.1.2 (06-05-2006) The CI News Release
1. Since only public record information can be included in a news release issued by the IRS, it is imperative that as much information on the defendant and the offense be included in legal action documents (indictment, plea, etc.) 2. Use of state and local public record sources are permissible in news releases as long as source and attribution is given to that record.

Note:
The public record must be accessible to the general public. If the record is only accessible to law enforcement personnel, you may not use it as a public record. 3. The special agent and SSA should ensure that the attorney for the government includes the following information in each legal action document: A. defendant's name B. age C. residence D. employment E. marital status F. substance or text of charge G. scope of the investigation

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H. scheme utilized in committing the offense 4. The PIO is responsible for the preparation of all CI generated news releases. Accordingly, the special agent and SSA should work closely with the PIO to: A. Provide copies of warrants, affidavits, indictments, and other publicly filed investigationrelated documents to assist in drafting news releases. B. Get factual basis for the legal action (e.g., plea) read into court record or have an IRS employee (not the investigation special agent) take verbatim notes of the court findings. C. If appropriate, the special agent or SSA can prepare a draft press release for use by the attorney for the government or the PIO will ensure that the contents of the release conform to the disclosure and privacy statutes and guidelines. 5. A CI news release may be issued after all the following steps have been completed: A. field office clearance procedures as established by the SAC in coordination with CI Communications and Education B. approval by the attorney for the government 6. All IRS generated news releases relating to CI investigations will be approved by the SAC prior to issuance. This authority may be delegated no lower then the ASAC. Copies of all news releases will be provided to the investigating special agent and forwarded electronically to CI Communications and Education. News releases must be cleared within the field office in accordance with procedures established by the SAC in coordination with CI Communications and Education. 7. All news releases concerning criminal actions will be submitted to the attorney for the government for approval before distribution to the news media. News releases related to pre-trial actions will be released only upon the approval of the attorney for the government on a case-bycase basis. News releases may be attributable either to the attorney for the government, or to both the IRS and the attorney for the government. Jointly attributable news releases may be issued on approved IRS letterhead after the PIO ensures that the content in the release came from the public record documents and is approved by the attorney for the government. The release may be distributed by IRS officials. News releases, which are attributable only to the attorney for the government may be distributed by the IRS.

Note:

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The fact that the attorney for the government may generally draft and issue news releases in a particular judicial district in no way diminishes the responsibility of CI for proceeding with the process detailed above. The PIO should still be involved in the drafting of the release to ensure IRS issues are covered. The PIO can also assist in providing legal action documents to the media as appropriate. Additionally, the PIO will have targeted media markets, which may not be on the general distribution list of the attorney for the government. In larger field offices, releases issued by attorneys for the government are often left in a pressroom to be picked up by courthouse reporters. Media markets that target a specific industry, occupation, or geographical coverage may be overlooked. The PIO should notify these markets of the legal action. 8. At the request of the attorney for the government, the field office will assist with the distribution of releases to the news media whether they are released jointly or only attributable to the attorney for the government. News releases that are jointly attributable to the IRS and the attorney for the government may be printed on approved IRS letterhead. 9. Absent strategic or legal limitations, most legal actions on a CI investigation could be the subject of a news release. If the attorney for the government is not issuing a news release, then the responsibility rests on CI to consider the need for a news release (depending on the stage of the investigation, e.g., warrant execution, trial phase, or plea negotiations) and ensure that an appropriate release is drafted, reviewed, and distributed to the appropriate media outlets. 10. Any disclosure of return information under this provision is made pursuant to the "public record exception" . A. Extreme care should be used when determining whether tax information has actually become a matter of public record. To be considered a matter of public record, the source of the information must be a document or other record that has in fact been filed with the court by, or on behalf, of the IRS in a judicial proceeding or is a matter of public record available to the general public. For information coming from a proceeding, the proceeding must be held in open court and the source of the information must be the public record of the judicial proceeding. An IRS copy of a document filed in a tax administrative judicial proceeding that does not bear a stamp evidencing its filing with the court should not be relied upon by itself as a public record. B. Besides verifying that the information came from public record source, or was made public by, or on behalf of, the IRS in a court proceeding, the SAC must also attribute the disclosure he/she intends to make to the public record when making disclosure. For example, the news release would specifically state that the information is attributable to the court copy of the pleading court order, opinion, transcript of the proceeding, or a news release from the attorney for the government. The words used must exactly match those used in the source. For information taken from a public record source other than the court proceeding, source and attribution must also be given. (For example, if location

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information is obtained from the property appraiser’s files, the news release must state that the information is attributable to the property appraiser’s records. Wording such as, "According to the XXXXXX County Appraiser’s records, Mr. TP is located in the XXX area " would be appropriate to use). By following these source and attribution rules, potential disclosure problems can be avoided or minimized. C. The fact that tax information has been made public by someone other than the IRS does not affect the confidentiality of the same information contained in our files. The IRS cannot confirm or deny information made public by any other party unless specifically authorized by 26 USC §6103. Be careful of media questions that seek further (nonpublic) information that could result in unauthorized disclosures.

9.3.2.11.1.2 (08-13-2003) Personal Public Appearance
1. Approval must be obtained from the SAC before personally appearing in public on behalf of CI or IRS.

9.3.2.11.1.2.1 (07-02-2004) Press Conference
1. Designated IRS officials may participate in press conferences at the invitation of the attorney for the government.

9.3.2.11.2 (06-05-2006) Tracking Publicity and Post Publicity Procedures
1. Tracking investigation publicity is the responsibility of all CI employees, but primarily rests with the investigating special agent and SSA. The special agent should clip all news articles and forward them to the PIO through local field office procedures. A copy of the news article should also be faxed or e-mailed to CI Communications and Education by the PIO. News stories covered by radio or TV should be documented in writing and also forwarded through the same route. 2. Publicity may occur at various stages of an investigation, i.e., execution of warrant, indictment, trial, plea, conviction, sentencing, and/or appeal. Publicity at those junctures should be entered into CIMIS on the affected investigations. However, it is not necessary to document every media pick up. The CI publicity rate is calculated by all sentenced investigations that received publicity some time during the period the investigation was open. It is important to document in CIMIS the various types of publicity obtained.

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Exhibit 9.3.2-1 (07-02-2004) 28 CFR, Chapter 1, Part 50.2 Release of Information by Personnel of the Department of Justice Relating to Criminal and Civil Proceedings
(a) General The availability to news media of information in criminal and civil cases is a matter which has become increasingly a subject of concern in the administration of justice. The (1) purpose of this statement is to formulate specific guidelines for the release of such information by personnel of the Department of Justice. While the release of information for the purpose of influencing a trial is, of course, always improper, there are valid reasons for making available to the public information about the administration of the law. The task of striking a fair balance between the protection of individuals accused of (2) crime or involved in civil proceedings with the government and public understanding of the problems of controlling crime and administering government, depends largely on the exercise of sound judgment by those responsible for administering the law and by representatives of the press and other media. Inasmuch as the Department of Justice has generally fulfilled its responsibilities with awareness and understanding of the competing needs in this area, this statement, to a considerable extent, reflects and formalizes (3) the standards to which representatives of the Department have adhered in the past. Nonetheless, it will be helpful in ensuring uniformity of practice to set forth the following guidelines for all personnel of the Department of Justice. Because of the difficulty and importance of the questions they raise, it is felt that some portions of the matters covered by this statement, such as the authorization to make available Federal conviction records and a description of (4) items seized at the time of arrest, should be the subject of continuing review and consideration by the Department on the basis of experience and suggestions from those within and outside the Department. (b) Guidelines to criminal actions

Internal Revenue Manual - 9.3.2 PUBLICITY AND INTERNAL COMMUNICATIONS

These guidelines shall apply to the release of information to news media from the time a person is the subject of a (1) criminal investigation until any proceeding resulting from such an investigation has been terminated by trial or otherwise. At no time shall personnel of the Department of Justice furnish any statement or information for the purpose of influencing the outcome of a defendant’s trial, nor shall personnel of the Department furnish any statement or (2) information which could reasonably be expected to be disseminated by means of public communications, if such a statement or information may reasonably be expected to influence the outcome of a pending future trial. Personnel of the Department of Justice, subject to specific (3) limitations imposed by law or court rule or order, may make public the following information: (i) (ii) (iii) The defendant’s name, age, residence, employment, marital status, and similar background information. The substance or text of the charge, such as a complaint, indictment, or information. The identity of the investigating and/or arresting agency and the length or scope of an investigation.

The circumstances immediately surrounding an arrest, including the time and place of arrest, resistance, (iv) pursuit, possession and use of weapons, and a description of physical items seized at the time of arrest. Disclosure should include only incontrovertible, factual matters, and should not include subjective observations. In addition, where background information or information relating to the circumstances of an arrest or investigation would be highly prejudicial or where the release thereof would serve no law enforcement function, such information should not be made public. (4) Personnel of the Department shall not disseminate any information concerning a defendant’s prior criminal records.

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Because of the particular danger or prejudice resulting from statements in the period approaching and during trial, they ought strenuously to be avoided during that period. Any (5) such statement or release shall be made only on the infrequent occasion when circumstances absolutely demand a disclosure of information and shall include only information which is clearly not prejudicial. The release of certain types of information generally tends to create dangers of prejudice without serving a significant law (6) enforcement function. Therefore, personnel of the Department should refrain from making available the following: (i) Observations about a defendant’s character. Statements, admissions, confessions, or alibis (ii) attributable to a defendant, or the refusal or failure of the accused to make a statement. Reference to investigative procedures such as fingerprints, polygraph examinations, ballistics tests, or (iii) laboratory tests, or to the refusal by the defendant to submit to such tests or examinations. (iv) Statements concerning the identity, testimony, or credibility of prospective witnesses.

Statements concerning evidence or argument in the (v) case, whether or not it is anticipated that such evidence or argument will be used at trial. Any opinion as to the accuser’s guilt, or the possibility (vi) of a plea of guilty to the offense charged, or the possibility of a plea to a lesser offense. Personnel of the Department of Justice should take no action to encourage or assist news media in photographing or televising a defendant or accused person being held or (7) transported in Federal custody. Departmental representatives should not make available photographs of a defendant unless a law enforcement function is served thereby. This statement of policy is not intended to restrict the release (8) of information concerning a defendant who is a fugitive from justice.

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Since the purpose of this statement is to set forth generally applicable guidelines, there will, of course, be situations in which it will limit the release of information which would not be prejudicial under the particular circumstances. If a representative of the Department believes that in the interest (9) of the fair administration of justice and the law enforcement process information beyond these guidelines should be released, in a particular case, he shall request the permission of the Attorney General or the Deputy Attorney General to do so. (c) Guidelines to civil actions Personnel of the Department of Justice associated with a civil action shall not during its investigation or litigation make or participate in making an extra judicial statement, other than a quotation from or reference to public records, which a reasonable person would expect to be disseminated by means of public communication, if there is a reasonable likelihood that such dissemination will interfere with a fair trial and which relates to: (1) Evidence regarding the occurrence or transaction involved. (2) (3) (4) (5) The character, credibility, or criminal records of a party, witness, or prospective witness. The performance or results of any examinations or tests or the refusal or failure of a party to submit to such. An opinion as to the merits of the claims or defenses of a party, except as required by law or administrative rule. Any other matter reasonably likely to interfere with a fair trial of the action.

[Order No. 469–71, 36 FR 21028, Nov. 3, 1971, as amended by Order No. 602–75, 40 FG 22119, May 20, 1975]

Exhibit 9.3.2-2 (07-02-2004) Title 1- 7, United States Attorneys’ Manual, Media Relations, Dated September 1997

1-7.001 PURPOSE

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The purpose of this policy statement is to establish specific guidelines consistent with the provisions of 28 CFR 50.2 governing the release of information relating to criminal and civil cases and matters by all components (FBI, DEA, BOP, USMS, USAO, and DOJ divisions) and personnel of the Department of Justice. These guidelines are: 1) fully consistent with the underlying standards set forth in this statement and with 28 CFR 50.2; 2) in addition to any other general requirements relating to this issue; 3) intended for internal guidance only; and 4) do not create any rights enforceable in law or otherwise in any party. 1-7.110 Interests Must Be Balanced These guidelines recognize three principle interests that must be balanced: the right of the public to know; an individual’s right to a fair trial; and the government’s ability to effectively enforce the administration of justice. 1-7.111 Need for Confidentiality Careful weight must be given in each case to protecting the rights of victims and litigants as well as the protection of the life and safety of other parties and witnesses. To this end, the Courts and Congress have recognized the need for limited confidentiality in: a On-going operations and investigations; b Grand jury and tax matters; c Certain investigative techniques; and d Other matters protected by the law. 1-7.112 Need for Free Press and Public Trial Likewise, careful weight must be given in each case to the constitutional requirements of a free press and public trials as well as the right of the people in a constitutional democracy to have access to information about the conduct of law enforcement officers, prosecutors, and courts, consistent with the individual rights of the accused. Further, recognition should be given to the needs of public safety, the apprehension of fugitives, and the rights of the public to be informed on matters that can affect enactment or enforcement of public laws or the development or change of public policy.

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These principles must be evaluated in each case and must involve a fair degree of discretion and the exercise of sound judgment, as every possibility cannot be predicted and covered by written policy statement. 1-7.210 General Responsibility Final responsibility for all matters involving the news media and the Department of Justice is vested in the Director of the Office of Public Affairs (OPA). The Attorney General is to be kept fully informed of appropriate matters at all times. Responsibility for all matters involving the local media is vested in the United States Attorney. 1-7.220 Designation of Media Representative Each U.S. Attorney’s office and each field office of the various components of the Department shall designate one or more persons to act as a point of contact on matters pertaining to the media. In the U.S. Attorneys’ offices or field offices where available personnel resources do not permit the assignment of a full-time point of contact for the media, these responsibilities should be assigned to a clearly identified individual. (This, of course, should be the U.S. Attorney or field office head). 1-7.310 Department of Justice Components The public affairs officers at the headquarters level of the Federal Bureau of Investigation, Drug Enforcement Administration, Immigration and Naturalization Service, Bureau of Prisons, United States Marshals Service, Office of Justice Programs, and Community Relations Service are responsible for coordinating their news media effort with the Director of OPA. 1-7.320 US Attorneys Recognizing that each of the 93 US Attorneys will exercise independent discretion as to matters affecting their own districts, the US Attorneys are responsible for coordinating their news media efforts with the Director of OPA in cases that transcend their immediate district or are of national importance. Procedures to Coordinate with OPA

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In order to promote coordination with the OPA, all components of the Department shall take all reasonable steps to insure compliance with the following: A International/National/Major Regional News As far in advance as possible, OPA should be informed about any issue that might attract international, national, or major regional media interest. However, the OPA should be alerted not to comment or disseminate any information to the media concerning such issues without first consulting with the US Attorney. B News Conferences Prior coordination with OPA is required of news conferences of national significance. Prior coordination with OPA is required of news conferences of national significance. C Requests from National Media Representatives (TV, Radio Wire Service, Magazines, Newspapers) OPA should be informed immediately of all requests from national media organizations, including the television and radio programs (such as the nightly news, Good Morning America, Meet the Press and Sixty Minutes), national wire services, national news magazines and papers (such as the New York Times, USA Today, and the Wall Street Journal) regarding in-depth stories and matters affecting the Department of Justice, or matters of national significance. Media Coverage Affecting DOJ When available, press D clippings and radio/television tapes involving matters of significance should be forward to OPC. Comments on Specific Issues (i.e., New Policies, Legislative Proposals, Budget) OPA should be consulted for guidance prior to commenting on new policies and E initiatives, legislative proposals or budgetary issues of the Department. This should not be interpreted to preclude recitation of existing well-established Departmental policies or approved budgets. 1-7.400 Coordination with US Attorneys--Issuance of Press Releases

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By OPA or Headquarters . In instances where OPA or the headquarters of any division, component, or agency of the Department issues a news release or conducts a news conference which may affect an office or the US Attorney, such division, component, or agency will coordinate that effort with the appropriate US Attorney. Issuance of Press Release by Field Officers of any Division In instances where local field officers of any division or component plans to issue a news release, schedule a news conference or make contact with a member of the media relating to any case or matter which may be prosecuted by the US Attorney’s office, such release, scheduling of a news conference, or other media contact shall be approved by the US Attorney. See the DOJ Organizations and Functions Manual at 28 for a discussion of press releases in cases involving the IRS. 1-7.401 Guidance for Press Conferences and Other Media Contacts The following guidance should be followed when Department of Justice components or investigative agencies consider conducting a press conference or other media contact: The use of a press release which conforms to the approval requirements of USAM 1-7.400 is the usual method to release public information to the media by Department of Justice components and investigative agencies. Press A conferences should be held only for the most significant and newsworthy actions, or if a particularly important deterrent or law enforcement purpose would be served. Prudence and caution should be exercised in the conduct of any press conference or other media contact. Press conferences about pending cases or investigations that may result in an indictment by all Department of Justice components and investigative agencies must be approved by the appropriate Assistant attorney General or by the United B. States Attorney responsible for the case. In joint or multidistrict cases the approving official should consult with other districts affected. If it is a national case, press conferences must be approved by the Director, Office of Public Affairs, see USAM 1-7.320 to 1-7.330.

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There are exceptional circumstances when it may be appropriate to have press conferences or other media outreach about ongoing matters before indictment or other formal charge. These include cases where; 1) the heinous or extraordinary nature of the crime requires public reassurance C that the matter is being promptly and properly handled by the appropriate authority; 2) the community needs to be told of an imminent threat to public safety; or 3) a request for public assistance or information is vital. See USAM 1-7.530 to 1-7.550 and 28 C.F.R. 50.2. There are also circumstances involving substantial public interest when it may be appropriate to have media contact about matters after indictment or other formal charge but before conviction. In such cases, any communications with D press or media representatives should be limited to the information contained in an indictment or other charging instrument, other public pleadings or proceedings, and any other related non-criminal information, within the limits of USAM 1-7.520, 540, 550,500 and 28 C.F.R. 50.2. Any public communication by any Department component or investigative agency or their employees about pending matters or investigations that may result in a case, or about pending cases or final dispositions, must be approved by the appropriate Assistant Attorney General, the United States E Attorney, or other designate responsible for the case. In joint or multi-district cases, the approving official should consult with other districts or divisions affected. If it is a national case, press conferences must be approved by the Director, Office of Public Affairs. The use of displays or handouts in either press conferences or other media outreach when it involves a pending case or F an investigation that may lead to an indictment requires separate and specific approval by the officials authorizing approval as set forth in section B. All Department personnel must avoid any public oral or written statements or presentations that may violate any G Department guideline or regulation, or any legal requirement or prohibitions, including case law and local court rules.

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Particular care must be taken to avoid any statement or presentation that would prejudice the fairness of any subsequent legal proceeding. See also 28 C.F.R. 16.26(b). In cases where information is based directly or indirectly on tax records, care should be taken to comply with any applicable disclosure provisions in the Tax Reform Act, section 6103 of the Internal Revenue Code of 1986. The fact of conviction, H sentences and guilty pleas may be reported in a press release based on information uttered in court as opposed to waiting for the publicly filed documents relating to the fact of conviction, plea or sentence. If you have any questions please contact the Tax Division. Special rules apply and should be closely followed to ensure that the identity of minors directly or indirectly is not revealed in juvenile proceedings. For press releases or other public comment concerning the filing of a request for commutation of a federal death sentence or whether such a sentence should be commuted, special rules apply. In clemency matters, the Department acts both as prosecutor and as advisor to the President on the issue of clemency. In order to ensure clarity about the role in which the Department is making a public comment and to I ensure that there is no potential for infringement upon the President's prerogative in exercising his clemency powers or conflict in the Department's role in such matters, press releases or other comment to the press concerning the issue of clemency should be transmitted through the Office of Public Affairs to the Deputy Attorney General for final approval. Prior to conducting a press conference or making comments on a pending investigation regarding another DOJ J component, the US Attorney shall coordinate any comments, including any written statements, with the affected component. The Office of Inspector General is exempt from any approval requirement for media contacts. However, the K Office of Inspector General should inform the Office of Public Affairs on public or other media issues. 1-7.500 Release of Information in Criminal and Civil Matters-Non-Disclosure

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At no time shall any component or personnel of the Department of Justice furnish any statement of information that he or she knows or reasonably should know will have a substantial likelihood of materially prejudicing an adjudicative proceeding. 1-7.520 Release of Information in Criminal and Civil Matters-- Disclosable Information Department personnel, subject to specific limitations imposed by law or court rule or order and consistent with the provisions of these guidelines, may make public the following information in any criminal case in which charges have been brought: a The defendant’s name, age, residence, employment, marital status, and similar background information;

The substance of the charge, limited to that contained in the b complaint, indictment, information, or other public documents; c The identity of the investigating and/or arresting agency and the length and scope of an investigation;

The circumstances immediately surrounding an arrest, including the time and place of arrest, resistance, pursuit, d possession and use of weapons, and a description of physical items seized at the time of arrest. Any such disclosures shall not include subjective observations; and In the interest of furthering law enforcement goals, the e public policy significance of a case may be discussed by the appropriate US Attorney or Assistant Attorney General. In civil cases, Department personnel may release similar identification material regarding defendants, the concerned government agency or program, a short statement of the claim, and the government’s interest. 1-7.530 Disclosure of Information Concerning Ongoing Investigations Except as provided in subparagraph (b) of this paragraph, components and personnel of the Department shall not respond to questions about the existence of an ongoing A investigation or comments on its nature or progress, including such things as the issuance or serving of a subpoena, prior to the public filing of the document.

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In matters that have already received substantial publicity, or about which the community needs to be reassured that the appropriate law enforcement agency is investigating the incident, or where release of information is necessary to protect the public interest, safety, or welfare, comments B about or confirmation of an ongoing investigation may need to be made. In these unusual circumstances, the involved investigative agency will consult and obtain approval from the US Attorney or Department Division handling the matter prior to disseminating any information to the media. 1-7.531 Comments on Requests for Investigations Individuals, groups, or organizations often send letters to the Department of Justice or a Department component requesting that a person or entity be investigated for violations of law. Sometimes, the requestor then conducts a press conference or release a statement leaving an implication that an investigation will result. This can cause media inquiries. Receipt of a request to open an investigation may be publicly acknowledged. Care should be taken to avoid any implication that the referral will necessarily lead to an investigation. It should be pointed out that there is a distinction between "reviewing a request for an investigation" and "opening an investigation." Any acknowledgement should state that such requests are referred to the proper investigative agency for review but that no decision has been made whether to proceed on the specific request received. Finally, it should be noted that all substantiated allegations are reviewed in light of the Principles of Federal Prosecution (see USAM 9-27.000), and the Department does not ordinarily confirm or deny the existence or status of an investigation. The same considerations apply if there is an investigation already underway when such a request is received. If the existence of an investigation is not public the same procedure should be followed as outlined above. 1-7.540 Disclosure of Information Concerning Person’s Prior Criminal Record

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Personnel of the Department shall not disseminate to the media any information concerning a defendant’s or subject’s prior criminal record either during an investigation or at a trial. However, in certain extraordinary situations such as fugitives or in extradition cases, departmental personnel may confirm the identity of defendants or subject and the offense or offenses. Where a prior conviction is an element of the current charge, such as in the case of a felon in possession of a firearm, departmental personnel may confirm the identity of the defendant and the general nature of the prior charge where such information is part of the public record in the case at issue. 1-7.550 Concerns of Prejudice Because the release of certain types of information could tend to prejudice an adjudicative proceeding, Department personnel should refrain from making available the following: A Observations about a defendant’s character; Statements, admissions, confessions, or alibis attributable to B a defendant, or the refusal or failure of the accused to make a statement; Reference to investigative procedures, such as fingerprints, polygraph examinations, ballistic tests, or forensic services, C including DNA testing, or to the refusal by the defendant to submit to such tests or examinations; D Statements concerning the identity, testimony, or credibility of prospective witnesses;

Statements concerning evidence or argument in the case, E whether or not it is anticipated that such evidence or argument will be used at trial; Any opinion as to the defendant’s guilt, or the possibility of F a plea of guilty to the offense charged, or the possibility of a plea of a lesser offense. 1-7.600 ASSISTING THE NEWS MEDIA Other than by reason of a Court order, Department personnel shall not prevent the lawful efforts of the news media to A photograph, tape, record or televise a sealed crime scene from outside the sealed perimeter.

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In order to promote the aims of law enforcement, including the deterrence of criminal conduct and the enhancement of public confidence, Department personnel with the prior approval of the appropriate United States Attorney may assist the news media in photographing, taping, recording or B televising a law enforcement activity. The United States Attorney shall consider whether such assistance would: 1. Unreasonably endanger any individual; 2. Prejudice the rights of any party or other person; and 3. Is not otherwise proscribed by law. A news release should contain a statement explaining that C the charge is merely an accusation and that the defendant is presumed innocent until and unless proven guilty. In cases in which a search warrant or arrest warrant is to be executed, no advance information will be provided to the news media about actions to be taken by law enforcement personnel, nor shall media representatives be solicited or invited to be D present. This prohibition will also apply to operations in preparation for the execution of warrants, and to any multiagency action in which Department personnel participate. Justice Department employees who obtain what may be evidence in any criminal or civil case or who make or obtain any photographic, sound or similar image thereof, in connection with a search or arrest warrant, may not disclose E such material to the new media without the prior specific approval of the United States Attorney or Assistant Attorney General, who shall consider applicable regulations and policy, or upon a court order directing such production. If news media representatives are present, Justice Department personnel may request them to withdraw voluntarily if their presence puts the operation or the safety of individuals in jeopardy. If the news media declines to withdraw, Department personnel should consider canceling the action if that is a practical alternative. Exceptions to the above policy may be granted in extraordinary circumstances by the Office of Public Affairs. 1-7.700 FREEDOM OF INFORMATION ACT (FOIA) Nothing contained herein is intended to control access to Department of Justice records which are publicly available under provisions of the Freedom of Information Act (FOIA).

Internal Revenue Manual - 9.3.2 PUBLICITY AND INTERNAL COMMUNICATIONS

(28 USC §509) [Order No. 469–71, 367 F.21028, No. 3, 1971, Amended by Order No. 602–75, 40 FR 22119, May 20, 1975) More Internal Revenue Manual Accessibility | Freedom of Information Act | Important Links | IRS Privacy Policy | USA.gov | U.S. Treasury

Internal Revenue Manual - 9.4.1 Investigation Initiation

Chapter 4. Investigative Techniques Section 1. Investigation Initiation

9.4.1 Investigation Initiation
q q q q q q q

9.4.1.1 9.4.1.2 9.4.1.3 9.4.1.4 9.4.1.5 9.4.1.6 9.4.1.7

Overview Authorization to Gather Information Activities Not Requiring Authorized Investigations General Investigations Primary Investigations Subject Criminal Investigations Subject Seizure Investigation

9.4.1.1 (07-28-2003) Overview
1. This section describes the authorized techniques for each of Criminal Investigation’s (CI) types of information collecting activities.

9.4.1.2 (12-21-2005) Authorization to Gather Information
1. Treasury Order 150–10 delegates the authority to administer and enforce the Internal Revenue laws to the Commissioner of the IRS. Since compliance with the Internal Revenue laws cannot be determined by relying solely upon the information contained on returns and documents filed with the IRS, the IRS will obtain information from other sources. However, only the information necessary for the enforcement and administration of the tax laws which the IRS is authorized and directed to enforce will be sought. (Policy Statement P–1–1.) 2. In order to protect the public from unnecessary intrusion into their private and financial affairs, the IRS has authorized the use of a wide variety of investigative activities and techniques. The circumstances of each investigation will determine which investigative activities or techniques shall be employed.

Internal Revenue Manual - 9.4.1 Investigation Initiation

9.4.1.3 (04-04-2005) Activities Not Requiring Authorized Investigations
1. The following actions may be undertaken to identify an individual or entity without initiating an investigation: A. clip news articles B. access IRS databases C. maintain liaison with other law enforcement agencies D. view tax information via command code RTVUE and BRTVU through Integrated Data Retrieval System (IDRS) E. interview informants F. identify individuals through vehicle license checks G. visually inspect a home, office, real estate, or personal property to identify an individual H. record the results of any activity in items a through g

Note:
Special agents working alone or with a multi-agency task force to evaluate financial information for potential money laundering, currency or other non-tax crimes may scrutinize tax return information only after an ex parte order is obtained or a related statute determination is made by the Special Agent in Charge (SAC). 2. As soon as an individual or entity is identified as one who requires further evaluation for potential criminal activity, a primary investigation (PI) must be initiated.

9.4.1.4 (12-21-2005) General Investigations
1. A general investigation (GI) is a study, survey, canvassing, or coordination activity related to a group, an activity, or a CI program/sub-program to identify possible noncompliance with the laws enforced by the IRS. General investigations are also used to track special agent time in regard to specific specialized activities and investigative imprest funds.

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2. A GI normally involves areas of non-compliance for a specific occupation, industry or CI program/sub-program. When the focus shifts from the group to the potential criminal activity of an identified individual or entity, a PI will be opened. As additional information is developed which indicates prosecution potential exists, a subject criminal investigation (SCI) will be opened. 3. If a PI is generated from information developed in a GI, the PI must be linked to the GI under which it was developed by entering the GI number in Section 1, Item D on Form 4930, Criminal Investigation General/Primary/Subject Investigation Report. The GI number does not need to be entered on a SCI because it will automatically be linked through the PI. 4. If a PI is developed independently of the GI, it should not be linked to the GI, even though it may pertain to the same instance(s) of non-compliance being addressed by the GI. 5. A PI should never be linked to an imprest fund GI or other Specialized GI.

9.4.1.4.1 (07-28-2003) Ownership of a General Investigation
1. General Investigation ownership will always be in the office initiating the investigation. Ownership can never be transferred or changed.

9.4.1.4.2 (12-21-2005) Initiating a General Investigation
1. A special agent will initiate a GI based on one of the following: A. Investigation of alleged non-compliance within a specific category of individuals. The purpose of investigative GIs is to determine if the allegation warrants investigation of specific individuals and to develop investigative leads to determine which individuals should be investigated. B. Coordination is often required in a specific program, sub-program, or enforcement activity. Examples might include Questionable Refund Program/Return Preparer Program (QRP/RPP), Joint Terrorism Task Forces (JTTF), High Intensity Drug Trafficking Area (HIDTA), High Intensity Financial Crimes Area (HIFCA), etc. C. Investigative imprest funds. Examples include undercover agent maintenance activities, cover agent maintenance activities, and special use vehicles such as surveillance vans. 2. The special agent will prepare Form 4930, to initiate a GI. He/she should describe the purpose and

Internal Revenue Manual - 9.4.1 Investigation Initiation

scope of the GI in Section IV, Item 12, Allegations of Non-Compliance. See IRM 9.9, Criminal Investigation Management Investigation System, for additional information needed to complete Form 4930.

9.4.1.4.2.1 (12-21-2005) Purpose of the General Investigation
1. The purpose of establishing the GI should be stated clearly and should include allegations and indications of non-compliance, e.g., informant communications, previous SCIs, referrals from other divisions, etc.

9.4.1.4.2.2 (12-21-2005) Effective Management of General Investigations
1. Field offices need to ensure PIs resulting from GIs are appropriately linked in the Criminal Investigation Management Information System (CIMIS). 2. Effective management of GIs is vital to field office efficiency. Non productive GIs drain valuable resources. Field offices should periodically review and evaluate the results and effectiveness of GIs during the investigation review process and close non-productive GIs to free resources for more productive activities. 3. In evaluating the effectiveness of GIs the following factors should be considered: A. Are the activities commensurate and appropriate with the amount of time being charged? B. Were the investigative development activities successful? C. Were the objectives of the GI articulated in the opening memorandum achieved? D. Are the special agent(s) familiar with the GI’s activity? E. Is the GI properly coded? (Are appropriate investigations correctly coded with Fraud Scheme Code 900-Legal Income General Investigation). F. Are PIs resulting from the GI initiated in a timely manner after the subject has been identified? G. Are PIs developed through the GI linked with the GI on CIMIS?

Internal Revenue Manual - 9.4.1 Investigation Initiation

H. Does the GI duplicate the activities or objectives of other GIs? I. Is there still a need for the GI or should it be closed? 4. Form 6083, SSA's Investigation Progress Report is the primary mechanism for documenting activities conducted under a GI. This form should be utilized to track the progress of and timely evaluation all GIs.

9.4.1.4.2.3 (12-21-2005) Scope of the General Investigation
1. The scope of the GI should include the following: A. type of contacts anticipated outside the IRS as authorized for a GI B. type of information to be gathered C. availability of the information/records to be gathered

9.4.1.4.3 (04-04-2005) Approving a General Investigation
1. The SAC will approve GIs that relate exclusively to his/her field office and involve investigative or coordination activities. 2. The Director, Field Operations must approve specialized GIs for imprest funds. 3. The Director, Operations Policy and Support (CI:OPS) will approve any GI that is national in scope.

9.4.1.4.4 (07-28-2003) Expansion of an Approved General Investigation
1. If the original purpose or scope of an approved GI is expanded, the expansion must be in writing and signed by the approving official.

9.4.1.4.5 (04-04-2005) Authorized General Investigation Techniques

Internal Revenue Manual - 9.4.1 Investigation Initiation

1. In making investigative inquiries, authorized under a GI, a special agent is allowed to disclose the name of an individual associated with a particular group for identification purposes, to the extent necessary to secure information that is relevant and necessary to the investigation. Investigative inquiries are limited.

9.4.1.4.5.1 (12-21-2005) Techniques Relating to General Investigations
1. Additional techniques permitted for investigative GIs include: A. Searches within existing IRS records and databases. B. Inquiries of Federal, state, and local governmental agencies, including state and local tax authorities. C. Contact with the original informant and other informants who are believed to possess pertinent information. D. Contact with foreign (tax treaty and other nations) government bodies similar to (b) above. These contacts must be coordinated through Headquarters (HQ) with the Director, International (CI:OPS:I). E. Surveillance F. Consensual Monitoring G. Undercover H. Contacts with sources outside the government as long as there is no disclosure of a specific individual or entity and the inquiry is relevant to the investigation. I. Form letters, pattern letters, or letters to third parties (formerly circular letters), to persons outside the IRS for information on individuals or entities as long as no individual or entity name is disclosed. (The letters, if requesting identical information about a group of unnamed individuals, may require administrative clearance by the Office of Management and Budget under the Paperwork Reduction Act of 1980.)

9.4.1.4.5.2 (04-04-2005) Additional Techniques Permitted in Liaison and Sub-Program General Investigations

Internal Revenue Manual - 9.4.1 Investigation Initiation

1. In addition to the techniques listed above for investigative GIs, certain other techniques are allowed in specific liaison and sub-program GIs. Those techniques are discussed below.

9.4.1.4.5.2.1 (12-21-2005) Additional Techniques Relating to Pure Money Laundering General Investigations
1. Pure money laundering GIs will most likely relate to HIFCA task forces and Suspicious Activity Report (SAR) Review Teams, but may also relate to other Financial Investigative Task forces. IRM 9.4.13, Financial Investigative Task Force has more information regarding SAR-Review Teams. 2. Special agents may contact the participants and institutions identified in a currency report to identify the source, disposition, and nature of the currency transaction. 3. If a subpoena is used, the subpoena is limited to documents and records relating to the scope of the transactions that generated the Currency Transaction Record (CTR) or SAR. A subpoena should not be used as a means to examine financial transactions beyond the scope of the reported suspicious activity. To subpoena information or records outside the scope of the transaction (i.e., entire account records), the special agent must elevate the investigation to SCI status.

Note:
Special agents working alone or with a multi-agency task force to evaluate financial information for potential money laundering, structuring or other non-tax crimes may scrutinize tax return information only after an ex parte order is obtained or a related statute determination is made by the SAC.

9.4.1.4.5.2.2 (12-21-2005) Additional Techniques Relating to Questionable Refund Program and Return Preparer Program General Investigations
1. Each field office maintains a GI related to questionable refund and return preparer schemes (QRP/RPP). The QRP coordinator will be the primary person who charges time to the GI; however, other special agents may also conduct activities relating to the GI. 2. The Fraud Detection Center (FDC) reviews returns to detect fraudulent refund schemes. A. Special agents may respond to a request for assistance from a FDC. In the interests of

Internal Revenue Manual - 9.4.1 Investigation Initiation

providing expeditious aid to the FDCs in identifying fraudulent refund schemes, special agents may: 1) Verify suspicious refund addresses through the use of drive-bys or visual inspection of a potential subject’s home, office, place of employment, post office box, etc. 2) Determine the validity of the earnings and withholdings reported on the potentially fraudulent returns by contacting the employer. 3) Contact the US Postal Service to intercept fraudulent refund checks. 3. The FDC will initiate refund scheme PIs when the scheme warrants additional investigation. The FDC will prepare the Form 4930 and input it into CIMIS. A copy of the Form 4930 will be retained in the scheme file in the FDC. CIMIS will place the PI in an appropriate field office QRP or RPP case pool. These schemes must be evaluated within 90 days. 4. In addition to the activities noted in paragraph 2, the field office will charge time to the QRP/RPP GIs for the following: A. Participation in any activity that fosters voluntary compliance in the QRP/RPP area and encourages return preparers, transmitters or others to contact CI to report a potentially fraudulent scheme. For example, a special agent may attend meetings with preparers/EROs to educate them on how to identify suspicious returns. B. Meetings with other operating divisions to discuss and coordinate the QRP/RPP programs. C. Special agents may interview informants and accept information relating to fraudulent schemes: 1) This includes interviewing reputable return preparers or electronic return originators (EROs) who call about an individual(s) trying to file or transmit a questionable return. 2) If, after speaking with the preparer/ERO, the special agent has no firm indication the individual is participating in a scheme, the special agent may seek additional information necessary to determine whether a refund scheme actually exists.

Internal Revenue Manual - 9.4.1 Investigation Initiation

3) If, after speaking with the preparer or with the individual who attempted to file the false return, the special agent believes there may be a scheme, the special agent should immediately seek approval to number a PI and follow the guidelines set out below for contacts under a PI. 5. As noted above, under a GI, special agents may make limited third party inquiries about potential QRP/RPP schemes; however, the inquires may only be made to determine criminal potential and to identify persons responsible for the scheme. As soon as these determinations are made, third party contacts must cease until a SCI is initiated.

9.4.1.4.5.2.3 (12-21-2005) Techniques Relating to Organized Crime and Drug Enforcement Task Force General Investigations
1. The Department of Justice (DOJ) reimburses CI for the time spent and for certain expenditures incurred as a result of participation in the Organized Crime and Drug Enforcement Task Force (OCDETF). As a result, special agents should carefully monitor and record all time spent conducting general OCDETF activities. All GI time needs to be included on the Criminal Investigation Monthly Activity Report (Form 5043A). Examples of activities chargeable to the GI include: A. Assisting with open OCDETF investigations and/or prosecutions when CI does not have an open investigation. B. Evaluation and information gathering related to an open non-CI OCDETF investigation being considered as a PI or an SCI. C. Evaluation and information gathering prior to the numbering of a PI or SCI OCDETF investigation by the Core City Task Force Coordinators. This time is limited, however, to only 1 month for narcotics trafficking organizations and 3 months for money laundering organizations. All remaining time used for development of these investigations should be charged to the High Level Drug Leader (HLDL) GI. D. Task Force Coordinator’s time spent on general OCDETF duties.

9.4.1.4.5.2.4 (04-04-2005) Techniques and Activities Relating to High Level Drug Leader General Investigations

Internal Revenue Manual - 9.4.1 Investigation Initiation

1. The HLDL program allows IRS to review DEA files related to Class I and II violators. The SAC determines which files will be evaluated for criminal potential by CI and which files will be forwarded to the other operating divisions for examination. A special agent may charge the time spent evaluating the files to the HLDL GI.

9.4.1.4.5.2.5 (04-04-2005) Techniques and Activities Relating to High Intensity Drug Trafficking Area General Investigations
1. The SAC may appoint a coordinator to act as a liaison to the local HIDTA or may assign special agents and/or a Supervisory Special Agent (SSA) to work in a HIDTA initiative. The following activities may be charged to the HIDTA GI: A. liaison activities which ensure appropriate levels of cooperation between CI and the other agencies in the local HIDTA B. assisting with open HIDTA investigations and/or prosecutions when CI does not have an open investigation C. evaluation and information gathering related to an open non-CI HIDTA investigation being considered as a PI or an SCI D. coordinators time spent on general HIDTA duties

9.4.1.4.5.2.6 (04-04-2005) Techniques and Activities Relating to Strike Force General Investigations
1. Field offices where the US Attorney’s Office is active in the Strike Force/Racketeer program will initiate GIs to track time spent in this area. The program looks for individuals who derive substantial income from illegal activities, and special agents will use the same techniques authorized for an investigative GI.

9.4.1.4.5.2.7 (12-21-2005) Lead Development Center
1. In support of the overall IRS Mission and the Mission of the CI, Lead Development Centers (LDCs) will prioritize their work to:

Internal Revenue Manual - 9.4.1 Investigation Initiation

A. Identify and develop leads that fall within the parameters of the Strategy and Program Plan, as well as the Annual Compliance Program. B. Provide analytical support to field offices on ongoing, high impact investigations (see subsection (5), below). C. Assist field offices in identifying and assembling information on individuals and entities involved in significant criminal non-compliance with the Internal Revenue Code and other related statutes (see IRM 9.4.11, Investigative Services). D. Coordinate local, national, and international projects/leads initiated to identify specific areas/industries of non-compliance. E. Facilitate coordinated research initiatives with the operating divisions. 2. Each of the five LDCs is responsible for GI investigation development of a national program area of fraud based on the priorities outlined in the Annual Compliance Program Guidance (ACG). The LDC assigned a particular national program is generally responsible for all GI investigation development requests on a nationwide basis. Depending on the size of such requests, multiple LDCs may assume joint responsibility.

Note:
The LDCs are also delegated the authority to number money laundering and Back Secrecy Act (BSA) investigations. A. Philadelphia/Baltimore LDC has primary responsibility for abusive tax scheme lead development. B. Garden City LDC is primarily dedicated to case development and field support for counterterrorism investigations. C. Denver/Portland LDC has primary responsibility for frivolous filer and non-filer lead developments, prime lead processing, and information item processing. D. Tampa LDC has primary responsibility for the BSA program (e.g., SARs, wire remitters, and Small Business/Self Employed (SBSE) anti-money laundering (AML) program coordination. E. Indianapolis LDC has responsibility for employment tax, bankruptcy fraud and offers in compromise (OIC) lead development.

Internal Revenue Manual - 9.4.1 Investigation Initiation

3. The organizational structure of the LDCs consists of: A. GS-1811-14, Supervisory Special Agent (SSA) B. GS-1801-12, Supervisory Investigative Analyst (SIA) C. GS-1801-11, Investigative Analysts (IA) D. GS-6, Compliance Support Assistant (CSA) 4. The Director, Lead Development Centers, is responsible for managing the LDCs and reports to the Director, Operations Policy & Support (CI:OPS). 5. Listed below are procedures for field offices requesting assistance from the LDC for analytical support of an investigation or case development initiative. The most efficient use of the LDC resources entails analytical support for initiatives with national or international implications concerning a non-compliance issue. Frequently these initiatives are of such magnitude that they are coordinated nationally through a Headquarters Section. Every effort is made to partner the field office and the LDC with a civil operating division to ensure a concerted Service wide effort to address the non-compliance. A. When a field office has an investigation or investigation development initiative of national or international scope requiring analytical support concerning a non-compliance issue, they may request assistance from a LDC. B. These requests should be forwarded to the Director, Lead Development Centers, for review and assignment. The Director, LDC will determine the viability of a request and will make the determination as to which LDC receives the assignment. C. When there are competing requests for assignment, the Director, LDC in concert with the appropriate Headquarters Section Director, will determine the priority for assignment. D. Each request for assistance must contain a detailed narrative, which sufficiently describes the allegations, potential violations, the scope of the requested LDC assistance, and the required information needed in the investigation or investigation development. E. The request must include a copy of the completed and processed Form 4930 reflecting the subject, primary, or general investigation number. Additional related associates must be documented via Form 4930A, Criminal Investigation Associate Identity Report. F. The request must clearly state whether this is an administrative or grand jury investigative

Internal Revenue Manual - 9.4.1 Investigation Initiation

effort, and specifically state grand jury restrictions, Mutual Legal Assistance Treaties (MLAT) restrictions, covert restrictions, or any other concerns or restrictions, in conducting the research, contact with Web sites, or sharing with the civil operating divisions. G. The request must state the cooperative agreement the field office has made to partner with a civil operating division to ensure a concerted service-wide effort to address the noncompliance. H. Each field office request assigned to a LDC for support will have a lead investigative analyst (IA) assigned. I. Before any action is taken by the LDC, the SSA of the field office and the LDC, along with the Supervisory Investigative Analyst (SIA), the lead investigating special agent, and the lead IA, will hold a documented meeting, either through a conference call or in person, to discuss the investigation or investigation development initiative to ensure there is a mutual understanding of the investigative effort, investigative direction, contact or sharing restrictions for information, the LDC assistance requested, and LDC capabilities. J. This meeting, or a follow-up meeting, will include appropriate individuals from the affected civil operating division to ensure agreement with the field office and the LDC to execute a service-wide initiative aimed at the non-compliance to include civil injunctions, examinations, and collection activity. K. The lead IA will develop a plan with the lead investigating special agent to ensure a cohesive and coordinated effort to the analytical support. Additionally, the special agent should forward or notify the lead IA of any research already conducted. L. The lead IA and the lead investigating special agent must continuously communicate to share and obtain any additional information which impacts the analytical support or the direction of the initiative. M. The special agent must provide sufficient communication to the lead IA to ensure that unnecessary work is not performed and that all pertinent leads are pursued. When additional leads or potential subjects are identified, the special agent will be notified of this information by the lead IA for further investigative planning. N. In these large scope ongoing field office investigative initiatives, information will be continuously shared between the lead IA and the lead special agent. This should be an ongoing process and not delayed until the entire initiative is complete.

9.4.1.5 (04-04-2005)

Internal Revenue Manual - 9.4.1 Investigation Initiation

Primary Investigations
1. A PI is an evaluation of an allegation that an individual or entity is in noncompliance with the laws enforced by IRS and may have prosecution potential. 2. A PI may also relate to a group of individuals involved in a coordinated scheme whereby the individuals are alleged to be in noncompliance with the laws enforced by the IRS. 3. A PI can be the parent of more than one SCI. It can also be closed without ever generating an SCI.

9.4.1.5.1 (03-03-1999) Sources of Primary Investigations
1. Primary investigations come from many sources. Some are described below.

9.4.1.5.1.1 (12-21-2005) Information Items
1. Information which comes to the attention of a CI employee in the field office is typically recorded on a Form 3949, Criminal Investigation Information Item. See other subsections in IRM 9.4, Investigative Techniques, IRM 9.5, The Investigative Process, and IRM 9.8, Criminal Investigation Fraud Detection Center, for more information concerning information items. 2. Information items which have a Form 211, Application for Reward for Original Information, associated with it should be upgraded to an SCI or closed within 60 days. See IRM 25.2.2, Informant Rewards. 3. Information items will be monitored by the Denver LDC. Denver LDC will be responsible for ensuring information items are forwarded to the appropriate field office or functions within other operating divisions. Information items received from the other operating divisions will be forwarded to the Denver LDC. Information items received by field offices will be forwarded to the Denver LDC. 4. If the field office retains an information item for further development that is not received from the Denver LDC, the field office will provide the Denver LDC with a copy of the Form 3949, Criminal Investigation Information Item for tracking purposes. If the item does not result in a criminal investigation, the information item will be forwarded to the Denver LDC. The Denver LDC will be responsible for forwarding the information item for consideration to the appropriate function within the other operating division.

Internal Revenue Manual - 9.4.1 Investigation Initiation

9.4.1.5.1.2 (04-04-2005) Fraud Detection Center Initiated Primaries
1. The Resident Agent in Charge (RAC) initiates a PI when the FDC identifies a scheme relating to QRP or RPP. The PI will be placed in the appropriate field office’s QRP/RPP case pool. The field office must decide within 90 days of receiving a QRP scheme or a RPP scheme whether to upgrade the PI to an SCI or return the scheme to the FDC. 2. If the FDC places controls on accounts related to the identified scheme, the individuals and/or entities are to be entered into the CIMIS system as associate identities on Form 4930A. Subsequent to placing the investigation into the field office’s QRP/RPP pool, the field office is responsible for inputting any associate identities into the CIMIS system. 3. Closed QRP information items or investigations are sent to the field office’s FDC. Closed RPP investigations (both primary and subject) will be forwarded simultaneously to the FDC and the Small Business and Self Employed (SB/SE) Return Preparer Coordinator.

9.4.1.5.1.3 (12-21-2005) Criminal Fraud Referrals
1. Criminal fraud referrals from other operating divisions will be sent to the field office through the fraud technical advisors. 2. The field office will number criminal fraud referrals as PIs upon receipt from the other operating divisions. 3. The field office will set up a conference, with the referring operating division employees, the fraud technical advisor, and others as needed to discuss the merits of the referral within 10 workdays of the receipt of the referral in the field office. 4. The field office must decide within thirty workdays of receiving the referral whether to upgrade the PI to an SCI or return the referral to the other operating division. The field office can request an extension of the evaluation time requirements. The reasons for delay in making a determination will be documented in the administrative file. The due date must be updated in CIMIS. 5. Any further extensions must be granted by written agreement of the appropriate field territory manager. The agreement should specify the reason for the request (such as a delay in receiving signed tax returns or an opinion from Counsel) and the date the referring office may expect a final determination. 6. Under certain circumstances, the referring operating division may request an appeal of a declined

Internal Revenue Manual - 9.4.1 Investigation Initiation

fraud referral as outlined in IRM 25.1.3.5 (2). Criminal Investigation must be able to justify and clearly articulate the reasons for a referral’s declination. 7. A unique number will be assigned to each referral and will be listed in the upper right hand corner on Form 2797, Referral Report of Potential Criminal Fraud Cases. The eight digit number is comprised of the originating fraud technical advisor group number (1 to 5), two digits representing the fiscal year; a sequential number (001 will represent the first referral submitted to CI at the start of each fiscal year); and a two digit number representing the civil operating division making the referral. 8. CIMIS source codes (Form 4930, item number 18) have been interpreted differently. Only items received through the Fraud Technical Advisor via Form 2797 should be coded as a fraud referral.Whoever is assigned responsibility for numbering the referral must carefully review the document to ensure the correct operating division has been selected. The fraud referral control number will aid in determining the proper source as the last two digits are operating division specific. 9. The following items are not referrals: A. Armed escorts information received informally from an IRS employee. B. Cases under audit at the time CI independently initiates an investigation based on information from another source. These audits will be placed in suspense, but do not qualify as referrals. 10. The National Fraud Program Office (NFPO) has already implemented this numbering process. Effective immediately, referrals received without a control number should be returned to the Fraud Technical Advisor Manager. See the SBSE Web page for names and locations of fraud referral specialist managers (http://sbse.web.irs.gov/FR/Fraud/personnel.htm). 11. To assist in properly tracking referrals, the fraud program manager has agreed that only one fraud referral, with one control number, will be forwarded to CI, even when there is a common set of facts involving two or more individuals or entities (such as a husband and wife or corporate officer and employees). Criminal Investigation will, in turn, number one primary investigation for each Form 2797 regardless of the number of entities discussed in the referral. (An exception will be certain national schemes involving LMSB taxpayers, where multiple referrals on the same business entity can occur.) 12. After the fraud referral has been evaluated, a copy of the Form 2797 must be returned to the Fraud Referral Specialist with the primary number noted in Box 14d. 13. In order to facilitate consistency, each field office will designate an employee to be responsible

Internal Revenue Manual - 9.4.1 Investigation Initiation

for receipt and tracking of fraud referrals. This employee will be responsible for: •maintaining a record of fraud referrals received by the field office, including current status • ensuring primary numbers are obtained timely and that the fraud referral control number is properly entered into CIMIS • assisting the SAC in tracking due dates and extensions • ensuring subject numbers are obtained timely for accepted referrals • maintaining the field office TIMS folders for documents relating to the Fraud Referral program including all Forms 2797, Referral Declination Memorandums and Requests for Extensions • tracking fraud awareness presentations

9.4.1.5.1.4 (07-28-2003) General Investigations
1. Primary investigations related to individuals or entities may emerge, at any time, during the GI evaluation process. A PI should always be numbered when it appears that an identified individual or entity may have prosecution potential.

9.4.1.5.1.5 (04-04-2005) Grand Jury Evaluation Requests
1. Requests from the US Attorney’s Office for IRS participation in grand jury investigations will be numbered as PIs.

9.4.1.5.1.6 (04-04-2005) Direct Referrals- Prime Leads
1. An information item or group of information items received in CI that lack criminal potential may be referred to the other operating divisions. When there is a firm indication of substantial civil tax potential, the field office will recommend a direct referral to the other operating divisions in the form of a prime lead. The completed and approved prime lead will be sent from the field office to the Denver LDC as a prime lead. Only items that have previously been numbered as a primary will be sent as a prime lead. Criminal Investigation will send all the information used to evaluate the referral after redacting any grand jury information, Suspicious Activity Reports (SARs), records of Criminal History, or other restricted material. The Denver LDC will do additional case building when necessary and forward the entire package to the appropriate operating division.

Note:
Primary investigations on return preparers should not be designated as prime leads and should be sent to the area return preparer coordinator through the FDC.

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9.4.1.5.2 (04-04-2005) Ownership of a Primary Investigation
1. Primary investigation ownership will always be the field office that initiated the investigation. Ownership can never be transferred.

9.4.1.5.3 (04-04-2005) Initiating a Primary Investigation
1. Form 4930 will be used to authorize all PI’s. IRM 9.9, Criminal Investigation Management Information System (CIMIS) should be consulted to complete the form. 2. If the subject of the PI resides in another field office’s territory, concurrence of the SAC for the territory in which the subject resides is necessary before the PI can be initiated.

9.4.1.5.4 (12-21-2005) Approving a Primary Investigation
1. The SAC has approval authority within his/her field office to initiate all PIs by signing Form 4930. The authority to approve the initiation of PIs within field offices, except for PIs involving violations of 18 USC §1956, §1957, §1960, §371M (associated with a Title 18 violation), §371T (associated with a Title 31 violation) and/or any Title 31 investigations may be delegated within the field office through local delegation orders to the ASAC or SSA level. 2. The RAC signs all Forms 4930 to initiate PIs on QRP/RRP schemes identified in the FDC. 3. The Supervisory Special Agent (SSA) of the LDC signs all Forms 4930 to initiate PIs in the LDC. The LDC SSA has the authority to approve PIs involving Title 26, 18 USC §1956, §1957, §1960, §371T and/or any Title 31 investigations. 4. Investigations of banks and brokers or dealers in securities referenced in 31 CFR 103.46(a)(1) through 103.46(a)(6) for possible criminal violations of 31 CFR Part 103 (except 31 CFR 103.23 and 103.48) must be authorized by the Chief, CI. See IRM 1.2.2, Delegation Order 143.

9.4.1.5.5 (12-21-2005) Associate Identities
1. An associate identity to a PI is an individual or entity that has a nexus to the scheme of alleged non-compliance identified in the PI, but whose role in the scheme has yet to be fully determined.

Internal Revenue Manual - 9.4.1 Investigation Initiation

If controls are placed on an individual and/or entity identified as an associate entity, the associate identity must be entered into CIMIS via Form 4930A. 2. All associated individuals and/or entities will be associated with the PI by completing a Form 4930A. 3. The associated entity screen will enable each field office to identify if an individual or entity is tied to an investigation anywhere in the country. It will also assist in Freedom of Information Act (FOIA) requests and immunity clearance requests from the attorney for the government. 4. The associated entity screen in CIMIS will also alert the special agent when closing a grand jury investigation to notify DOJ of the disposition of all related entities for which grand jury investigative authority was sought but were not numbered as a PI or SCI. 5. Witnesses are not to be entered as associate identities. Per Department of the Treasury Directive 55-01, a witness is defined as a person who has information or evidence concerning a crime and provides such information or evidence to a law enforcement agency. Where the witness is a minor, the term witness includes an appropriate family member or legal guardian. The term witness does not include defense witnesses or those individuals involved in the crime as perpetrators or accomplices. The term witness does not include confidential informants. 6. If an individual is entered in CIMIS as an associate identity, but is later determined to be a witness, the associate identity record for the individual will be removed from CIMIS.

9.4.1.5.6 (12-21-2005) Authorized Primary Investigative Techniques
1. The following additional techniques and activities are approved for PIs: A. Assist other agencies in the execution of a search warrant, including interviewing subject and related individuals during the execution of the warrant. (However, CI cannot interview third parties and/or the subjects after the execution of another agency's warrants without an SCI.) If CI is the affiant, a SCI must have been initiated. B. Consensual monitoring. C. Mail covers. D. Discussions with the referring IRS officer. E. Contact with foreign (tax treaty and other nations) government bodies, including local tax

Internal Revenue Manual - 9.4.1 Investigation Initiation

authorities. These must be coordinated through the Director, International in CI HQ Operations Policy & Support (CI:OPS). F. Contact with the taxpayers by mail to verify their filing record using Letter 1509 (DO). This form letter will not be used to solicit an admission if there is good cause to believe that a taxpayer has willfully failed to file. Use of this form should be approved by the SAC. G. Access to original tax return. 2. In addition to the above activities, the following activities are permitted in QRP/RPP PIs: A. Contact employers and other filers of information return documents to verify data shown on the information returns, e.g., Forms W-2, W-4, 1099, 8300, 4789, etc. B. Contact with employers of potentially fictitious persons is permitted but limited to determining the validity of the employee’s earnings and withholding. C. Limited third party inquiries are also allowed to determine the true identity of a filer of false or fraudulent claims being evaluated by the applicable campus questionable refund detection team. This includes verification of addresses used by individuals responsible for filing the fraudulent return. 3. Special agents may disclose the name of the subject of a PI for identification purposes in an effort to secure information that is relevant and necessary to the investigation. 4. In a Financial Investigative Task Force, or in a Title 31 or SAR investigation, CI personnel may serve subpoenas authorized by the US Attorney’s Office.

9.4.1.6 (12-21-2005) Subject Criminal Investigations
1. A SCI is an individual or entity alleged to be in non-compliance with the laws enforced by the IRS and having criminal prosecution potential. 2. The object of a SCI is to gather pertinent evidence to prove or disprove the existence of a violation of the laws enforced by the IRS. 3. A SCI will always be initiated after a PI. A PI and a SCI can be initiated simultaneously in those instances when the investigation has criminal prosecution potential.

Internal Revenue Manual - 9.4.1 Investigation Initiation

9.4.1.6.1 (04-04-2005) Ownership of a Subject Criminal Investigation
1. Ownership of a SCI may or may not be in the field office that initiated the SCI. Ownership can only be changed by transferring the SCI from the responsible field office to another field office. This may not be done until the transfer has been approved by the SACs of the two field offices involved. A SCI and the PI to which it is associated may or may not have the same owner. The Criminal Investigation Management Information System hotline must be contacted to perform the transfer of the investigation.

9.4.1.6.2 (12-21-2005) Initiating a Subject Criminal Investigation
1. Form 4930 will be used to authorize all SCIs. IRM 9.9, Criminal Investigation Management Information System should be consulted to complete the form. 2. If the subject of the investigation resides in another field office’s territory, concurrence of the SAC for the territory in which the subject resides is necessary before the SCI can be initiated. 3. If the investigation does not fall within the CI compliance strategy, a deviation memorandum must be prepared for the SAC’s approval and retained in the investigation's administrative file.

9.4.1.6.3 (04-04-2005) Approving a Subject Criminal Investigation
1. Non-sensitive Title 26 SCIs may be approved by the SAC. (The authority to approve the initiation of SCIs, except for 18 USC §1956, §1957, §1960, §371T and/or any Title 31 investigations, can be delegated through local delegation orders to the ASAC.) All sensitive Title 18, 26, and 31 SCIs must be approved by the Director, Field Operations. 2. A sensitive investigation is defined as one involving:
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currently serving elected Federal officials currently serving Article 3 Judges currently serving high-level Executive Branch Officials currently serving elected statewide officials

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Internal Revenue Manual - 9.4.1 Investigation Initiation
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currently serving members of the highest court of the states mayors currently serving populations of 250,000 or more perjury in the US Tax Court exempt organizations

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3. Investigations of banks and brokers or dealers in securities referenced in 31 CFR 103.46(a)(1) through 103.46(a)(6) for possible criminal violations of 31 CFR Part 103 (except 31 CFR 103.23 and 103.48) must be authorized by the Chief, CI. See IRM 1.2.2, Delegation Order 143.

9.4.1.6.4 (12-21-2005) Subject Criminal Investigative Techniques
1. A SCI is considered a full-scale criminal investigation and, therefore, can use the broad spectrum of investigative techniques available to the special agent. 2. A SCI is required for the execution of a search warrant when CI is the affiant. Special agents can still assist other agencies in the execution of a search warrant, including interviewing subjects and related individuals during the execution of the warrant. In order to do this however, CI must have either a GI or PI number. CI cannot interview third parties and/or subjects after the execution of another agency's warrant without a numbered SCI.

9.4.1.7 (12-21-2005) Subject Seizure Investigation
1. In order to capture time on criminal or civil seizure actions (18 USC §981, 18 USC §982, 18 USC §984, 26 USC §7301, 26 USC §7302 and 26 USC §881), a separate subject seizure investigation (SSI) will be initiated apart from existing SCIs. Only one SSI is numbered for a specific target. Do not number a SSI for each location or for each asset relating to the specific target.

9.4.1.7.1 (12-21-2005) Ownership of a Subject Seizure Investigation
1. Subject seizure investigation ownership may or may not reside with the field office that initiated the investigation. Subject seizure investigation ownership can only be changed by transferring the investigation from one or the initiating field office to another field office. This may not be done without the prior approval of the SACs of the two field offices involved. A SSI and the PI to which it is associated may or may not have the same owner. The CIMIS hotline must be contacted

Internal Revenue Manual - 9.4.1 Investigation Initiation

in order to perform the transfer of SSI investigations from one field office to another.

9.4.1.7.2 (04-04-2005) Initiating a Subject Seizure Investigation
1. Form 4930 will be used to authorize all SSIs. If no PI exists, a PI and a SSI must be initiated at the same time. IRM 9.9, Criminal Investigation Management Information System should be consulted to complete the form.

9.4.1.7.3 (04-04-2005) Approving a Subject Seizure Investigation
1. The authority to approve the initiation of all non-sensitive SSIs rests with the SAC. All sensitive Title 18, 26, and 31 SSIs must be approved by the Director, Field Operations. See IRM 9.4.1.6.3(2) which provides a definition of sensitive investigations. This approval authority can not be redelegated.

9.4.1.7.4 (03-03-1999) Subject Seizure Investigative Techniques and Procedures
1. A SSI must always be associated with a PI. A SSI can be closed only when one of the following actions occurs: A. All the assets seized have been disposed. B. No assets were seized and no further action will be taken. C. The SSI was initiated to charge time assisting another agency’s seizure investigation and no more time will be charged to the investigation. 2. Additional information relating to seizure investigations and forfeitures can be found in IRM 9.7, Asset Seizure and Forfeiture.

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Internal Revenue Manual - 9.4.2 SOURCES OF INFORMATION

Chapter 4. Investigative Techniques Section 2. SOURCES OF INFORMATION

9.4.2 SOURCES OF INFORMATION
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9.4.2.1 9.4.2.2 9.4.2.3 9.4.2.4 9.4.2.5

OVERVIEW Governmental Sources of Income Business, Financial, Professional, and Educational Records Investigative Computer Databases, Networks and Other Electronic Storage Media Informants

9.4.2.1 (03-15-2007) OVERVIEW
1. Compliance with the laws which the IRS is authorized and directed to enforce cannot always be determined solely by reference to the information on returns and documents filed with IRS. Therefore, the IRS must obtain information from outside sources for the effective administration of the tax laws, (see IRM 1.2.1, Policies of the Internal Revenue Service (Policy Statement P–1–1)). 2. The term "relevant investigative information" means documents, statements, facts, testimony, and other data which reasonably may be expected, either singularly or cumulatively, to indicate a potential violation of Federal law. Documents, statements, facts, testimony or other data which relate to the personal habits of a person may be gathered if it is " directly relevant investigative information."

Note:
Information relating to any expenditure of money, or for which an expenditure of money would normally be expected, is almost always directly related to any income tax investigation. If the information is not "directly relevant investigative information," but is commingled with other information in the same document, it may be retained. 3. Under no other circumstances will information on the personal habits of a person be gathered, developed, or retained.

Internal Revenue Manual - 9.4.2 SOURCES OF INFORMATION

4. Depending upon the nature of the investigation, nearly every governmental agency, business, financial entity, school, customer, client, supplier, utility company, neighbor, friend, relative, classmate, or associate of any kind is a potential source of information. 5. This section relates to the different sources available to gather information during the course of an investigation. Some of the sources of information are: A. governmental records B. business, financial, professional, and educational records C. investigative databases D. informants 6. In selecting which sources to be contacted, it is important to balance the likelihood of obtaining directly relevant investigative information with the potential for wasting valuable time and effort. 7. The special agent must also be mindful of the disclosure provisions of 26 USC §6103 in determining how best to obtain necessary information, (see IRM 9.3.1, Disclosure).

9.4.2.2 (08-09-2004) Governmental Sources of Income
1. Federal, state, county, and local governments maintain an abundance of official files that may be relevant to a criminal investigation. Governmental records are obtained in a variety of means and most are detailed in IRM 9.4.4, Requests for Information. The IRM 9.4.4, contains a description of records maintained and procedures on obtaining internal records from the IRS along with other Federal agencies and regulatory commissions.

9.4.2.3 (08-09-2004) Business, Financial, Professional, and Educational Records
1. Most businesses, organizations, or other entities maintain records concerning their dealings with individuals. These records include financial transactions, personal identification information, degree or licensing information, and an infinite variety of other information of value to criminal financial investigations. 2. Organizations and business entities that may be of special interest in investigations, along with a description of the records they maintain and the procedures to obtain such records, can be found

Internal Revenue Manual - 9.4.2 SOURCES OF INFORMATION

in IRM 9.4.4, Requests for Information.

9.4.2.4 (03-15-2007) Investigative Computer Databases, Networks and Other Electronic Storage Media
1. A large number of computer databases are available on the internet to special agents searching for information concerning their investigations. Netscape’s Net Directory, as well as similar search engines on most internet services, provide nationwide name search capability. Databases of alumni associations, professional licenses, society memberships, club memberships, business customers, subscribers to various services, and a vast number of other organizations maintain current lists that allow the general public to contact people with similar interests, or provide assistance to those who are in search of a business or professional relationship. Use of these databases provides a fast and inexpensive means of obtaining a wide variety of useful leads. 2. Field offices have access to Lexis/Nexis, a comprehensive legal reporting service which, for a fee, provides complete and up to the minute information on all published legal decisions in the nation. Furthermore, it contains most of the resources of a law library, with instantaneous access. 3. Electronic information can be obtained by consent, subpoena, or search warrant. Consent searches must be voluntarily given and may be limited in scope. Seek consent from the subject, employer, or other party with authority established by law. Always consider the use of a summons/subpoena for computer information not under the control of the subject. Summons/subpoena computer records as they exist at the time of service of the subpoena. Direct the recipient to make and safeguard a copy of the requested information, even if they intend to contest the subpoena. Subpoena the subject(s) for passwords and encryption keys. A grant of act of production immunity may be required. 4. Statutes impose restrictions and obligations on the special agent and any operator of public computer services. Review the following before attempting to obtain evidence from electronic sources:
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First Amendment to the Constitution Fourth Amendment to the Constitution Wiretap Act, 18 USC §2510 and 18 USC §2521 18 USC §2701 and 18 USC §2711 Privacy Protection Act, 42 USC §2000aa

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Internal Revenue Manual - 9.4.2 SOURCES OF INFORMATION

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Federal Rules of Criminal Procedure, Rule 41 Federal Rules of Evidence, Sections 901, 1001, and 1002

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5. Obtain additional information to secure evidence from computers and other electronic media from the following sources:
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Internet Investigation Guidelines written by CI Computer Investigative Specialist (CIS) Federal Guidelines for Searching and Seizing Computers published by the Department of Justice (DOJ) Internet Investigation Guidelines published by the DOJ Division Counsel/Associate Chief Counsel (Criminal Tax) Computer and Telecommunications Coordinators (CTCs) at the local US Attorney's Office or Assistant US Attorneys that have received special training in the computer crimes subject area Tax Division, Department of Justice: Senior Trial Attorney, available at (202) 514-2832 and Fax (202) 514-3081 Computer Crime and Intellectual Property Section, Department of Justice at (202) 5141026 and fax (202) 514-6113

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9.4.2.4.1 (08-09-2004) Treasury Enforcement and Communication System
1. The Treasury Enforcement and Communication System (TECS) is used extensively by the law enforcement community. This subsection discusses the information available on TECS. Items discussed include:
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description and purpose of TECS responsibilities for TECS information available from TECS

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Internal Revenue Manual - 9.4.2 SOURCES OF INFORMATION

9.4.2.4.1.1 (03-15-2007) Description and Purpose of Treasury Enforcement and Communication System
1. Treasury Enforcement and Communication System (TECS) is a computerized information system designed to identify individuals and businesses suspected of, or involved in, violation of Federal law. Treasury Enforcement and Communication System is also a communications system permitting message transmittal between Treasury law enforcement offices and other Federal, national, state, and local law enforcement agencies. The TECS provides access to the FBI's National Crime Information Center (NCIC) and the National Law Enforcement Telecommunication Systems (NLETS) with the capability of communicating directly with state and local enforcement agencies. The NLETS provides direct access to state motor vehicle departments.

9.4.2.4.1.2 (08-09-2004) Responsibilities for the Treasury Enforcement and Communication System
1. The responsibility for TECS lies both in Headquarters (HQ) and the field offices. The following subsections provide a brief description of these responsibilities.

9.4.2.4.1.2.1 (08-09-2004) Director, Warrants and Forfeitures
1. The Director, Warrants and Forfeitures will be responsible for ensuring that all TECS entries meet authorized disclosure criteria. 2. All fugitive entries will be made through HQ and all non-fugitive entries will be made through or authorized by the Director, Warrants and Forfeitures. 3. Headquarters is also responsible for conducting and coordinating periodic training for TECS operators, as well as providing operating instructions, including the TECS Operating Manual, at all locations, and additional instructions as needed.

9.4.2.4.1.2.2 (08-09-2004) Resident Agent in Charge, Fraud Detection Center
1. Each Resident Agent in Charge (RAC), Fraud Detection Center (FDC), will be responsible for:

Internal Revenue Manual - 9.4.2 SOURCES OF INFORMATION

A. designating TECS users and coordinating their training B. performing queries for field offices upon request, and reporting the results upon receipt of a TECS reply (either a HIT or a No Record) by telephone, transmission of the TECS hardcopy reply to the field office, or by attachment of the hard-copy reply to the primary investigation (PI) being evaluated

9.4.2.4.1.2.3 (08-09-2004) Special Agent in Charge
1. The Special Agent in Charge (SAC) in each field office will be responsible for: A. designating a TECS Systems Control Officer (SCO) to assist other users and compliance functions in obtaining authorized data B. designating TECS users and coordinating their training C. disseminating written instructions to field office personnel regarding TECS query requests within the general guidelines as stated in this section D. providing HQ with a mailing list for their field office of direct distribution recipients of wanted circulars

9.4.2.4.2 (08-09-2004) Information Available From Treasury Enforcement and Communication System
1. All information retrieved from TECS must be stamped OFFICIAL USE ONLY. 2. The US Customs Financial Intelligence Branch (FIB) Financial Information Database provides information via TECS as follows: A. Form 4789, Currency Transaction Reports (CTR) B. Reports of Foreign Bank and Financial Accounts (FBAR), Treasury Form 90-22.1 C. Form 8362, Currency Transaction Reports by Casinos (CTRC) D. Suspicious Activity Reports (SARs), Form TDF 90-22.47

Internal Revenue Manual - 9.4.2 SOURCES OF INFORMATION

3. Also available from FIB's Financial Information Database are special computer runs summarizing CMIR data. Requests for special computer runs must be sent to the IRS Detroit Computing Center. Requests must include: A. the individual or business name B. address C. identifying number (social security number (SSN), employer identification number (EIN), etc.) 4. Printouts will only be generated for specific entities where a large volume of filings are applicable or where a search is required utilizing parameters not available for on-line queries. 5. Requests for special computer runs summarizing CTR, CTRC, and FBAR data should be made to the IRS Detroit Computing Center, Attn: CI Representative, 985 Michigan Ave., Room 1043, Detroit, MI 48226. Requests should be signed by the SAC, and should include: A. individual or business name B. address C. identifying data (SSN, EIN, etc.) D. zip code or zip code range E. field office code

9.4.2.4.2.1 (08-09-2004) Individual Records
1. Individual records available from the TECS database come from the Immigration and Customs Enforcement (ICE), Bureau of Alcohol, Tobacco and Firearms (ATF), Treasury Inspector General Tax Administration (TIGTA) and IRS-CI.

9.4.2.4.2.1.1 (08-09-2004) US Customs and Border Protection Service Records
1. US Customs and Border Protection Service records include:

Internal Revenue Manual - 9.4.2 SOURCES OF INFORMATION

A. Subject records of enforcement interest on persons, vehicles, vessels, aircraft, organizations (including businesses), articles, and firearms. B. Investigation records and enforcement information. C. Private Aircraft Enforcement System (PAES) which identifies tail numbers, owner and pilot of aircraft, as well as aircraft and passenger arrival. D. Vessel and aircraft sightings. E. Land Border Primary and Secondary operations concerning motor vehicles and their passengers entering the United States.

9.4.2.4.2.1.2 (08-09-2004) Bureau of Alcohol, Tobacco, and Firearms Records
1. Bureau of Alcohol, Tobacco, and Firearms records include: A. wanted persons and fugitives B. known and suspected violators of laws falling within the jurisdiction of ATF C. felons and dishonorably discharged veterans who have requested relief to own firearms and/or explosives under the Gun Control Act of 1968 D. violent felons E. gangs and terrorists

9.4.2.4.2.1.3 (08-09-2004) Treasury Inspector General, Tax Administration
1. Treasury Inspector General Tax Administration records include: A. wanted persons and fugitives B. prosecution records C. arrests, indictments, and information (including convictions, dismissals, and other dispositions)

Internal Revenue Manual - 9.4.2 SOURCES OF INFORMATION

D. stolen guns E. stolen articles

9.4.2.4.2.1.4 (08-09-2004) IRS - Criminal Investigation
1. The IRS-CI records include: A. wanted persons and fugitives B. non-resident delinquent taxpayers C. entries involved in the Intelligence (INTEL) database concerning questionable refund schemes D. all investigations included in Criminal Investigations Management Information System (CIMIS) 2. Investigations included in the CIMIS are available through TECS via (command code) Subject Query Internal Revenue (SQIR). The purpose of having CIMIS records in TECS is to notify the field offices that another agency or CI office has queried the investigation subject. The CIMIS records input into TECS are not available to other agencies. The database for CIMIS information can be queried by: A. name B. social security number C. investigation number D. alias information (including doing business as a partnership) E. related investigation number

9.4.2.4.2.2 (03-15-2007) Report of International Transportation of Currency or Monetary Instruments, Financial Crimes Enforcement Network Form 105

Internal Revenue Manual - 9.4.2 SOURCES OF INFORMATION

1. The Currency or Monetary Instruments (CMIR) file contains a record of every individual who has filed a Financial Crimes Enforcement Network (FinCEN) Form 105 (formerly Customs Form 4790), Report of International Transportation of CMIR. This form is required to be filed by each person who physically transports, mails, ships, receives, or causes to be physically transported, mailed, shipped, or received currency or other monetary instruments in an aggregate amount exceeding $10,000 on any one occasion from the United States to any place outside the United States, or into the United States from any place outside the United States. A transfer of funds through normal banking procedures, which does not involve the physical transportation of currency or monetary instruments, is not required to be reported. 2. If a TECS query results in a positive response, information contained on the CMIR will be received. If it becomes necessary to obtain a copy or certified copy of the CMIR, a request which includes the Report Control Number (RCN), should be directed to the Director of FinCEN at the Financial Crimes Enforcement Network, Post Office Box 39, Vienna, Virginia 22183. The request should include all available identifying data including: A. name B. social security number C. report control number D. date of birth 3. For a certified copy of the CMIR, the request must also include the scheduled court date.

9.4.2.4.2.3 (08-09-2004) Reports of Foreign Bank and Financial Accounts
1. The FBAR, Form 90-22.1, is a Treasury form used by individuals, partnerships, trusts, or corporations having a financial interest in or authority, signatory or otherwise, over one or more bank accounts, securities accounts, or other financial accounts in a foreign country, when such account(s) have an aggregate value in excess of $10,000. This form is required to be filed at the Memphis Fraud Detection Center or at any local IRS office. The Memphis Fraud Detection Center presently processes all Forms 90-22.1 for input to TECS. 2. The TECS foreign bank account files contain a record of entities who have submitted FBARs. If a TECS query results in a positive response, the name, address, SSN or EIN of the subject, and a microfiche number will be received. 3. If it becomes necessary to obtain a copy or certified copy of a Treasury Form 90-22.1, a request

Internal Revenue Manual - 9.4.2 SOURCES OF INFORMATION

should be directed to the Currency and Banking Reports Division, Criminal Investigation Program Coordinator, Detroit Computing Center, 985 Michigan Ave., Room 1043, Detroit, MI 48226. The request should include the microfiche number of all forms requested. 4. Requests for special computer runs summarizing FBAR data should be made to the IRS Detroit Computing Center, Attn: CI Representative, 985 Michigan Ave., Room 1043, Detroit MI 48226. Requests should be signed by the SAC, and should include: A. the individual or business name B. address C. identifying numbers (SSN, EIN, etc.) D. zip code, zip code range, or field office code

9.4.2.4.2.4 (08-09-2004) Other Records Accessible Through the Treasury Enforcement and Communication System
1. Other records accessible through TECS include the NCIC and the NLETS.

9.4.2.4.2.4.1 (08-09-2004) The National Crime Information Center
1. The NCIC is operated by the FBI and contains records on: A. wanted persons and missing persons B. criminal history C. stolen and (felony) non-stolen vehicles D. stolen license plates E. stolen articles F. stolen securities G. stolen boats

Internal Revenue Manual - 9.4.2 SOURCES OF INFORMATION

H. stolen guns

9.4.2.4.2.4.2 (08-09-2004) The National Law Enforcement Telecommunication System
1. The NLETS links the law enforcement agencies across the United States. The NLETS can be used to obtain: A. drivers license information B. motor vehicle registration information C. boat registration information D. snowmobile registration information 2. The NLETS queries can be made from TECS for vehicle registration information (RQ). The following information can be used to make the query: A. license plate number, year, and vehicle type B. vehicle ID number, make, and year 3. The NLETS queries can be made from TECS for drivers license information (DQ). The information needed for this type of query is: A. name, date of birth, and sex B. drivers license number 4. The NLETS queries can be made from TECS also for state criminal history record information (IQ). For the state criminal history query enter: A. name and social security number B. name, date of birth, and sex 5. To retrieve a full criminal history record (FQ) use the identification number from the IQ query.

Internal Revenue Manual - 9.4.2 SOURCES OF INFORMATION

9.4.2.4.2.4.3 (08-09-2004) State Driver's License and Vehicle Registration
1. All states will provide drivers license (DQ) and vehicle registration (RQ) information from motor vehicle files; however, the files of all states are not automated, therefore, there may be a delay in response time.

9.4.2.4.2.5 (08-09-2004) Uses of Treasury Enforcement and Communication System Queries
1. The TECS queries can be useful to CI when evaluating information or in an investigation.

9.4.2.4.2.5.1 (08-09-2004) Information Evaluation
1. If information appears to have CI potential, the following queries could be useful: A. TECS - To determine whether other agencies have ongoing or closed investigations or other information within CI's jurisdiction. B. NCIC, State, and Local Criminal History Files - Requests for criminal history files will be processed only for law enforcement purposes. Therefore, this information cannot be disseminated to other IRS functions. C. INTEL Files - To determine whether an entity or characteristic may be associated with a questionable refund scheme.

9.4.2.4.2.5.2 (08-09-2004) Other Agency Investigations
1. The Treasury Enforcement and Communication System may be queried to determine if a subject is or has been investigated by another Treasury agency. The Treasury Enforcement and Communication System may be useful in establishing a contact point within another agency or IRS field office from which available information can be requested. This action will also serve to prevent jeopardizing ongoing investigations and duplication of efforts. 2. The TECS records often contain information, which may help to identify associates of the subject. 3. The TECS, through the Private Aircraft Enforcement System (PAES), provides FAA information

Internal Revenue Manual - 9.4.2 SOURCES OF INFORMATION

regarding private aircraft, pilot, and passenger arrivals coming into the United States. 4. Data regarding land border and airport crossings by vehicles, passengers and pedestrians entering the United States can be retrieved on-line. The primary query history retrieval process also allows for the overnight retrieval (via printed reports) of records between one and six years old. 5. Demographic data is available through TECS at the five digit zip code level and at the Census Bureau Enumeration District (BGED) level.

9.4.2.4.2.5.3 (08-09-2004) Other IRS Functions
1. Most TECS information is available to other IRS functions for use in investigations. The SAC, will designate a TECS coordinator to assist other operating divisions in securing information from TECS. All requests should be submitted on Form 5523, TECS Query Request and approved by the appropriate Supervisory Special Agent (SSA) or higher supervisory official. The approving official will submit all requests to the CI TECS coordinator. Emergency requests may be made by an SSA. All information from TECS must be stamped FOR OFFICIAL USE ONLY. 2. The NCIC, state and local criminal history files, are available through the Interstate Identification Index (III) (Criminal History Files). These files may be used only in the administration of criminal justice. Therefore, this information cannot be disseminated to other operating divisions.

9.4.2.4.2.5.4 (08-09-2004) Contacting Nonresident Delinquent Taxpayer Through Treasury Enforcement and Communication System
1. To help alleviate the compliance problem of collecting delinquent taxes from taxpayers who, because they reside outside the jurisdiction of US courts, are not subject to ordinary administrative and judicial collection procedures, the IRS has a contact program which involves entering the names of certain nonresident delinquent taxpayers in TECS. This will help the IRS to contact nonresident delinquent taxpayers who routinely travel to the United States for business, employment, or personal reasons. 2. The objective of the contact program is to improve tax administration and compliance by: A. collecting delinquent taxes B. securing delinquent returns

Internal Revenue Manual - 9.4.2 SOURCES OF INFORMATION

C. identifying cases with criminal potential for referral to CI 3. The success of the program depends on timely collection actions by the field offices.

9.4.2.4.2.5.5 (08-09-2004) Treasury Enforcement and Communication System Information Available to Other Law Enforcement Agencies
1. Treasury Enforcement and Communication System information can be provided to other law enforcement officials provided the following rules are followed. 2. Third agency rule provides that information released to an agency cannot be released by that agency to another agency without the prior knowledge and consent of the agency that originally provided the information. 3. According to NCIC: Each criminal justice agency receiving an Interstate Identification Index (III) (Criminal History) response shall record any third party dissemination of any III response to another criminal justice agency or an individual within another criminal justice agency, or to anyone legally entitled to receive such information who is outside the original receiving agency. (A notation must be made in the case file.)

9.4.2.5 (03-15-2007) Informants
1. Individuals who provide information and evidence to the Internal Revenue Service, law enforcement, and government agencies have traditionally been referred to as informants. The use of informants in generating investigations and developing leads is a critical part of the investigative process. There are a variety of individuals who provide information. Some desire to report suspicious or illegal activity while others want to actively assist with the development of evidence. Careful consideration and scrutiny must be applied when contemplating the use of informants who act at the direction of the IRS. Many informants will be utilized in a covert capacity by assisting in the monitoring of conversations and undercover operations. It is the responsibility of every special agent and manager to evaluate these informants and their use prior to engaging in such activities. These individuals will be acting at the direction of the IRS and it is therefore vital that the IRS put forth a diligent effort to determine who they are dealing with and the potential outcome of their actions. 2. This section addresses: A. the classifications of informants,

Internal Revenue Manual - 9.4.2 SOURCES OF INFORMATION

B. the registration process for confidential informants, C. the levels of approval required for authorizing the use of informants, and D. the handling of informants

9.4.2.5.1 (03-15-2007) Classification of Informants
1. Informants are classified into three categories: A. Confidential Informant (CI) B. Cooperating Witness (CW) C. Source of Information (SOI)

9.4.2.5.1.1 (03-15-2007) Confidential Informants (CI)
1. A Confidential Informant (CI) is any individual who: A. provides useful and credible information to a special agent regarding criminal activities, and from whom a special agent expects or intends to obtain additional useful and credible information regarding such activities in the future; B. acts at the direction of the IRS; and C. has any one of the following characteristics:

i. expects their identity to remain confidential ii. faces the potential of any type of retaliation iii. receives payment or other compensation for future information or services (a memorandum of understanding must be prepared) iv. is a federal prisoner, or v. is a current or former member of the witness security program 2. If deemed necessary, a special agent or supervisor may classify an individual as a confidential informant for any other reason not listed that would require confidentiality.

Internal Revenue Manual - 9.4.2 SOURCES OF INFORMATION

3. The identity of the confidential informant is legally protected under the Freedom of Information Act (FOIA). Exemption (b)(7)(D) of the FOIA provides for the protection of records or information that can disclose the identity of a confidential source. The Supreme Court has ruled that confidentiality should not be applied automatically by law enforcement, but on a case by case basis. Consideration may include the understanding by the informant that the communications are confidential, threats of retaliation, prior retaliatory acts, or dangers faced by prison informants. 4. Confidentiality is not an assurance of complete anonymity or secrecy, but an assurance that the IRS will not disclose the cooperation of the confidential informant, the information they provide, or their identity unless absolutely necessary. 5. To prevent the CI from testifying, the special agent will put forth every effort to secure other evidence and witnesses in place of the CI. 6. Confidential Informants will be handled in accordance with the following subsections.

9.4.2.5.1.2 (03-15-2007) Cooperating Witness (CW)
1. A Cooperating Witness (CW) is any individual who: A. provides useful and credible information to a special agent regarding criminal activities, and from whom a special agent expects or intends to obtain additional useful and credible information regarding such activities in the future; B. acts at the direction of the IRS; C. does not expect their identity to be kept confidential; and D. has agreed to testify 2. Unlike a Confidential Informant, there is no expectation of confidentiality with a cooperating witness. A CW is expected to testify so they must understand that their identity may eventually be disclosed pursuant to judicial or administrative proceedings. 3. Cooperating Witnesses will be handled in accordance with the following subsections.

9.4.2.5.1.3 (03-15-2007) Source of Information (SOI)

Internal Revenue Manual - 9.4.2 SOURCES OF INFORMATION

1. Sources of Information can be categorized into two types. A. The first would be an individual who does not meet the definition of a Cooperating Witness or Confidential Informant. • An example would be an individual who telephones or visits an IRS office to provide information but will not be directed in the future by the IRS to secure evidence. • Another example would be an individual who will be paid for information or evidence they secured independently and not at the direction of the IRS. • If any of these individuals will be directed by the IRS to secure evidence (e.g., recording a monitored conversation), the individual is then either a CI or CW. B. An SOI can also be an individual who: i) Provides useful and credible information to a special agent regarding criminal activities, and from whom a special agent expects or intends to obtain additional useful and credible information regarding such activities in the future; and ii) Provides information to a special agent solely as a result of legitimate routine access to information or records, such as a government agency or a legitimate business (e.g., financial institution), and not as a result of criminal association with persons of investigative interest to a special agent; and iii) Provides such information in a manner consistent with applicable law. • As an example, an employee of a financial institution who provides information in compliance with the Bank Secrecy Act (BSA) is a Source of Information. • Federal, state, and local law enforcement officials and other governmental officials, acting within the scope of their authority, who provide information to the IRS are considered Sources of Information. However, if such officials provide information with regard to corruption within their own agency, such as the acceptance of bribes by police officers, the officials shall be considered either a CW or a CI, depending on the circumstances.

9.4.2.5.1.4 (03-15-2007) Classification of Subjects and Defendants
1. A subject of a criminal investigation or the defendant in a criminal proceeding who provides information to a special agent will either be classified as a CI, CW, or SOI; whichever is more appropriate. • As an example, if the subject of an investigation cooperates, agrees to record conversations with co-conspirators at the direction of the IRS, is expected to testify and does not require confidentiality, then the subject is a cooperating witness. If there is a concern of a retaliatory act against this subject, they will be classified as a confidential informant. • If a defendant cooperates and simply provides testimony against co-conspirators, then the individual is a Source of Information.

Internal Revenue Manual - 9.4.2 SOURCES OF INFORMATION

2. A special agent should consult a Federal Prosecutor and/or a Criminal Tax Attorney prior to utilizing these individuals as a CI, CW, or SOI.

9.4.2.5.2 (03-15-2007) Report Requirements for Confidential Informants
1. A special agent will be required to complete the following reports when handling a Confidential Informant: A. Form 9830, Request for Control Number, will be submitted to SIT. B. Form 9831, Approval to Utilize a Confidential Informant or Cooperating Witness, will be prepared to authorize the use of a CI. C. Form 9832, Annual Suitability Review of a Confidential Informant, will be completed every October to verify the CI’s suitability, justify the continued use of the CI, and verify that the CI reported taxable payments made by the IRS during the previous tax year. D. Form 9833, CI Identity Record, will be completed for each approved CI to document the identity of the CI. E. Form 9834, Instructions to CI/CW, will be reviewed with each CI. F. Form 9835, Receipt for Cash (if applicable), will be completed for each payment to a CI. G. Record of Deactivation. 2. Every January a memorandum will be prepared to document that a paid confidential informant was advised of the total amount of taxable payments made by the IRS during the preceding tax year.

9.4.2.5.3 (03-15-2007) Report Requirements for Cooperating Witnesses
1. A special agent will be required to complete the following reports when handling a Cooperating Witness: A. Form 9831, Approval to Utilize a Confidential Informant or Cooperating Witness, will be prepared to authorize the use of a CW.

Internal Revenue Manual - 9.4.2 SOURCES OF INFORMATION

B. Form 9834, Instructions to CI/CW, will be reviewed with each CW.

9.4.2.5.4 (03-15-2007) Registration and Handling of Confidential Informants and Cooperating Witnesses
1. Special agents are required to register, also known as " number" , Confidential Informants. Upon registration the CI will be referred to by their assigned control number to maximize concealment of their identity. Registration will include the request for a control number, performing a suitability check to evaluate the CI, obtaining authorization from the proper level of management, and providing instructions to the CI. Additionally, periodic reviews of the CI’s suitability will be performed. This process enables the special agent to evaluate and monitor the CI’s credibility, reliability, criminal history, tax filing status, and other factors. As a CI, the IRS will be protecting the individual’s identity, information and cooperation from disclosure; therefore, it is of utmost importance to maintain a thorough review and monitoring process. 2. A Cooperating Witness is not required to be registered (numbered) as there is neither an expectation of confidentiality, nor any other characteristic of a CI. Since the CW will be acting at the direction of the IRS, the special agent still needs to obtain authorization from the proper level of management, evaluate the credibility and reliability of the CW, and instruct the CW as to what actions they can and cannot take. The initial suitability review is the same for CWs as it is for CIs. If at any time it is determined that a factor meeting the classification of a Confidential Informant develops (e.g., a threat to the CW), a special agent needs to register the Cooperating Witness as a Confidential Informant.

9.4.2.5.4.1 (03-15-2007) Registering a Confidential Informant – Form 9830
1. Prior to seeking authorization to utilize a CI, a special agent will obtain a control number from the Office of Special Investigative Techniques (CI:OPS:SIT). A Form 9830 will be prepared and submitted to SIT via email to *CI HQ-SIT-Confidential Informants. In exigent circumstances an individual can be utilized as a CI prior to registration, however, verbal authorization is required, followed by the submission of Form 9830 no later than seven (7) calendar days after verbal authorization is granted. 2. Special Investigative Techniques will conduct a search to determine if the CI has been or is currently being utilized by Criminal Investigation. If a conflict is identified, SIT will review the CI’s history and report their findings to the requesting special agent for further action and/or resolution.

Internal Revenue Manual - 9.4.2 SOURCES OF INFORMATION

3. Special Investigative Techniques will provide the requesting agent a control number for the CI. From this point forward, the CI will be referenced by his/her control number. It is then the responsibility of the special agent to obtain the required authorization to utilize the CI, comply with the reporting requirements, and deactivate the informant at the appropriate time pursuant to the following subsections.

9.4.2.5.4.2 (03-15-2007) Approval to Utilize a Confidential Informant or Cooperating Witness Form 9831
1. It is essential to evaluate the reliability and credibility of every CI/CW. Form 9831, Approval to Utilize a Confidential Informant or Cooperating Witness, will be used to evaluate the individual’s suitability to serve as a CI/CW. The special agent will complete Form 9831 and forward it through management to the proper approving official. The approving official should consider, at a minimum, the following suitability factors to determine whether or not to authorize the use of the individual: A. The person's age. B. The person's alien status. C. Health of the CI/CW. D. Criminal history (record checks need to be maintained). E. The extent to which the IRS is ensuring that the information or assistance is limited to criminal matters. F. The extent to which the person's information or assistance would be relevant to a present or potential investigation or prosecution and the importance of such investigation or prosecution. G. The nature of any relationship between the CI and the subject or target of an existing or potential investigation or prosecution, including but not limited to a current or former spousal relationship or other family tie, and any current or former employment, business or financial relationship. H. The person's motivation in providing information or assistance, including any consideration sought from the government for this assistance. (People provide information for various reasons. When evaluating an informants reliability and credibility, his/her motives need to be considered. Possible motives may include seeking monetary gain,

Internal Revenue Manual - 9.4.2 SOURCES OF INFORMATION

gaining revenge, altruism, self-aggrandizement, law enforcement buff, or eccentric thrill seeking.) I. The extent to which the person's information or assistance can be corroborated. J. The record of the IRS and the record of any other law enforcement agency (if available to the IRS) regarding the person's prior or current service as a CI/CW, including, but not limited to, any information regarding whether the person was at any time terminated for cause. K. The person's reliability and truthfulness. L. The person's prior record as a witness or informant in any proceeding. M. Whether the person is a substance abuser or has a history of substance abuse. N. Whether the person is a relative of an employee of any law enforcement agency. O. For Title 26 investigations - Whether the individual is a tax professional, including an attorney, accountant, return preparer, or enrolled agent. If so, a Criminal Tax Attorney must be contacted for advice on using this person and the following factors should be considered: • i. whether the tax professional has a Power of Attorney (POA) from the potential subject • ii. whether the tax professional currently has an agreement to work as an attorney for the potential subject •iii. whether the tax professional is owed money by the potential subject • iv. whether the potential subject is aware that he/she is being investigated • v. whether the subject has invoked the Fifth Amendment relative to the IRS investigation P. Title 26 investigations – The individual’s tax filing and payment history, particularly any delinquencies (problems in this area do not necessarily preclude use of the informant; however, steps should be taken to correct any problems prior to the individual working with the IRS). Q. The risk of physical harm that may occur to the person or his/her immediate family or close associates as a result of providing information or assistance to the IRS. R. The risk that the person might adversely affect a present or potential investigation or prosecution. S. Whether the person is a public official, law enforcement officer, union official, employee of a financial institution or school, member of the military services, a representative or

Internal Revenue Manual - 9.4.2 SOURCES OF INFORMATION

affiliate of the media, or a party to, or in a position to be a party to, privileged communications (e.g., a member of the clergy, a physician, or a lawyer). If so, Criminal Tax will be consulted as well as the assigned Federal prosecutor in a grand jury case. T. Whether the person is reasonably believed to be the subject or target of a pending criminal investigation, is under arrest, or has been charged in a pending prosecution. U. Whether the person is reasonably believed to pose a danger to the public or other criminal threat, or poses a risk of flight. 2. Although not required, the use of a polygraph to test the individual's credibility should be considered by the approving official. 3. Verbal approval to authorize the use of a CW/CI can be obtained in exigent circumstances, but must be followed up with the Form 9831. 4. The approved Form 9831 will be placed in the control file for CIs (see IRM 9.4.2.5.5 on control file) or the case file for CWs. 5. An index file maintained by the SAC in each field office to track CIs and CWs will be updated (see IRM 9.4.2.5.6 on index file).

9.4.2.5.4.3 (03-15-2007) Authorizing the Use of a Confidential Informant or Cooperating Witness
1. Upon completion of the Form 9831, it must be forwarded through management to the proper approving official. The following subsections list the levels of approval for the various types of CI/CWs

9.4.2.5.4.4 (03-15-2007) Approval Level - Special Agent in Charge or Director, Field Operations
1. The SAC may authorize the use of most CI/CWs except when any one of the following factors are present, in which case the Director, Field Operations is the approving official: A. Risk of physical harm that may occur to the CI and/or the CI’s immediate family or close associates as a result of assisting the IRS. (There should be no CWs in this category. These individuals should be registered as CIs.)

Internal Revenue Manual - 9.4.2 SOURCES OF INFORMATION

B. Risk that the CI/CW’s activities may adversely affect another investigation or potential prosecution. C. The CI/CW is a public official, law enforcement officer, member of the military services, a representative of the news media, or potentially a party to privileged communications (e.g., a member of the clergy, physician, a lawyer or certain experts retained by a lawyer). Criminal Tax and the Federal prosecutor, if assigned, need to be consulted and concurrence received. D. It is believed that the individual is the subject of a pending criminal investigation, poses a danger to the public or other criminal threat, or poses a risk of flight. 2. Verbal authorization may be obtained in exigent circumstances followed by the written authorization no later than seven (7) calendar days after verbal authorization is granted.

9.4.2.5.4.5 (03-15-2007) Approval Level - Director, Operations Policy and Support
1. If any one of the following situations is known at the time of authorization, is identified at a later date, or subsequently develops, approval by the Director, Operations Policy and Support (CI:OPS) is required: A. When the CI/CW is a foreign national. (A foreign national is defined as any individual who is not a United States citizen.) B. When the CI/CW is to obtain information from a foreign country. C. When foreign travel by any CI/CW is anticipated. 2. The SAC of the field office will submit a memorandum through the Director, Field Operations to the Director, CI:OPS requesting approval to use the CI/CW. The memorandum should be routed to the Office of Special Investigative Techniques for processing. The memorandum should address the following factors: A. CI's number or code name, or in the case of a CW, their name. B. Country of citizenship and current US immigration status (e.g., tourist visa, business visa, resident alien, if applicable). C. Position currently held by the CI/CW (e.g., foreign government official or bank official).

Internal Revenue Manual - 9.4.2 SOURCES OF INFORMATION

D. Pertinent background information such as criminal record, associates, and employment history. E. Reliability of CI/CW. F. Criminal violations the CI/CW is providing information about, approximate dollar amounts of the violations, and years under investigation. G. Detailed statement explaining the background of the investigation, what information the CI/CW’s participation can provide, how the CI/CW will obtain the information, why the information is needed, and any other pertinent facts. H. If the CI/CW is obtaining information from a foreign country, identify country, the nature of the information, and how the CI/CW is obtaining the information. I. If foreign travel is involved, detail the country or countries to be visited, a complete itinerary, and a description of the circumstances that require the CI/CW to travel.

Note:
If items (h) or (i) are applicable, the concurrence of the Director, International (CI:OPS:I) is also required. 3. Verbal authorization may be obtained in exigent circumstances followed by the written authorization no later than seven (7) calendar days after verbal authorization is granted.

9.4.2.5.4.6 (03-15-2007) Department of Justice Approval Required
1. Consistent with DOJ requirements, approval by DOJ, Criminal Division, Office of Enforcement Operations (OEO) is required for: A. Use of Federal prisoners or individuals under the control of the United States Marshals Service or Bureau of Prisons as informants, (see IRM 9.4.2.5.13). B. Use of current or former participants in the Federal Witness Security Program as informants, (see IRM 9.4.2.5.12). C. Use of informants to engage in the warrantless interception of certain sensitive categories of verbal communications as specified by the Attorney General, (see IRM 9.4.7,

Internal Revenue Manual - 9.4.2 SOURCES OF INFORMATION

Consensual Monitoring). Such categories include members of congress, Federal judges, governors, and diplomats, or someone in custody of the Marshal’s Service or Bureau of Prisons, etc.

9.4.2.5.4.7 (03-15-2007) Federal Probationers, Parolees, Detainees, or Supervised Releasees
1. The United States Parole Commission (USPC) requires that Federal probationers, parolees, detainees and supervised releasees agree in writing not to act as informants or in other similar capacities for a law enforcement agency. However, exceptions may be granted on a case by case basis. 2. If a special agent desires to utilize one of these types of individuals as a confidential informant or cooperating witness, the IRS must obtain the permission of a Federal probation, parole, or supervised release official with the authority to grant such permission, and this permission shall be documented. If such permission is denied or it is inappropriate for operational reasons to contact the appropriate Federal official, the IRS may seek to obtain authorization for the use of such individual from the court that is responsible for the individuals’ probation, parole, or supervised release provide that the IRS first consults with Criminal Tax and/or the Unites States Attorney’s Office.

9.4.2.5.4.8 (03-15-2007) Annual Suitability Review of a Confidential Informant – Form 9832
1. In October of each year an annual suitability review will be performed for all open Confidential Informants. The controlling special agent will complete Form 9832 to evaluate the suitability and justification to continue the use of the CI. 2. During this review, the special agent will determine that the CI reported all taxable payments received in the previous tax year. In the event that the suitability review results in a determination that the CI did not report the payments as required, the IRS may utilize this information to discontinue the CI’s relationship with the government and, in so doing, may disclose the reason for discontinuing the relationship to other government agencies associated with the investigation, including the United States Attorney’s Office. In Non-Title 26 investigations where taxable payments were made to a CI who is required to file a tax return, the special agent should ensure that a "Consent to Disclosure of Tax Information " (Consent), which is attached to a Form 9835, was signed by the CI. 3. If the review of the CI's tax account and/or tax return identifies issues of possible noncompliance the CI should be re-contacted. The controlling special agent will attempt to resolve the matter and advise the CI of the proper income tax reporting treatment for the particular issue. This meeting

Internal Revenue Manual - 9.4.2 SOURCES OF INFORMATION

and advisement will be documented and filed in the CI's control file. Subsequent IDRS research will be conducted to ensure the CI has filed an amended or corrected return. 4. If the CI still fails to comply with their Federal income tax obligations, the CI will be deactivated for cause and must not be used again. An Information Report Referral, Form 3949, will be prepared and forwarded for civil or criminal action. The narrative section should simply state that the individual received a taxable payment, refer to the amount received from the IRS, and generally describe the area of noncompliance. While the CI’s name shall be reported, the narrative should not disclose the nature of the relationship or the services performed on behalf of Criminal Investigation. 5. If any other adverse findings are uncovered pursuant to this suitability review, they should be reviewed to determine whether deactivation is warranted. If it is recommended that the CI be deactivated for any cause, the deactivation procedures will be followed. 6. The Form 9832 will be forwarded to the SAC for approval to continue the use of or deactivate the CI. 7. The Form 9832 and signed consent (if prepared) will be placed in the CI’s control file.

9.4.2.5.4.9 (03-15-2007) Form 9833, CI Identity Record
1. After authorization to utilize the CI is granted, the controlling special agent will prepare Form 9833, CI Identity Record, and obtain a photograph of the CI. 2. This form must be prepared manually as it contains the CI’s personal information. No electronic version will be prepared. 3. Although not required, it is recommended that fingerprints be obtained for identification purposes. 4. The Form 9833, photograph, and fingerprints (if obtained) will be filed in the control file.

9.4.2.5.4.10 (03-15-2007) Form 9834, Instructions to Confidential Informant or Cooperating Witness
1. Special agents will fully debrief the CI concerning his/her knowledge of criminal or unlawful activities. Special agents should always make every effort to elicit all facts known by the CI/CW at the initial contact. CI/CWs frequently supply only the information they think is important rather

Internal Revenue Manual - 9.4.2 SOURCES OF INFORMATION

than relating all facts. 2. Special agents must avoid conveying any confidential investigative information to a CI/CW (e.g., information relating to undercover activity, surveillance, search warrants, or the identity of other actual or potential informants), other than necessary for operational reasons. 3. The special agents will advise the CI/CW that any information submitted by him/her concerning violations not under the IRS' jurisdiction will be furnished to the appropriate enforcement agency in accordance with IRS procedures, (see IRM 9.3.1, Disclosure, and IRM 11.3, Disclosure of Official Information). 4. Prior to utilizing a CI/CW, the controlling special agent, in the presence of the backup agent or other law enforcement officer, will review the applicable information on Form 9834 with the CI/CW, which covers the following: A. The information provided by the CI/CW to the special agent must be truthful and that they must abide by the instructions of the special agent and may not represent themselves as an employee of the IRS. B. The CI/CW’s assistance and the information provided are entirely voluntary. C. The special agent cannot promise or agree to any immunity from prosecution or other consideration by a Federal Prosecutor’s office or a court in exchange for the CI/CW’s cooperation, since the decision to confer any such benefit lies within the exclusive discretion of the Federal Prosecutor’s office and the court. However, the special agent will consider (but not necessarily act upon) a request by the CI/CW to advise the appropriate Federal Prosecutor’s Office or Court of the nature and extent of his/her assistance to the special agent. D. The CI/CW has not been authorized to engage in any criminal activity and has no immunity from prosecution for any unauthorized criminal activity. E. The CI/CW will not tamper, intimidate, or entrap any witnesses, nor will they fabricate, alter, or destroy evidence. F. The CI/CW will not utilize any unlawful techniques (e.g., breaking/entering; unauthorized electronic surveillance; opening/tampering with the mail, etc.) G. The CI/CW may not enter into any contract or incur any obligation on behalf of the United States Government, except as specifically instructed and approved by the IRS. The CI/CW is not an employee of the US Government and must not take any independent action on behalf of the US Government.

Internal Revenue Manual - 9.4.2 SOURCES OF INFORMATION

H. The special agent cannot guarantee any rewards, payments, or other compensation [if applicable]. The CI/CW needs to be advised of the IRS reward policy and procedures, and the use of Form 211, Application and Public Voucher for Reward for Original Information. I. The CI/CW was advised that any information he/she submits concerning non-tax violations of Federal, state, or local criminal laws will be furnished to the appropriate enforcement agency. J. [If applicable] No promises or commitments can be made, except by the Immigration and Naturalization Service, regarding the alien status of any person or the right of any person to enter or remain in the United States. This instruction should be provided if there is any apparent issue of immigration status that relates to the CI/CW. K. For CIs, the United States government will strive to protect a CI‘s identity, but cannot guarantee that it will not be divulged. The IRS will not disclose the cooperation, identity or information unless absolutely necessary (or under the terms of a separate memorandum of understanding, if applicable). L. In the event that the CI receives any rewards, payments, or other compensation from the IRS, the CI is liable for any taxes that may be owed. Payments should not be construed as an employer/employee relationship between the CI and the IRS. M. For CWs, they will be expected to testify in any legal proceedings, their identity may be disclosed, and there is no expectation of confidentiality on the part of the CW. 5. The content and meaning of each of the foregoing instructional points must be clearly conveyed to the CI/CW. Immediately after these instructions have been given, the agent shall require the CI/CW to acknowledge his/her receipt and understanding of the instructions by initialing each applicable instruction on the Form 9834. The agent and the other law enforcement official shall document that the instructions were reviewed with the CI/CW and that the CI/CW acknowledged the instructions and his/her understanding of them by signing Form 9834. 6. If the CI/CW refuses to initial the Form 9834 or, for operational reasons, the agent decides against requiring the CI/CW to sign or initial a written acknowledgment, the agent and the other law enforcement official shall document that the instructions were read verbatim to the CI/CW and that the CI/CW orally acknowledged the instructions. 7. The instruction and documentation procedures shall be repeated whenever it appears necessary or prudent to do so. 8. Form 9834 will be filed in the control file for a Confidential Informant or the case file for a

Internal Revenue Manual - 9.4.2 SOURCES OF INFORMATION

Cooperating Witness.

9.4.2.5.4.11 (03-15-2007) Form 9835, Receipt for Cash
1. Form 9835, Receipt for Cash, will be completed whenever a payment is made to a CI or any other individual receiving payment. 2. Form 9835 will be filed in the control file for Confidential Informant.

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Internal Revenue Manual - 9.4.2 SOURCES OF INFORMATION (Cont. 1)

Chapter 4. Investigative Techniques Section 2. SOURCES OF INFORMATION (Cont. 1)

9.4.2 SOURCES OF INFORMATION (Cont. 1)
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9.4.2.5 Informants 9.4.2.6 Treaties, Mutual Assistance Laws, Simultaneous Investigation Programs, and Agreements 9.4.2.7 Financial Investigations National Database Information Tracker 9.4.2.8 Terrorism Investigations Exhibit 9.4.2-1 United States- Canada Simultaneous Criminal Investigation Program

9.4.2.5 Informants 9.4.2.5.4 Registration and Handling of Confidential Informants and Cooperating Witnesses 9.4.2.5.4.12 (03-15-2007) Deactivation of Confidential Informant
1. When a CI is no longer providing information or assistance to the IRS, the individual should be deactivated. The IRS may also terminate the relationship for cause if the CI engages in conduct that violates the individual's agreement with the IRS. In either case, appropriate notification documented in writing and witnessed by two special agents shall be made if the CI can reasonably be located. If the CI cannot be located, efforts to locate the informant shall be documented. 2. Whenever a CI is deactivated, SIT will be notified via an email through the SAC. This email needs to be forwarded to *CI HQ-SIT-Confidential Informants. The email must include the control number, date of deactivation, how the CI was notified, who advised the CI and the reason for deactivation.

9.4.2.5.4.13 (03-15-2007)

Internal Revenue Manual - 9.4.2 SOURCES OF INFORMATION (Cont. 1)

Advisement of Taxable Income
1. Every January CIs must be advised of the total amount of taxable payments made to them in the previous tax year. The SACs will direct the imprest fund cashiers to summarize the payments made to each confidential informant (SOC 9101 expense) and advise the controlling special agents of these amounts. In accordance with the LEM, special agents will contact the CIs and advise them of the total taxable amount paid and document the contact in a memorandum of contact. This memorandum will be placed in the control file and a copy forwarded to *CI HQ-SIT-Confidential Informants.

9.4.2.5.5 (03-15-2007) Control File
1. The SAC will establish a control file for each approved CI. 2. The SAC will ensure that all CI identities are protected in accordance with IRM 1.16.15, Physical Security Program, Minimal Protection Standards. The records must be stored in a security container or security room. 3. The control file will contain: A. a photograph of the CI and fingerprints (if obtained) B. the results of a criminal history check of the CI C. Form 9831, Approval to Utilize a CI or CW D. Form 9832, Annual Suitability Review of a CI E. Form 9833, CI Identity Record F. Form 9834, Instructions to CI or CW G. Form 9835, Receipt for Cash H. any promises or benefits, and the terms of such promises or benefits, that are given a CI by a special agent or any other law enforcement agency, if available to the IRS (e.g., Memorandums of Understanding) I. deactivation documentation

Internal Revenue Manual - 9.4.2 SOURCES OF INFORMATION (Cont. 1)

J. memoranda advising CI of total taxable income during tax year

9.4.2.5.6 (03-15-2007) Index Files - Confidential Informants and Cooperating Witnesses
1. The SAC will maintain an index file listing the CI's name, control number, approval date, current status of the CI (i.e., active or inactive), and the date of deactivation. This information will be filed in a security container or security room. 2. The SAC will also maintain an index file for all Cooperating Witnesses listing the CW's name and date of approval to utilize the CW.

9.4.2.5.7 (03-15-2007) Special Agent Authority
1. A special agent does not have any authority to make any promise or commitment that would prevent the government from prosecuting an individual for criminal activity. A special agent must be cautious and avoid providing an informant with any false perception that the special agent has such authority.

9.4.2.5.7.1 (03-15-2007) Responsibility of Special Agents when Dealing with a Confidential Informant or Cooperating Witness
1. To protect the integrity of the relationship with the CI/CW and to enhance security, two special agents will be assigned to control the CI/CW. The controlling agents will always be fair and truthful with a CI/CW, and should make no promises that cannot be fulfilled. 2. While controlling a CI/CW, special agents will not: A. Make any promises of immunity or give the impression that the special agent has the authority to do so. B. Authorize the CI/CW to participate in an act that would be unlawful if conducted by a law enforcement officer. C. Let a CI/CW determine the procedure to be used in the investigation or otherwise control the investigation.

Internal Revenue Manual - 9.4.2 SOURCES OF INFORMATION (Cont. 1)

D. Condone any violation of law in order for a CI/CW to obtain information. If a defendant can show that the CI/CW was acting under some arrangement with Federal agents, he/she will have a viable defense. Whenever there appears to be a possibility of entrapment or some other unlawful act by a CI/CW, he/she should be guided in a manner that will prevent the occurrence of such acts. E. Maintain anything other than a professional relationship with the CI/CW based upon mutual respect. Special agents should guard against the relationship becoming personal instead of professional. A special agent's ability to be objective is jeopardized if a personal relationship develops with the CI/CW. F. Make any commitments for payment or protection to a CI/CW without proper authorization from the approving official as set forth in IRM 9.11.1, Fiscal and Budgetary Matters. Agreements made without authorization may become the personal responsibility of the maker. G. Intervene on behalf of a CI/CW with the IRS or with any other Federal, state, or local agencies. H. Offer to have the tax liability of a CI/CW compromised in exchange for information about another taxpayer. This prohibition includes, but is not limited to, agreeing to a reduction or elimination of the tax liability of an attorney, accountant, enrolled agent, or other return preparer in exchange for information about the client or such person. Questions in this area should be addressed to CT Counsel assigned to the special agent’s field office. I. Engage in sexual or social relationships with any CI/CW. J. Pay a source with personal funds. K. Interfere with, inappropriately influence, or impede any criminal investigation, the arrest or prosecution of a CI/CW. L. Accept any gifts from a CI/CW.

9.4.2.5.8 (03-15-2007) Avoidance of Illegal Acts or Violation of Rights
1. The IRS will not condone unconstitutional or criminal acts by a CI/CW in gathering information for the IRS. Such behavior can jeopardize the investigation. In accordance with the completion of Form 9834, Instructions to CI or CW, all CI/CWs will be advised of their obligation to not commit illegal acts.

Internal Revenue Manual - 9.4.2 SOURCES OF INFORMATION (Cont. 1)

2. Special agents cannot use or encourage a CI/CW to commit acts that the IRS cannot otherwise authorize its undercover agents to commit. Examples include: A. Violations of criminal statues and infringement upon the constitutional rights of any person by IRS personnel or by CIs/CWs are prohibited. B. Directing a CI/CW to employ such techniques as illegal threats or assaults against any person, breaking and entry into another's premises without a search warrant, the illegal seizure of paper or other property, or the illegal interception of conversations. C. However, special agents in the performance of their official duties can employ investigative techniques that appear to, but do not in fact, violate a state or local criminal statute (e.g., holding oneself out as a drug trafficker or displaying jewelry represented to be stolen). D. Criminal Tax Counsel should always be consulted when questions exist as to the proper application of the law (Federal, state, or local) to a given situation.

9.4.2.5.8.1 (03-15-2007) Information or Evidence Obtained Illegally
1. Evidence illegally obtained may be utilized by the IRS if the unlawful taking was by a CI/CW without the participation or collusion of IRS employees. The CI/CW will be advised that the IRS may no longer accept any further information in this manner. 2. In receiving unsolicited information for the first time from an informant, the IRS may accept the information and in accordance with its value, may pay for such information even if it may have been obtained illegally by the CI/CW. Special agents should consult Criminal Tax for guidance. Once authorization is received to pay the informant, the procedures under the Payments to Informants section must be followed.

9.4.2.5.8.2 (03-15-2007) When Violations of Law Occur in Gathering Information
1. If a CI/CW presents illegally obtained information and it can be ascertained that the CI/CW has had previous contact with the IRS, either in connection with the matter at hand or other matters, the SAC will review the facts and circumstances surrounding the incident. 2. The SAC will review this information in an attempt to determine if an IRS employee, during a prior contact with the CI/CW, indicated or implied to the individual that illegal techniques would

Internal Revenue Manual - 9.4.2 SOURCES OF INFORMATION (Cont. 1)

be condoned by the IRS or would be beneficial to an IRS investigation. 3. The SAC will also seek a legal opinion from CT Counsel and the Federal prosecutor, if assigned, regarding the likelihood of the information being suppressed, should an investigation based on the information, go to trial. 4. In all instances where illegally obtained information is presented to the IRS by a CI/CW, he/she will be advised that the IRS will not accept any further information obtained in this manner. The special agents dealing with the individual will prepare a memorandum documenting that the CI/CW was so advised. 5. The SAC will determine whether appropriate law enforcement authorities should be advised. Notification, if deemed to be appropriate, will be in accordance with IRM 9.3.1, Disclosure and IRM 11.3, Disclosure of Official Information. 6. Consider terminating the use of the CI and not utilizing the information obtained by the CI or leads derived from the information until authorized to do so by the Director, OPS.

9.4.2.5.8.3 (03-15-2007) Notification of Alleged Violations
1. The SAC will notify the Director, Field Operations, of the facts relating to the alleged violation. The Director, Field Operations will notify the Director/Deputy Director, Operations, Policy and Support via a detailed written report and through SIT. Intervening reviewing officials may add their comments, if they so desire, by separate memorandum. The report will contain the following information: A. The facts and circumstances concerning the investigation with which the CI/CW was connected. B. The facts and circumstances concerning the illegal act(s) of the CI/CW. C. The action taken by IRS to disclose the illegal act(s) to the appropriate law enforcement authority, or the circumstances that led to the SAC's decision not to notify the appropriate law enforcement authority. D. A description of the information obtained through the CI/CW's illegal act(s). E. An assessment of the criminal potential of the investigation if the information obtained by the CI/CW is not used, and the SAC's opinion on whether the investigation should be closed or continued.

Internal Revenue Manual - 9.4.2 SOURCES OF INFORMATION (Cont. 1)

F. Any circumstances that, in the SAC's opinion, would justify continued use of the CI or the information obtained by the CI/CW.

9.4.2.5.8.4 (03-15-2007) Violations of Law Involving Serious Crimes
1. For the purpose of this subsection, the term " serious crime" means any crime that is a felony under Federal or state law. 2. Whenever the IRS has knowledge that a CI/CW has acted outside the scope of his/her IRS assignment and committed a serious crime, the SAC shall make a determination whether to notify the appropriate law enforcement authorities in accordance with IRM 9.3.1, Disclosure and IRM 11.3, Disclosure of Official Information. 3. The SAC will notify the Director, Field Operations, by memorandum, of the facts and circumstances concerning the CI/CW's criminal violation, and provide a recommendation on reporting the violation and the continued use of the CI/CW. 4. In determining whether to notify appropriate law enforcement authorities of criminal activity by a CI/CW, the reviewing and/or approving officials, as appropriate, shall consider the following factors: A. seriousness of the crime in terms of danger to life and property B. degree of certainty of the information regarding the criminal activity C. whether the appropriate authorities already know of the criminal activity and the CI/CW's identity D. degree to which notification would endanger the life of the CI/CW or another person

9.4.2.5.9 (03-15-2007) Protection of a Confidential Informant's Identity
1. Special agents should only disclose the identity of a CI to authorized persons who have an official need to know the identity of the individual. 2. Written documents such as an affidavit, memorandum, etc., should not disclose the identity of the CI or the gender of the CI.

Internal Revenue Manual - 9.4.2 SOURCES OF INFORMATION (Cont. 1)

3. During an investigation, communications with the CI are based on the CI's trust that his/her identity will not be disclosed and that he/she will not be harmed physically, economically, or otherwise because of his/her action in furnishing information to the government. 4. The protection of a CI is absolutely essential in enforcement activities. However, there are certain judicial and administrative situations that require the disclosure of the CI's identity. 5. Special agents will not divulge either the identity of the CI or the existence of a CI in the investigation to anyone other than authorized persons with an official need to know. Authorized persons include but are not limited to Supervisory Special Agents (SSA); Assistant Special Agents in Charge (ASAC); SAC; Directors, Field Operations; Director, Office of Special Investigative Techniques; Director, Operations Policy and Support; and the Chief, CI. 6. To provide maximum security regarding his/her identity and existence, all possible attempts will be made to ensure that a CI will not be used as a witness, placed in a position where he/she might become a witness, or unnecessarily identified in court without his/her consent. 7. In order to avoid the conflict between preservation of a CI's anonymity and the possible disclosure of his/her identity during the investigation and prosecution, special agents should make a decision early in the investigation about the feasibility of developing other evidence to take the place of the CI's testimony at trial. If this is not feasible, the investigation should be closed. 8. Communications of a CI should not be attached to income tax returns, associated with workpapers, or included in the exhibits submitted with a report. 9. The Federal prosecutor and his/her designee are required to maintain as confidential the identity of any CI and the information the CI has provided, unless obligated to disclose it by law or court order. 10. If a special agent needs to provide Federal prosecutors with access to any CI information, they must return it to the special agent at the conclusion of the case. 11. Employees have a continuing obligation after leaving employment with the IRS to maintain as confidential the identity of any CI and the information he/she provided.

9.4.2.5.9.1 (03-15-2007) In the Courts
1. It is the duty of every citizen to communicate to his/her government any information which he/she has relative to an offense against its laws. To encourage him/her in performing his/her duty, the courts have held such information to be confidential within the discretion of the government.

Internal Revenue Manual - 9.4.2 SOURCES OF INFORMATION (Cont. 1)

2. The courts, on the basis of public policy, will not compel or allow disclosure of a CI's identity without the consent of the government unless such information is useful evidence to vindicate the accused, lessens the risk of false testimony, or is essential to the proper disposition of the case. 3. Mere speculation as to the usefulness of the CI's testimony to the defendant is insufficient to justify disclosure of his/her identity. Instead, the defendant must indicate some concrete circumstances that might justify overcoming both public interest in encouraging the flow of information and the CI's private interest in his/her own safety. 4. Since the privilege lies with the government rather than the CI, the government may waive it. Further, the privilege is deemed waived if the CI is put on the witness stand. 5. Moreover, the Supreme Court has held that the government is not entitled to a presumption that all sources supplying information to the government in the course of a criminal investigation are confidential sources within the meaning of Exemption (b)(7)(D) of 5 USC §552, Freedom of Information Act (FOIA). 6. Instead, the Supreme Court held that a source should be deemed "confidential" only if the source furnished information with the understanding that the government would not divulge the communication except to the extent deemed necessary for law enforcement purposes.

9.4.2.5.9.2 (03-15-2007) On the Witness Stand
1. If a special agent, who has promised a CI that his/her identity would be kept confidential, is asked to disclose such identity on the witness stand and no objection to the question is made or sustained, he/she should not refuse to answer. Instead, the special agent should state that he/she cannot disclose the information on the ground that it was a privileged communication to an officer of the government and that he/she is bound by instructions not to disclose such information. 2. He/she should maintain this position pending instructions from his/her supervisors and advice from the attorney for the government. 3. The special agent's failure to disclose this information may have several results: A. The court may, if it thinks that no harm is done to the defendant, accept the special agent's position B. The court may dismiss the action. C. The special agent's supervisors may release him/her from his/her obligation.

Internal Revenue Manual - 9.4.2 SOURCES OF INFORMATION (Cont. 1)

D. If the special agent persists in his/her refusal to answer, the court may find him/her in contempt.

9.4.2.5.9.3 (03-15-2007) Access to Name of an Approved Confidential Informant by the Inspector General
1. If the identity of a CI is needed by the Treasury Inspector General for Tax Administration (TIGTA), Office of Audit, or Office of Investigations, the SAC will obtain approval through the Director, Field Operations from the Director, Operations Policy and Support prior to disclosing the information.

9.4.2.5.9.4 (03-15-2007) Certification of the Imprest Fund
1. Treasury Inspector General for Tax Administration, Office of Audit reports on investigative imprest funds requirement to contain a certification that the fund was properly utilized. To issue such a certification, TIGTA, Office of Audit must conduct audit tests to verify that a paid informant exists, that the informants information was evaluated prior to payment, and that the quality of the information was commensurate with the amount of the payment. 2. To conduct such tests, TIGTA, Office of Audit must be given the true identity of a paid informant. Generally, such tests will be made only on random samples of informants. 3. In rare instances, the Chief, CI, will divulge the names of other confidential informants to TIGTA, Office of Audit when deemed necessary.

Note:
The name of a CI is restricted to the TIGTA, Office of Audit supervisor conducting the audit and is not accessible to any other member of the TIGTA, Office of Audit staff. The name will not be contained in the TIGTA, Office of Audit report or working papers.

9.4.2.5.9.5 (03-15-2007) Treasury Inspector General for Tax Administration Contact of a Confidential Informant or Cooperating Witness
1. In the event TIGTA management determines it is essential to contact a CI to meet an audit or

Internal Revenue Manual - 9.4.2 SOURCES OF INFORMATION (Cont. 1)

investigation objective, TIGTA, Office of Investigations personnel will make that contact. 2. Treasury Inspector General for Tax Administration management will notify the Director, Field Operations of the intention to contact the CI. In those instances where it is deemed inappropriate to notify the Director, Field Operations, TIGTA management will notify the Inspector General or his/her designee of this decision who will advise the Chief, CI, of TIGTA's intention to contact the CI without notification to the Director, Field Operations.

9.4.2.5.9.6 (03-15-2007) Documents of a Confidential Nature
1. Tax returns and other documents shown to a taxpayer or a witness in the course of an investigation, or returns or similar documents to be produced in court, must be reviewed by special agents prior to such disclosure to ensure that nothing is attached (such as a CI's communication) that might reveal the existence or identity of a confidential source of information.

9.4.2.5.9.7 (03-15-2007) Confidential Informants or Cooperating Witnesses Accompanying Special Agents
1. There are circumstances when special agents may find it necessary or desirable to have a CI/CW accompany them on an investigative contact or activity. For example, the CI/CW might prove of value in identifying a witness or taxpayer, pinpointing a location, introducing a special agent to a witness or potential CI/CW, or, in exceptional circumstances, attending a witness interview. 2. In using a CI/CW for these and similar purposes, special agents must exercise extreme care to protect the CI/CW's identity, provide for the CI/CW's physical safety, and prevent unauthorized 26 USC §6103 disclosure of returns or return information, (see 9.3.1, Disclosure). In instances where 26 USC §6103 issues are involved, advice of a field office CT Counsel must be sought. 3. As a general rule, a CI/CW should not be present while special agents are conducting a witness interview. There are, however, exceptional circumstances when special agents may find it necessary or desirable to have a CI/CW accompany them on a witness interview (for example, when the CI/CW's presence during the interview will make a reluctant witness feel more at ease). In this regard: A. A CI/CW's presence is permitted only when the witness requests the CI/CW's presence, or the witness expressly consents to the CI/CW's presence. This request or consent must be documented by the special agents in the memorandum of interview or other interview record.

Internal Revenue Manual - 9.4.2 SOURCES OF INFORMATION (Cont. 1)

B. Under no circumstances should a CI/CW be introduced as a Federal agent, nor should anything be said or done that would lead the witness to mistakenly believe that the CI/CW is a Federal agent, an IRS employee, or other government representative. Thus, it is very important that the special agents, and not the CI/CW, question the witness and otherwise control the interview. If the CI/CW's assistance is needed during the interview, the CI/CW should write out the questions and give them to the special agents.

9.4.2.5.10 (03-15-2007) Payments to Informants
1. Criminal Investigation employees must adhere to the following guidelines when involved with paying an informant: A. When a CI will not furnish information without payment, the special agents should first advise the individual of IRS reward procedures and the use of Form 211, Application for Reward for Original Information. If the individual does not wish to use these procedures, the special agents may find it necessary to purchase specific information. In these situations, the special agents should determine the value of the information and advise the individual that any agreement for payment is subject to approval by higher authorities. B. When evaluating the evidence to determine a value, consideration should be given to whether the information would have been brought to IRS' attention from other sources, the information has significant tax administration implications, the information has any potential probative value, and the investigative time that was saved by obtaining the information in this manner. C. Under no circumstances are IRS employees authorized to assure that a reward will be paid in any amount, to indicate the amount of probable recovery, or to confirm that a recovery was based upon the information submitted. D. Any payments requested that may exceed the threshold established through the Form 211 procedures must be coordinated through the Operations Policy and Support, Financial Crimes Section in National Headquarters. Financial Crimes will consult Criminal Tax and General Legal Services to prepare a special agreement. E. A Memorandum of Understanding must be prepared for any Confidential Informant who will receive compensation for future services or information (e.g., salary, lump sum or random payments, or awards based on a percentage of forfeiture). This will be coordinated with SIT. Special Investigative Techniques will consult Criminal Tax and General Legal Services to prepare a Memorandum of Understanding. F. Guidance for paying informants can be found in 9.11.1, Fiscal and Budgetary Matters.

Internal Revenue Manual - 9.4.2 SOURCES OF INFORMATION (Cont. 1)

2. Delegation Order No. 16 (Rev. 16), Authorization to Approve Confidential Expenditures, authorizes payments for information, as well as other expenses necessary for gathering information in an investigation. The required authorization levels are as follows: A. Special Agent in Charge: $10,000 or less B. Director, Field Operations: $20,000 or less C. Chief/Deputy Chief: amounts greater than $20,000 3. In Non-Title 26 investigations where taxable payments are made to a CI who is required to file a tax return a "Consent to Disclosure of Tax Information" (Consent), which is attached to a Form 9835, must be prepared to determine whether the CI reported all taxable payments made by the IRS during a specific calendar year. In order for the IRS to conduct such determinations in NonTitle 26 investigations, the CI is required to sign the Consent authorizing the IRS to access his/her tax information. 4. One (1) Consent form is required for each tax year and will be completed at the time the first payment is made in each new tax year. 5. The CI must consent by signing the attached Consent form. If the CI refuses to sign his/her name to the Consent form because of concern about a potential disclosure of the CI’s confidential relationship with the IRS, or because of some other confidentiality concern, the CI may, instead, enter his/her registration number. The CI’s entering of his/her registration number constitutes the CI’s signature for purposes of the Consent.

9.4.2.5.10.1 (03-15-2007) Asset Sharing
1. Instructions concerning asset sharing that involve payments to or on behalf of a CI are contained in IRM Chapters 9.7, Asset Seizure and Forfeiture.

9.4.2.5.10.2 (03-15-2007) Claim for Reward
1. Instructions concerning rewards for information submitted to the IRS are contained in IRM 25.2, Information and Informants Rewards.

9.4.2.5.11 (03-15-2007)

Internal Revenue Manual - 9.4.2 SOURCES OF INFORMATION (Cont. 1)

Management Review
1. Each fiscal year, the Undercover Program Manager or CI:OPS:SIT analysts will review each field office's CI activity to ensure compliance with IRS procedures and current guidelines. The review should ensure that proper documentation exists in the registration files.

9.4.2.5.12 (03-15-2007) Title V Witnesses – Witness Security Program
1. The DOJ, OEO maintains a continuing and residual relationship with a person who was enrolled in the Witness Security Program after he/she has been relocated. Because of this relationship, OEO requires that investigative agencies and attorneys observe certain restrictions in dealing with current of former participants with respect to new investigations. 2. Once an individual has been accepted into the Witness Security Program, neither the witness nor any individual relocated because of the witness' cooperation may be used as a CI, unless the IRS can justify to OEO that the use of the individual in such a role is essential to the investigation. 3. Similarly, without the consent of the OEO, neither the witness nor any individual relocated because of the witness' cooperation may be used as a witness in an investigation, other than the investigation for which the witness was placed in the program. 4. Requests for the production of a protected witness must be made through the sponsoring attorney or the Director, Operations Policy and Support, Attention: Witness Security Coordinator. The request should be made at least 10 working days in advance of the requested date. This request should be prepared for the SAC's signature and submitted through the Director, Field Operations. The request must include: A. purpose of request B. date needed C. duration of appearance D. names of persons to be present E. name and telephone number of person to be contacted in the field office 5. If, while working with a CI/CW, it is learned or suspected that the CI/CW was a Title V protected witness, the SAC will prepare a memorandum to be submitted through the Director, Field Operations to the Director, Operations Policy and Support, Attention: WSC. The memorandum

Internal Revenue Manual - 9.4.2 SOURCES OF INFORMATION (Cont. 1)

will request contact with the OEO to determine whether the person was actually a protected person under the program and, if he/she was, to obtain approval from the OEO to use this person in the IRS investigation. 6. The SAC should include in the memorandum a brief explanation as to the importance of this person to the investigation, whether it is anticipated that he/she will be called as a witness before a grand jury or at a trial, and any other information the SAC feels should be brought to the attention of the OEO. 7. Until approval is obtained from the OEO, IRS will suspend its use of the individual as either a CI or witness. The use of a relocated witness by the IRS without the approval of the Director, OEO, could result in the witness(es) becoming the financial and physical responsibility of the IRS.

9.4.2.5.12.1 (03-15-2007) After Request Approved
1. The Witness Security Coordinator (WSC) for the IRS will forward the request approved by the Director, Operations Policy and Support, to the OEO. The OEO will forward approved requests to the Witness Security Division, US Marshals Service, or to the Inmate Monitoring Section, Bureau of Prisons, as appropriate and will forward an approved copy to the WSC for dissemination to the field. All communication to the OEO must be made through the Headquarters' WSC. 2. Prosecutors and investigators are requested to conduct interviews in neutral sites which will substantially reduce the danger to the witness and assist with the economical deployment of US Marshals Service personnel. 3. If a witness must be brought into a dangerous area, it is the responsibility of the prosecutor and the investigative agents to ensure that maximum use is made of the witness' time and that every effort has been made to keep such productions cost-effective. In the interest of security and economy, the witness must be returned to the relocation area or place of incarceration as soon as possible.

9.4.2.5.12.2 (03-15-2007) Contacting Protected Witnesses in a Federal Prison
1. Prior to contacting a protected witness who is an inmate at a Federal Correctional Institution under the jurisdiction of the Bureau of Prisons or under the custody of the US Marshals Service, it is necessary that approval be obtained from the OEO. 2. If it is learned that an incarcerated, protected witness may be in jeopardy, the Director, Operations Policy and Support, should be notified, so that he/she can refer the matter to the OEO whose responsibility it is to coordinate the matter with the Bureau of Prisons. Arrangements may then be

Internal Revenue Manual - 9.4.2 SOURCES OF INFORMATION (Cont. 1)

made to move the prisoner to another facility to assure protection.

9.4.2.5.12.3 (03-15-2007) Contacts by Protected Witnesses with Internal Revenue Service Employees
1. Occasionally, witnesses who have been provided protection by DOJ are faced with a situation where they believe their new identities may be in jeopardy because of the need to provide an IRS employee with information relating to their old identities. 2. In such situations, the witnesses have instructions to notify their contact point in the US Marshals Service who will notify the OEO. The OEO will notify IRS' contact point in CI, the WSC, who will be responsible for any coordination with the WSC's of the other operating divisions in order to resolve the matter in a manner that will protect the CI's identity as well as IRS's interest. 3. In addition, the above IRS procedures will be followed if, during the processing of a witness to be placed in Justice's Witness Security Program, the OEO determines that the witness has a IRS matter that should be resolved before the witness is relocated.

9.4.2.5.12.4 (03-15-2007) Required Justice Reports When Using Title V Witnesses In Investigations
1. Department of Justice requires that CI provide them with a report of significant events and results in CI investigations involving participation by a witness or Confidential Informant who has been accepted into Justice's Witness Security Program. 2. A similar report is required by DOJ on CI investigations that involve the participation of an IRS protected witness or Confidential Informant. 3. Reportable events include, but are not limited to, the following actions that may result from the participation or testimony of a protected witness or CI: A. executing a search warrant B. electronic surveillance C. arrest D. grand jury indictment

Internal Revenue Manual - 9.4.2 SOURCES OF INFORMATION (Cont. 1)

E. complaint 4. Reportable results include: A. guilty pleas B. acquittals C. convictions D. sentencing E. appeals 5. If a Form 1327-A, Arrest Report is prepared or entries are made into the Criminal Investigation Management Information System (CIMIS) for any of the above stated events, a copy of the Form 1327-A or an "Investigation Profile Report" from CIMIS will suffice for this reporting requirement, provided the form or the screen print is accompanied by a statement regarding the significance of the witness' or CI's participation in the event or result being reported. 6. The above report will be prepared for the signature of the SAC and submitted through the Director, Field Operations to the Chief, CI, Attention: Witness Security Coordinator. The report is due to the WSC within 10 work days after the last significant event. 7. Reports involving witnesses or CIs under Justice's Witness Security Program will be coordinated by WSC.

9.4.2.5.13 (03-15-2007) Use of Federal Prisoners
1. A Federal prisoner is considered any person who is in the custody of the United States Marshal’s Service or the Bureau of Prisons (BOP), or is under the BOP’s supervision, even if held at a local facility. 2. If the use of the Federal prisoner will result in the release or transfer of the Federal prisoner, or the Federal prisoner will be authorized to participate in illegal activity, or will participate in consensual monitoring, approval of the DOJ, Office of Enforcement Operations (OEO) must be obtained. 3. When requesting the use of Federal prisoners, the SAC will prepare a memorandum that will be

Internal Revenue Manual - 9.4.2 SOURCES OF INFORMATION (Cont. 1)

forwarded through the Director, Field Operations to the Director, Operations Policy and Support; Attn: Witness Security Coordinator, CI:OPS:SIT. The memorandum will include the following information: A. Identification information of the prisoner including, name, sex, race, date of birth, social security number, place of birth, citizenship, BOP register number, FBI number, miscellaneous number. B. Current location of prisoner including, facility name, city and state. C. Agency which has custody or supervision of prisoner and under what authority. D. Charges, including specific statutes, for which the individual is being detained, whether sentenced/not sentenced, and the sentencing details including date. E. A copy of the prisoner's arrest record/criminal history must be attached. F. The necessity of using the prisoner in the investigation including alternative investigative techniques which have been tried/considered and why these techniques have not worked or have not been tried. G. The name(s) and identification information of the target(s) of the investigation including their role in the crime or organization under investigation, their relationship/association with the prisoner and the principal criminal statute(s) involved. H. Whether the target(s) is/are aware of the prisoner's arrest or incarceration. If so, indicate the prisoner's cover story in order to safeguard the prisoner and the investigation. I. The details of the activity requested including, the role of the prisoner; the length of time needed; whether the prisoner will be released from custody of the USMS or BOP, and if so, into whose custody; whether the prisoner will be returned to the prison the same day or held elsewhere overnight, and if held elsewhere, provide that name, location and type of facility. Identify all judicial districts to which the prisoner will be transported. Provide details of the security measures planned to ensure the prisoner's safety, to limit risk to the public and to prevent escape, include the number of agents/officers to be assigned to the security detail including their agency affiliation; and the use of surveillance devices (body wire, video, etc) and where they will be hidden. When other law enforcement agencies are participating in this activity, at least two IRS-CI special agents must be assigned and one of those agents must be with the prisoner at all times. J. Whether the individual is expected to be a witness.

Internal Revenue Manual - 9.4.2 SOURCES OF INFORMATION (Cont. 1)

K. Whether a re-designation in custodial location is expected to be necessary during or upon completion of the investigative activity. L. Whether or not the prisoner is represented by counsel, and if so, whether counsel concurs with the prisoner's participation in this activity. Identify whether the prisoner is facing pending charges. (If the prisoner is facing pending charges and is not represented by counsel, the agency must indicate that the prisoner is voluntarily participating in the activity and does not wish to consult with an attorney). M. The name, judicial district and telephone number of the Federal prosecutor endorsing the requested activity. N. Acknowledgement that the Federal prosecutor has considered entrapment issues and foresees no problems. O. Acknowledgement that the Federal prosecutor has determined that the planned operation does not violate the Attorney General's "Contact with Represented Persons" guidelines with regard to either the prisoner, or any target(s), or other persons to be contacted during this operation and that any McDade issues (28 USC §530B) have been addressed. P. If a continuance is necessary, an interim progress report should be submitted. A detailed progress report should be submitted at the conclusion of the activity. Q. If the prisoner is on writ status, sealed court order(s) must be obtained after the request has been approved. 4. Upon receipt of the memorandum, the Witness Security Coordinator, will promptly transmit the request to the Office of Enforcement Operations, Criminal Division, DOJ, where it will be coordinated with the Bureau of Prisons. 5. The Office of Enforcement Operations will advise the Witness Security Coordinator, of its decision which, in turn, will be promptly communicated to the requesting field office. 6. Within 45 days of the conclusion of the activity, the SAC will forward a memorandum detailing the results of the activity, through the Director, Field Operations to the Director, Operations Policy and Support; Attn: Witness Security Coordinator.

9.4.2.5.13.1 (03-15-2007) United States Marshals Service Assistance
1. The US Marshals Service will be requested to provide assistance when the release or transfer of a

Internal Revenue Manual - 9.4.2 SOURCES OF INFORMATION (Cont. 1)

Federal prisoner is required as it is their responsibility for safekeeping and transporting in Federal prisoners.

9.4.2.5.13.2 (03-15-2007) When United States Marshal’s Service is Not Available
1. The United States Marshals Service will be requested to provide assistance in requests involving Federal prisoners due to their responsibility for the safekeeping of Federal prisoners. 2. If such assistance is not provided by the US Marshals Service, enough special agents should be assigned to the custody responsibilities to provide the constant presence of at least two special agents. 3. A security plan should be developed for the entire period of the temporary custody of the prisoner to ensure the safekeeping of the prisoner and the safety of all. This security plan should provide for: A. a personal search of each prisoner upon each occasion of taking custody B. no visits by other persons while the prisoner is in IRS custody, unless such visits facilitate the interrogation C. return of the prisoner to a Federally approved custodial facility or the prisoner's usual place of confinement at the end of each day D. adequate resources for constant, alert guarding of the prisoner if (c) is not possible E. use of personal physical restraint (handcuffs and leg irons) whenever appropriate F. on extended periods of custody, an appropriate system of communication with supervisory personnel and periodic status reports to the SAC 4. All personnel assisting with the custody and interrogation of a prisoner should be constantly aware that the prisoner's cooperation may be motivated by the desire to escape from custody. 5. If during the interview it becomes apparent that the prisoner may become the subject of a criminal investigation, the procedures for interviewing a person in custody should be followed.

9.4.2.5.13.3 (03-15-2007) State or Local Prisoners, Probationers, Parolees and Supervised

Internal Revenue Manual - 9.4.2 SOURCES OF INFORMATION (Cont. 1)

Releasees
1. Prior to utilizing a state or local prisoner, probationer, parolee, or supervised releasee, the SAC shall determine if the utilization of that person in such capacity would violate the terms and conditions of the person’s incarceration, probation, parole, or supervised release. If the SAC has reason to believe that utilization of the individual would violate such terms and conditions, prior to using the person, the IRS must obtain permission of the state of local prison, probation, parole, or supervised release official with the authority to grant such permission. 2. If the witness or informant is a non-Federal prisoner, the advice of the local Criminal Tax Counsel should be sought as to the process for securing custody under governing state law. 3. State prisoners will be handled in the same manner consistent with the procedures outlined when the United States Marshal’s Service is not available.

9.4.2.6 (08-10-2004) Treaties, Mutual Assistance Laws, Simultaneous Investigation Programs, and Agreements
1. Information from foreign countries can be obtained through the following legal mechanisms: A. Tax Treaties and Tax Information Exchange Agreements B. Mutual Legal Assistance Treaties and Laws C. Simultaneous Criminal Investigation Programs (SCIP) D. Letters Rogatory 2. Procedures for requesting information pursuant to these legal mechanisms are found in IRM 9.4.4, Requests for Information.

9.4.2.6.1 (08-10-2004) Tax Treaties and Tax Information Exchange Agreements
1. Among the legal instruments that permit exchange of information with foreign countries, pursuant to a criminal tax investigation, are tax treaties (formally known as Conventions) and Tax Information Exchange Agreements (TIEA). The Director, International (LM:IN) is the delegated US Competent Authority for all tax treaties and TIEAs, while tax attachs assigned to LM:IN have been delegated authority to sign certain correspondence for the Director, International (LM:IN)

Internal Revenue Manual - 9.4.2 SOURCES OF INFORMATION (Cont. 1)

relating to the exchange of information. The information obtained from these agreements can only be used for tax charges. If the information is intended to also be used for non-tax charges, it will have to be requested using a separate agreement. An updated list of the countries with which the Untied States has a tax treaty or TIEA can be found on the CI Web on International's Web page. 2. The Simultaneous Criminal Investigation Program (SCIP) is a program implemented to facilitate exchanges of information under tax treaties and TIEAs in cases where there appear to be substantial tax violations in both the United States and another foreign country. Policy and procedures for using the SCIP to conduct criminal investigations are found in subsection 9.4.2.6.3.

9.4.2.6.2 (08-10-2004) Mutual Legal Assistance Treaties and Laws
1. The United States currently has Mutual Legal Assistance Treaties (MLAT) with a number of countries. The MLATs can be used to obtain information from a foreign country for only those US criminal violations listed in the MLAT. An updated list of the countries with which the United States has a MLAT can be found on the CI Web site on International's Web page. 2. These treaties provide a vehicle to obtain testimony and tangible evidence from each country. The treaties offer a wide range of assistance from the judicial and executive authorities of each country involved. Each treaty designates the Attorney General as the Competent Authority for the United States who must handle requests under the treaty and whose approval is necessary for all requests. The Attorney General has delegated these powers and duties to the Assistant Attorney General of the Criminal Division. The MLATs can be used for both grand jury and administrative investigations. In some agreements, criminal tax charges are not listed in the MLAT, requiring the use of another bilateral agreement discussed in this section, to request the information. 3. Pursuant to a request under an MLAT, the requested authorities may: A. supply official records B. locate persons C. provide service of process D. execute search and seizures of property E. arrange for the appearance of witnesses or experts before the relevant judicial authority F. secure extraditions

Internal Revenue Manual - 9.4.2 SOURCES OF INFORMATION (Cont. 1)

G. transfer accused persons to the United States H. exchange relevant information relating to the laws, regulations, and international practices in criminal matters of the contracting state 4. Criminal Tax Counsel assigned to the field office will contact the Department of Justice (DOJ), Office of International Affairs (OIA) concerning any potential requests for assistance pursuant to a MLAT involving an administrative case. The formal request must be made via memorandum from the SAC, with concurrence of the Director, Field Operations, to the Director, International (CI:OPS:I) who will then forward it to the DOJ, OIA attorney working with the field office. The Chief, CI, will coordinate requests with DOJ, OIA. Requests should contain the following items: A. the subject matter and the nature of the investigation or proceeding B. the principal need for the evidence or information sought C. the full name, place and date of birth, address, and any other available information, such as nationality, which may aid in the identification of person(s) who are the subjects of the investigation or proceeding D. the name, address, and nationality of the person whose testimony or statements are sought, and/or from whom documents, records, or articles of evidence are requested E. a description of the documents, records or articles of evidence to be produced or preserved, and of the manner in which they should be reproduced or authenticated 5. The request, insofar as possible and to the extent necessary, shall also include: A. a description of the particular procedure to be followed, if any B. a statement as to whether sworn testimony or statements are required C. a description of the information, statement or testimony sought

9.4.2.6.3 (08-10-2004) Simultaneous Criminal Investigation Program
1. The objectives of the SCIP are to: A. Conduct investigations of individuals and/or companies involved in substantial tax violations in the United States and other foreign countries.

Internal Revenue Manual - 9.4.2 SOURCES OF INFORMATION (Cont. 1)

B. Eliminate the problems caused by taxpayers using the border to avoid production of records and reporting of income. 2. Currently there are working arrangements for the conduct of SCIP with Canada, Italy, France, and Mexico. The following procedures, which explain the Canadian SCIP, also apply to all countries with SCIP agreements. 3. The Director, International (CI:OPS:I) is designated by Delegation Order No. 4-12, Delegation to Act as "Competent Authority" Under Tax Treaties and Tax Information Exchange Agreements, as revised, to administer the program in the United States.

9.4.2.6.3.1 (08-10-2004) Simultaneous Criminal Investigation Program - Investigation Selection
1. The SAC should only recommend investigations for the program that have the potential for substantial liability and that indicate the subject is committing violations in both countries. 2. The SAC will forward any investigations recommended for the program through the appropriate Director, Field Operations to CI:OPS:I, (see Exhibit 9.4.2-1). 3. The Director, CI:OPS:I will review the proposed case. If it meets the criteria to be included in the SCIP, it will be forwarded to LM:IN. 4. The Director, CI:OPS:I will inform the recommending field office, by memorandum, of the action taken and send an information copy to the Director, Field Operations. 5. If an investigation is not accepted for the program, it will be worked as a routine investigation. If additional facts are developed, the investigation may be submitted for reconsideration. 6. If an investigation is approved for the program, LM:IN will transmit a letter to the Competent Authority requesting the foreign country's participation, (see Exhibit 9.4.2-1). 7. When the Competent Authority of the foreign country recommends an investigation for the program, CI:OPS:I will transmit a copy of the request to the appropriate SAC through the Director, Field Operations. The field office will evaluate the request within 60 calendar days and advise CI:OPS:I of its decision by memorandum routed through the Director, Field Operations. 8. If the field office decides to participate, LM:IN will send a Competent Authority acceptance letter, (see Exhibit 9.4.2-1 Cont. (2)). If not, LM:IN will notify the foreign country's Competent

Internal Revenue Manual - 9.4.2 SOURCES OF INFORMATION (Cont. 1)

Authority.

9.4.2.6.3.2 (08-10-2004) Criminal Investigation Program - Exchanging Information
1. Once competent authority letters have been exchanged and accepted, the SAC will designate a SSA. The participating foreign country will also designate a investigation supervisor. 2. The CI country attache' will coordinate an initial meeting to plan the investigative activity. The meeting will be held in the country which originated the request unless a mutually agreeable alternative location is determined. 3. The Director, CI:OPS:I will provide a list to LM:IN of individuals designated to participate in the initial and subsequent meetings. The list will identify the individuals by name, position, office, and security clearance. Names may be added or deleted as necessary. 4. Subsequent meetings will be arranged by the SSA and the designated investigation supervisor. The field office will notify the CI country attache' so the attache' may, at their option, participate. 5. Exchanges of information or documents must be made by the respective Competent Authorities. Information and documents to be exchanged will be transmitted by a brief letter describing the documents and prepared for LM:IN's signature, (see Exhibit 9.4.2-1 Cont. (3)). 6. The CI country attache' will note each document exchanged and maintain it in the investigation file. Each such document will also note that the information contained therein was secured under the provision of an income tax treaty and that its use and disclosure must be governed by the provisions of the treaty. 7. Exchange of information is permissible in pre-indictment, as well as post-indictment investigations. 8. Information that may be exchanged includes: A. Information related to the taxpayer, his/her companies, or named associates. B. Information relating to specific transactions believed to involve the taxpayer, his/her companies, or named associates. C. Title 31 information which is needed for tax administration, although requests for Forms 4789, Currency Transaction Reports, must be made on a specific name basis, since they do not fall within the routine information category of the present treaty.

Internal Revenue Manual - 9.4.2 SOURCES OF INFORMATION (Cont. 1)

9.4.2.6.3.3 (08-10-2004) Simultaneous Criminal Investigation Program - Grand Juries
1. Grand juries can be used in simultaneous investigations either at the request of the IRS or the attorney for the government, subject to DOJ approval. 2. Information from a US grand jury may be furnished to the respective Competent Authority for tax administration purposes by way of a court order pursuant to Fed. R. Crim. P. 6(e). The treaty partner will be required to meet the requirements of showing a particular need for the information and that the information is sought preliminary to or in connection with a judicial proceeding. 3. If a US multi-agency grand jury uses information received under the auspices of the tax treaty in an indictment and/or at trial, the indictment must include tax charges and must show a nexus between the tax charges and any other violations.

9.4.2.6.3.4 (08-10-2004) Simultaneous Criminal Investigation Program - Witness
1. The tax conventions with the respective SCIP countries contain no provisions requiring foreign witnesses to appear at trial. The resulting potential for trial problems should be evaluated both in making a request for a simultaneous investigation and during the investigation itself. 2. If arrangements cannot be made for a witness to appear at trial, Rule 15 depositions or letters rogatory may be used, (see IRM 9.4.2.6.4, Letters Rogatory).

9.4.2.6.3.5 (08-10-2004) Simultaneous Criminal Investigation Program - Disposition of Investigations
1. Jeopardy or termination assessments, that include information furnished through the program, can be handled in the normal fashion. The appropriate Competent Authority must be notified before any such action is taken. 2. Either country may withdraw from a simultaneous investigation at any time by advising the other country of its intent to do so, (see IRM 9.5.14, Closing Procedures). 3. Prosecution reports are processed in the normal fashion, subject to any additional requirements, (see IRM 9.5.12, Processing Completed Criminal Investigation Reports).

Internal Revenue Manual - 9.4.2 SOURCES OF INFORMATION (Cont. 1)

4. Simultaneous indictments and/or filing of charges is preferred if circumstances permit, making close coordination by the designated investigation supervisor imperative.

9.4.2.6.3.6 (08-10-2004) Simultaneous Criminal Investigation Program - Travel
1. All travelers on SCIP investigations must initially complete a continuous travel Form 1321, Authorization for Official Travel. Thereafter, CI:OPS:I will coordinate the processing with the Office of the Director, International (LM:IN:TAAS) for authority to travel on a trip-by-trip basis, (see IRM 9.11.2, Domestic and Foreign Travel).

9.4.2.6.3.7 (08-10-2004) Simultaneous Criminal Investigation Program - Disclosure and Publicity
1. The tax treaty contains a secrecy clause restricting disclosure of information exchanged pursuant to the treaty. Access to such information is governed by 26 USC §6103 and may be exempt from disclosure under 5 USC §552(b)(3) pursuant to (j)(2). 2. The competent authority should be alerted if any disclosure is contemplated. 3. While CI may disclose information obtained during a simultaneous investigation to other IRS personnel for tax administration purposes, they must inform the competent authority or the designated investigation supervisor of the intended use of the information. 4. Publicity in simultaneous or unilateral indictments should be handled in accordance with the procedures detailed in IRM 9.3.2, Publicity and Internal Communications.

9.4.2.6.4 (03-15-2007) Letters Rogatory
1. If a bilateral agreement does not exist with a country, it may be possible to use a letters rogatory to request the information. A letters rogatory is a formal request from a US Federal court, before which an action is pending, to the court of the foreign country in which the information/evidence is located. 2. Normally, letters rogatory can only be used in a post-indictment or post-compliant stage of the investigation. However, the United Kingdom and Hong Kong's evidentiary rules permit courts to release evidence to foreign courts for criminal investigations that have been instituted. There also exists case law that recognizes a district court's authority to issue letters rogatory for criminal

Internal Revenue Manual - 9.4.2 SOURCES OF INFORMATION (Cont. 1)

cases that have not yet been indicted. The special agent will work with the attorney for the government to petition the court to issue any such letters rogatory.

9.4.2.7 (03-15-2007) Financial Investigations National Database Information Tracker
1. Financial Investigations National Database Information Tracker (FINDIT) is a financial database developed by DOJ's Asset Forfeiture and Money Laundering Section (AFMLS). 2. The database is centered primarily on bank account numbers. The database includes financial information gathered from money laundering investigations occurring throughout the United States and overseas. It includes information gathered from grand jury subpoenas, search warrants, informants, and undercover pick up operations. 3. The objective of FINDIT is to identify domestic and international money launders and their connections to drug trafficking organizations. 4. Financial Investigations National Database Information Tracker allows the special agent to identify relationships, methods, and trends that exist between past and present money laundering investigations occurring in various field offices in the United States and overseas.

9.4.2.8 (08-10-2004) Terrorism Investigations
1. In additional to the traditional information sources available, there are unique resources available when conducting terrorist investigations. 2. Some of the information sources are listed below: A. USA Patriot Act B. Automated Case Support

9.4.2.8.1 (08-10-2004) USA Patriot Act
1. The USA Patriot Act amended the Right to Financial Privacy Act, by giving law enforcement and intelligence agencies the ability to obtain international terrorism related records from financial institutions via written requests, rather then subpoenas or court orders, (see IRM 9.4.4, Requests for Information).

Internal Revenue Manual - 9.4.2 SOURCES OF INFORMATION (Cont. 1)

9.4.2.8.2 (03-15-2007) Automated Case Support System
1. The Automated Case Support is administered by the FBI. The system consists of electronic case files that contains investigative information including interviews. Special agents with top secret security clearance and assigned to the Joint Terrorism Task Force (JTTF) have access to ACS.

Exhibit 9.4.2-1 (08-09-2004) United States- Canada Simultaneous Criminal Investigation Program
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Internal Revenue Manual - 9.4.4 Requests for Information

Chapter 4. Investigative Techniques Section 4. Requests for Information

9.4.4 Requests for Information
q q

9.4.4.1 Overview 9.4.4.2 Government Entities

9.4.4.1 (12-10-2007) Overview
1. This section establishes special procedures for special agents to follow in requesting information. These procedures must be followed in administrative investigations, and should be followed whenever possible in grand jury investigations.

9.4.4.2 (12-10-2007) Government Entities
1. A number of government agencies have established special procedures for special agents to follow in requesting information and should be followed whenever possible in grand jury investigations.

9.4.4.2.1 (12-10-2007) Internal Revenue Service Records
1. The IRS has established special procedures for special agents to follow in requesting information from within the agency.

9.4.4.2.1.1 (12-10-2007) Martinsburg Computing Center
1. The Martinsburg Computing Center (MCC) maintains the master file that is a tax record of all known taxpayers. The master file is separated into several categories, some of which are the business master file (BMF), the individual master file (IMF), information return master file

Internal Revenue Manual - 9.4.4 Requests for Information

(IRMF), tax return data base (TRDB), residual master file (RMF), and the retention register. 2. Information from both BMF and IMF is available on-line. This is accessed on the Integrated Data Retrieval System (IDRS) network via command codes BMFOL (business master file on-line) and IMFOL (individual master file on-line). In most situations, the availability of this information should eliminate the need for requesting a regular transcript of account. 3. Information from both the IRMF and the TRDB is available on line. A. The IRMF is accessed through the IDRS network using command code IRPTR (information returns processing transcript). This provides the current tax year, after June 30 of each year, and five prior tax years information return data (e.g., W-2, 1099, Currency Transaction Record (CTR)) etc. It also contains information from passports and green cards. B. The TRDB is accessed through the IDRS network using the command code TRDBV. This is the system of record for storing electronic filing (ELF) returns beginning with tax year (TY) 1999. C. This information will provide the field the ability to research this information on-line whenever needed.

9.4.4.2.1.2 (12-10-2007) The Business Master File
1. The BMF maintained on magnetic tape is a tax record of business taxpayers required by law and regulations to have employer identification numbers (EIN) as identifying account numbers. 2. The types of taxes processed to the BMF are limited to: A. Employment Taxes (Return Form 940) B. Withholding and Federal Insurance Contribution Act (FICA) Taxes (Return Form 941) C. Corporation Income Taxes (Return Form 1120) D. Excise Taxes (Return Form 720) E. Railroad Retirement Taxes (Return Form CT-1) F. Employment (Household) Taxes (Return Form 942)

Internal Revenue Manual - 9.4.4 Requests for Information

G. Employment (Agricultural) Taxes (Return Form 943) H. Corporation Income (Small Business) Taxes (Return Form 1120S) I. Fiduciary Income Taxes (Return Form 1041) J. Partnership Income Taxes (Return Form 1065) K. Foreign Corporation Income Tax Return (Return Form 1120F) L. Life Insurance Company Income Tax Return (Return Form 1120L) M. Mutual Insurance Company Income Tax Return (Return Form 1120M) N. Special Taxes (Return Form 11, 11B, 11C) O. Wagering Tax (Return Form 730) P. Estate Tax (Return Form 706) Q. Highway Use Taxes (Return Form 2290) R. Gift Taxes (Return Form 709) 3. In addition, tax returns of exempt organizations which have income from investments are processed on BMF.

9.4.4.2.1.3 (12-10-2007) The Individual Master File
1. The IMF is a magnetic tape record of all individual income tax filers, in social security number (SSN) sequence, and is maintained at the Martinsburg Computing Center. All tax data and related information pertaining to individual income taxpayers are posted to the IMF so that the file reflects a continuously updated and current record of each taxpayer’s account. All settlements with taxpayers are affected through computer processing of the IMF account and the data therein is used for accounting records, for issuance of refund checks, bills or notices, answering inquiries, classifying returns for audit, preparing reports and other matters concerned with the processing and enforcement activities of the IRS. 2. The returns filed include Income Tax Forms 1040, 1040A, 1040EZ, 1040NR, 1040C, 1040SS,

Internal Revenue Manual - 9.4.4 Requests for Information

1040PR, and Estimated Tax Returns 1040ES. Each taxpayer account has an entity module and one or more tax modules. The entity module contains data which describes the taxpayer as an entity and which applies to all records of the taxpayer. This entity module contains groups of data including name, address, etc. A tax module contains records of tax liability and accounting information pertaining to the income tax for one tax period. Each tax module contains groups of data including balance due amounts, refund checks sent, and other accounting information relating to a specific tax period.

9.4.4.2.1.4 (12-16-1998) Retention Register
1. The Retention Register contains all entity and tax modules removed from the master file. The basic criteria for removal of a tax module are: A. a zero module balance B. no freeze or unsettled conditions present C. no activity to the module for 27 months

9.4.4.2.1.5 (12-10-2007) Transcripts Defined
1. Transcript (computer generated) - A machine printout from the Martinsburg Computing Center that provides master file information on a particular taxpayer’s account. 2. Transcript (manually prepared) - A typed transcript from a Fraud Detection Center (FDC) of a taxpayer’s account that is extracted from microfilm or from the non-master file section of the IRS campus and maintains manual records related to controlled situations.

9.4.4.2.1.6 (12-10-2007) IRS Campus Records
1. There are 10 IRS campuses located across the country. For processing years after 2003 there will be a continual decline in the campuses that will process IMF returns. The Cincinnati and Ogden campuses process BMF returns. A FDC is co-located at each IRS campus. When a current year tax return is needed, review of the transcript for the particular returns document locator number (DLN) will indicate where the return can be located. 2. The FDC on the IRS campus will be the source of the court witness for criminal trials. The

Internal Revenue Manual - 9.4.4 Requests for Information

witness will testify on behalf of the Commissioner, in his/her role as the custodian of the records. The court witness coordinator at the FDC servicing the field office will be contacted to obtain the necessary information and certifications. If multiple centers are involved, this contact will be coordinated by the court witness coordinator for the requesting field office (see IRM 9.8.1, Fraud Detection Center).

9.4.4.2.1.7 (12-10-2007) Foreign Financial Transaction Forms
1. Foreign financial transaction forms are filed at various IRS campuses. The following is a list of the available forms, the location where such forms are to be filed and information on requesting the forms: A. Form 926, Return by a US Transferor of Property to a Foreign Corporation. This form is used to report excise tax on transfer of property by a United States person to a foreign partnership, trust or estate, or corporation. This form is a non-master file return and may be filed at any IRS campus. Therefore, requests for this form should be forwarded to the IRS campus where the taxpayer’s income tax return is required to be filed. B. Form 5471, Information Return of US Persons with Respect to Certain Foreign Corporations. This form is used by officers, directors, or United States shareholders in making annual information returns for foreign personal holding companies. This form is a non-master file return and is only filed at the Philadelphia Campus. (Form 957, US Information Return by an Officer, Director, or US Shareholder of a Foreign Personal Holding Company was obsolete beginning with tax year 1983 and was replaced by Form 5471). C. Form 1040 NR, US Nonresident Alien Income Tax Return. This form is used by all nonresident alien individuals, whether or not engaged in a trade or business within the United States, who file a United States tax return. Also required for filing nonresident alien fiduciary (estate and trusts) returns. This form is a master file return, which is only filed at the Philadelphia Campus. D. Form 1042, Annual Withholding Tax Return for US Source Income of Foreign Persons (Under Chapter 3, Internal Revenue Code). This form is used by withholding agents to report tax withheld at source on certain income paid to nonresident alien individuals, foreign partnerships, or corporations not engaged in trade or business in the United States. This form is a non-master file return, which is only filed at the Philadelphia Campus. E. Form 1042-S, Foreign Person's US Source Income Subject to Withholding. This form is used by a withholding agent to report certain income paid to non-resident alien individuals, foreign partnerships or corporations addressed in foreign countries. This is a non-master

Internal Revenue Manual - 9.4.4 Requests for Information

file return that is only filed at the Philadelphia Campus. These returns reflect income and withholding and are similar to Form W-2 and would not normally be requested or researched unless a Form 1042 were filed. F. Form 1120-F, US Income Tax Return of a Foreign Corporation. This form is used by foreign corporations to report income. This is a master file return which is required to be filed at the Philadelphia Campus. There is no master file designation to differentiate between Forms 1120 and 1120F. This requires that the actual return be obtained such that it can be determined whether or not the form relates to a foreign corporation. G. Form 3520, Annual Return to Report Transactions With Foreign Trusts and Receipt of Certain Foreign Gifts. This form is used by a grantor of an inter vivos trust, a fiduciary of an estate in the instance of a testamentary trust, a transferer on or before the 90th day after the creation of any foreign trust by a United States person or the transfer of any money or property to a foreign trust by a United States person. This form is required to be filed at the Philadelphia Campus. When the Form 3520 is filed, it is held for future association with the beneficiary’s Form 1040. Requests should be made to the appropriate IRS campus where the beneficiary’s Form 1040 is filed. Forms 3520 that cannot be associated with Forms 1040 are non-master file items maintained in alpha sequence at the Philadelphia Campus. H. Form 3520-A, Annual Return of Foreign Trust With a US Owner. This form is used to report foreign trust operations. The processing and requisitioning of this form is the same as Form 3520, above. I. Form 4683, US Information Return on Foreign Banks, Securities, and Other Financial Accounts, and Foreign Trusts. This form was replaced by Form 90-22.1 for the 1977 tax year. Previously, the Form 4683 was attached to Form 1040/1120. The Form can be secured from the IRS campus where the taxpayer’s Forms 1040/1120 were filed. J. Form 5335, Income Subject to Withholding Under Chapter 3, Internal Revenue Code as Reported on Form 1042-S. This form is issued by the Philadelphia Campus based upon the filing of Forms 1042-S and is furnished to foreign countries. K. Form R 82, Claim to refund of Swiss tax. This form is required to be filed at the Philadelphia Campus. 2. Except for Form 5335, it should be noted that the above mentioned forms can be requested in the normal requisition process via IDRS. When requesting any of the above forms, field offices should provide, to the extent possible, the taxpayer’s complete name, SSN/EIN, and address. If this identifying information is not available, the field offices should notify the FDC if entities with similar name controls or name variations should also be researched; i.e., John Doe Construction

Internal Revenue Manual - 9.4.4 Requests for Information

Company, Joe Doe & Sons Construction Company, or John Doe Construction Association. 3. If there are any questions concerning the above procedures, field offices may write the Resident Agent in Charge (RAC) at the Philadelphia Campus, PO Box 6068, Philadelphia, PA 19114, or call (215) 516-2406.

9.4.4.2.2 (12-10-2007) Social Security Administration
1. Regulations under the Social Security Act authorize the Social Security Administration (SSA) to disclose information to any officer or employee of the Department of the Treasury lawfully charged with the administration of Titles II, VIII, or IX of the Social Security Act; the Federal Insurance Contributions Act; the Self-Employment Act; or the Federal Unemployment Tax Act; or any Federal income tax law, for the purpose of such administration only. The regulations expressly forbid the further disclosure of such information and/or its use for any purpose other than the administration of the employment and income tax laws. 2. Form 2264, Request for Social Security Account Information, will be used when requesting the name and address of the latest reporting employer of a taxpayer from the records of the SSA. 3. Requests for itemization of quarterly earnings, which identify employers and amounts of wages taxable under the FICA, may also be made to the SSA when such information is needed in the administration of employment and income tax laws. Requests of this type will be made by letter stating that the information is to be used for official purposes of an employment or income tax matter and shall identify the period or periods for which an itemization of quarterly earnings is requested. 4. "IRS-CRIMINAL INVESTIGATION" will be labeled before the body of the letter and should be mailed directly to the Social Security Administration, Mail and Work Distribution Section, Lower Basement, Metrowest Bldg., 300 North Greene Street, Baltimore, MD 21201. All envelopes should be marked DO NOT OPEN IN MAILROOM. 5. If the information is to be presented during legal proceedings, the SSA will be requested to certify the information. However, information so obtained should be used primarily as leads in conducting investigations, and only where such information cannot be documented from any other source should the special agent propose in his/her report that the SSA records be used as evidence in court. 6. Special agents will not attempt to obtain information (except information concerning the payment of benefits) from SSA field establishments.

Internal Revenue Manual - 9.4.4 Requests for Information

9.4.4.2.3 (12-10-2007) Department of Labor
1. The Labor-Management Reporting and Disclosure Act requires various Labor-Management reports to be filed with the Department of Labor. Copies of these reports may be inspected at the Department of Labor's Office of Labor-Management in Washington, DC or at its area offices covering the geographic localities where the persons or organizations filing the reports have their principle places of business. These reports include: A. Every labor organization engaged in an industry affecting commerce must file an annual financial report with the Secretary of Labor on Form LM-2 or LM-3. B. A report (Form LM-10) from every employer who makes or agrees to make any payment or loan, including reimbursed expenses, to any labor organization, labor relations consultant, or any union officer or employee; and a report (Form LM-30) from every labor organization officer or employee who receives payments from an employer is also required. C. Every labor relations consultant is required to file an annual Agreement and Activities Report (Form LM-20) detailing the specific activities he/she is engaged in; and a Receipts and Disbursements Report (Form LM-21) showing receipts from all employers for labor relations advice or services and all disbursements by the consultant in connection with such activities. Legal fees received by an attorney in connection with labor relations, legal representation, litigation, or advice are excluded from these reporting requirements. 2. The Welfare and Pension Disclosure Act directs that the administrator of an employee welfare or pension plan file with the Secretary of Labor a plan description (Form D-1) setting forth the plan benefits and other specified data. Plan administrators are also required to file an annual financial report (Form D-2) that indicates the amounts contributed by each employer and by the employees'; the amount of benefits paid; the number of employees covered; and includes a statement of assets; liabilities; receipts; and disbursements. Copies of reports filed under the Welfare and Pension Disclosure Act are available for inspection only at the Department of Labor in Washington, DC. 3. Special agents are encouraged to search the Department of Labor Web page for the location of Department of Labor offices and services.

9.4.4.2.4 (12-10-2007) State Department
1. Requests for information from the Department of State will be made directly to the Director,

Internal Revenue Manual - 9.4.4 Requests for Information

International (CI:OPS:I), who will submit it through official channels to the Department of State. Each request should include the individual’s name, date, place of birth, and, if known, SSN, passport number, and the date the passport was issued. A minimum of 30 days is needed to process all requests. 2. Passport records available include a copy of the application submitted for a passport and an original photograph. In instances where an individual has formally renounced his/her United States citizenship, a certificate of loss of nationality can be requested. 3. The Department of State does not maintain information regarding the individual’s points of travel to and from the United States. Expired passports are returned to the holder unless there are indications that the passport has been altered at the time a new passport is issued.

9.4.4.2.5 (12-10-2007) Securities and Exchange Commission
1. The Securities and Exchange Commission (SEC) has established special procedures for special agents to follow in requesting information. These procedures must be followed in administrative investigations and should be followed whenever possible in grand jury investigations. 2. Special agents are encouraged to search the SEC Web site where SEC information is immediately available. Among others, the following can be found on the Web page: A. SEC Contacts B. Filings and Forms (EDGAR search) C. Investor information D. News and Public Statements E. SEC Divisions

9.4.4.2.5.1 (12-10-2007) Securities and Exchange Commission Files
1. List of Broker-Dealers. This file contains identification of all broker-dealers (present and past) who at any time registered with the Commission. Such information includes the name and mailing address of each person or entity, the type of organization, and the effective registration date. An application and background file is available for each entity. Also included is a detailed

Internal Revenue Manual - 9.4.4 Requests for Information

disciplinary activity or criminal history record if such information is applicable to the entity. 2. Registration Information on Investment Advisors and Companies. This file contains similar information on all investment advisors, whether individuals or other entities. 3. Information from the SEC may be obtained by telephone from the Office of the Assistant Administrator (Enforcement) and the Office of the Assistant Administrator (Regulation) at the appropriate SEC Regional Office. In SEC terminology the requester should specifically ask for SEC records and a "CRD" printout. The CRD is the acronym for the Central Registration Depository of the National Association of Security Dealers (NASD). The NASD is another potential source of information. See the FINRA Web site (created in 2007 with consolidated NASD and NYSE information). 4. These files may also contain investigatory or enforcement information not available to the public but available to an identified Federal law enforcement officer for law enforcement purposes. Enforcement or investigative files may contain: A. corporate documents B. documents from third-party sources C. witness statements D. other appropriate investigatory material 5. To obtain such information (verbally) the special agent should telephone the nearest SEC regional office.

Note:
Since the SEC has both a Regulation Division and an Enforcement Division, and each has information which may not be available to the other, it is advisable to call both divisions in the SEC regional office. 6. If a hard copy of "non-public" information is needed, an access request must be filed with SEC.

9.4.4.2.5.2 (12-10-2007) Securities and Exchange Commission Publications
1. The SEC News Digest contains daily summaries of civil, criminal, and administrative actions initiated by the Enforcement Division, as well as other items of interest to the securities industry.

Internal Revenue Manual - 9.4.4 Requests for Information

The SEC Weekly Docket is a weekly summary of items that appeared in the daily Digests. The News Digests are found under the News and Public Statements on the SEC Web site. 2. Quarterly SEC Securities Violations Bulletin lists all enforcement actions completed by the Commission for the preceding quarter. These include identification of all civil, criminal, and administrative proceedings such as suspension or revocation of registrations, cease and desist orders, indictments, convictions, and imposition of sentences. This publication is available by subscription for a fee. Information can be obtained from SEC Publications.

9.4.4.2.5.3 (12-10-2007) Securities Information Center
1. The Securities Information Center (SIC) is operated under contract with the SEC. All banks, brokerage houses, etc., that receive bad securities are required to report this information to the SIC. They are also required to run a check with the SIC if they receive $10,000 or more in securities.

9.4.4.2.5.4 (12-10-2007) Other Information Available from Securities and Exchange Commission Regional Offices
1. Other information available from the SEC's regional offices includes the following corporate filings: A. Form 10-Q, Quarterly corporate financial report. B. Form 10-K, Annual corporate financial report. C. Form 8-K, Monthly corporate report made upon the occurrence of various key events such as: change in control of registrant; change in registrant’s certifying accountant; and other materially important events. D. Form 8, Form used to amend other corporate filings. E. Form 13(d), Filed by stockholders who hold five percent or more interest. It should identify acquisition, show where money came from and how ownership interest changed.

9.4.4.2.6 (12-10-2007) Department of Transportation

Internal Revenue Manual - 9.4.4 Requests for Information

1. The Department of Transportation (DOT) agencies and their respective authority is available on the DOT Web site. 2. If it is necessary for a special agent to have access to information or review the DOT files, a request for such information should be forwarded from the Supervisory Special Agent (SSA) to the appropriate DOT administrator.

9.4.4.2.6.1 (12-10-2007) Federal Aviation Administration
1. The Federal Aviation Administration (FAA) maintains detailed and comprehensive records covering nearly all aspects of the civilian aviation industry. Among the files maintained are the Aircraft Register and the Airman Directory. Information includes, but is not limited to, records pertaining to pilots, navigators, crew members, repairmen, flight instructors, control tower operators, parachute riggers (i.e., virtually any licensed individual connected with the industry). Aircraft records include such diverse information as tail numbers, airworthiness certifications, physical modifications, current and previous owners, and lienholders. Preliminary or general inquiries regarding FAA data may be made to the Investigation Branch, Law Enforcement Liaison at (405) 954-3784. Listed below is the information most generally utilized. 2. The following information is available on aircraft and is accessible by name of owner or serial number, also commonly known as the " N" number. Requests for information by name of owner should include the individual’s SSN and date of birth: A. current registered owner B. address of registered owner C. last date of registration D. date last sold E. previous owner F. serial number G. make and model H. mortgage information I. modifications to the aircraft

Internal Revenue Manual - 9.4.4 Requests for Information

J. total history of the aircraft

Note:
The FAA file may also include the bill of sale, transfer agreement, chattel mortgage and airworthiness information. 3. The following information is available on licensed pilots and can be accessed by name and date of birth, SSN or certificate number. (Files can be flagged so that any activity on the file will be reported to the requesting agency; however, such requests must be in writing): A. SSN. B. Date and place of birth. C. Physical description. D. Last known address, date address received and source of the address. E. Types of ratings and levels. F. Certificate number and date issued. G. Information from medical records.

Note:
Medical form; occupation; employer; military service number; accident information (within last two years); medical history; traffic and other convictions; class of medical examination. H. Additional documents that may be contained in the file are the Temporary Airman Certificate, application for Airman Certificate, written test report, notice of Disapproval of Application and Airman Records Notice. 4. Information can be obtained from the FAA as follows: A. For requests requiring no written response or documentation, a telephone request may be made to the Investigations Branch, Law Enforcement Liaison at (405) 954-3784 (24

Internal Revenue Manual - 9.4.4 Requests for Information

hours). B. For written or certified responses, or requests requiring detailed research, written requests should be sent to the Federal Aviation Administration, Civil Aviation Security Division AMC-730, PO Box 25082, Oklahoma City, OK 73125-4937. 5. The following public information and/or listings are available on microfiche pursuant to a written request to the Office of Information Services, Application Systems Division AMI-200, PO Box 25082, Oklahoma City, OK 73125-4937, Attention: Airman and Aircraft Team Manager. A. United States Civil Aircraft Register by Number B. Alphabetical Listing of Aircraft Registrants C. State and County List of Aircraft Registrants D. Aircraft Manufacturer and Model List E. United States Civil Aircraft Register by Serial Number F. Aircraft Reference File in Make/Model Series G. Engine Reference File 6. The Aircraft Registration Master File and Airman Directory is available on magnetic tape and can be obtained from Aerodata, 260 Bellevue Drive, Boulder, CO 80302. This information is furnished without charge to government agencies but tapes must be provided. Further details regarding available information, tape specifications, and data fields may be obtained by contacting Aerodata at the above-stated telephone number. 7. Some aircraft information is also available from the El Paso Intelligence Center.

9.4.4.2.7 (12-10-2007) Department of the Treasury
1. Information regarding the agencies of the Department of the Treasury and each agency's respective authority is available on the Treasury Web site at http://treasury.gov.

9.4.4.2.7.1 (12-10-2007) Comptroller of Currency (Bank Examiners’ Reports)

Internal Revenue Manual - 9.4.4 Requests for Information

1. National bank examinations determine a bank's financial position and evaluates its assets. Bank examiners’ reports contain information about a bank's records, loans, and operations. If a special agent needs information contained in a bank examiner’s report, the request will be submitted through channels to the Chief, CI, ATTN: Director, Operations Policy and Support (CI:OPS). The request should set forth the subject’s name and address, the information desired, the reason it is needed, and the intended use. Headquarters will transmit the request to the Comptroller of the Currency.

9.4.4.2.7.2 (12-10-2007) Financial Management Services
1. The Financial Management Service (FMS) receives and disburses all public monies, maintains government accounts, and prepares daily and monthly reports on the status of government finances with the exception of the US Postal Service and the disbursing offices of the military services. The Financial Management Service maintains copies of paid vouchers and check listings, direct deposit listings, or other records which identify each check issued for goods or services. In addition, the Regional Disbursing Officers, Bureau of Accounts, US Treasury, microfilm all checks prior to issuance. All canceled US government checks, from whatever source issued, are processed by the Office of the Treasurer of the United States.

9.4.4.2.7.3 (12-10-2007) Refund Checks
1. The field office requesting a photocopy of a refund check should contact the RAC of the FDC which services the requesting field office. The request should include the name of payee, the payee’s SSN or EIN, the period and type of tax, and the amount of the check. Original US Treasury checks may be obtained if needed for handwriting or forensic analysis. The special agent will contact the nearest US Secret Service (USSS) field office or resident agent and complete USSS Form (SSF) 1600. If the check is being considered for use in a trial or a procedure requiring certification, the request for certification should be included in the request.

9.4.4.2.7.4 (12-10-2007) United States Treasury Checks Issued for United States Government Agencies
1. Photocopies of US Treasury checks have to be obtained by initiating a request through the US government agency which authorized the check. 2. Original US Treasury checks may be obtained if needed for handwriting or forensic analysis. The special agent should contact the nearest USSS field office or resident agent and complete USSS

Internal Revenue Manual - 9.4.4 Requests for Information

Form (SSF) 1600. 3. The original check(s) will be forwarded to the requesting special agent through the appropriate USSS field office or resident agency. When the original check is no longer needed, it should be returned to the USSS, Washington Field Office (Forgery Operations), 1800 G Street, NW, Washington, DC 20223.

9.4.4.2.7.5 (12-10-2007) Bureau of the Public Debt
1. Records of any US Savings Bonds that have been purchased and redeemed should be addressed to: A. Bureau of the Public Debt, Division of Customer Assistance, PO Box 7015, Parkersburg, WV 26106 (for Treasury Direct US Savings Bonds Series EE and I) B. Bureau of the Public Debt, Division of Customer Assistance, PO Box 7012, Parkersburg, WV 26106 (for Paper Savings Bonds Series EE and I) C. Bureau of the Public Debt, Division of Customer Assistance, PO Box 2186, Parkersburg, WV 2610 (for Series HH/H) 2. The request should contain the following information: A. complete name B. all addresses, including street and number, city and state, which may be shown on the inscription on the bonds, along with the number of years the subject lived at each address C. subject’s SSN D. years in which the bonds may have been issued E. series of bonds which may have been purchased

9.4.4.2.7.6 (12-10-2007) Mutilated Currency Reports
1. The Office of Currency Standards, Bureau of Engraving and Printing, will notify the Special Agent in Charge (SAC) when a person presents $5,000 or more of mutilated currency for

Internal Revenue Manual - 9.4.4 Requests for Information

redemption. The Director, CI:OPS will immediately refer the information to the SAC in the field office in which the person requesting the currency redemption resides. The Office of Currency Standards will withhold payment in such instances for a period of 30 days from date of notification so that the IRS can determine whether further withholding of payment is desired. 2. A mutilated currency report will be screened to determine whether preliminary inquiries should be undertaken by the special agent or whether the information should be forwarded to the appropriate exam or collection functions within the other operating divisions. Care should be taken that the collection function is informed of the report immediately upon its receipt so that they may exercise any right of offset for outstanding assessment against the taxpayer involved. The FDC and/or the Martinsburg Computer Center should be notified if a valid SSN is available. 3. It is not contemplated that CI will request the Office of Currency Standards to withhold payment of mutilated currency beyond the original 30-day period except in rare or unusual instances. Such instances will generally involve a jeopardy assessment situation where time is an element. Where it is determined that such an unusual situation exists, the SAC with the concurrence of the Director, Field Operations, will notify the Director, CI:OPS immediately so that the Office of Currency Standards may be advised accordingly. If at the time of screening there is no apparent CI or civil potential in the matter, it may be closed to file without further action or disposed of as would any information item. No report needs to be submitted to the Director, CI:OPS if it is determined that payment should not be withheld. 4. When a special agent has information which indicates that a taxpayer has presented mutilated currency for redemption in an amount less than $5,000, the special agent should prepare a request for the Office of Currency Standards to search their files. The request will be in the name of the SAC and mailed directly to: Department of the Treasury Bureau of Engraving and Printing OCS, Room 344, BEPA PO Box 37048, Washington, DC 20013. 5. The request should contain the following information if it is available: A. subject's name and full address B. amount of the redemption C. approximate date the currency was presented for redemption D. name of the bank where the currency was presented for redemption

9.4.4.2.7.7 (12-10-2007)

Internal Revenue Manual - 9.4.4 Requests for Information

Financial Crimes Enforcement Network
1. The Financial Crimes Enforcement Network (FinCEN) is a multi-agency, multi-source intelligence network. Established in April 1990, pursuant to an order of the Secretary of the Treasury, FinCEN was designed to support Federal, state and local law enforcement agencies in the detection and investigation of narcotics and non-narcotics money laundering, as well as other financial crimes. 2. On October 24, 2001, Section 361 of the USA Patriot Act (H.R.3162) established FinCEN as a Bureau in the Department of Treasury. FinCEN serves and exchanges information with virtually every class of law enforcement, regulatory and intelligence organization. FinCEN was not created to replace traditional methods of uncovering criminal activity such as the use of informants, surveillance, etc., but was created to supplement those efforts by serving as a central source of financial information and intelligence. FinCEN's unique staffing both reflects and sustains its mission. IRS-CI currently has one special agent assigned as a liaison to FinCEN whose job is to assist CI personnel with their investigations. 3. The mission of FinCEN is to safeguard the financial system from the abuses of financial crime, including terrorist financing, money laundering, and other illicit activity. This mission is achieved by: A. Administering the Bank Secrecy Act B. Supporting law enforcement, intelligence, and regulatory agencies through sharing and analysis of financial intelligence C. Building global cooperation with our counterpart financial intelligence units D. Networking people, ideas, and information 4. Requests for investigative assistance from FinCEN fall into three broad categories: A. Research and analytical support B. Financial Intelligence Unit assistance C. Sharing of information with financial institutions under the USA Patriot Act Section 314(a) 5. The CI Liaison to FinCEN can provide additional information regarding exactly what assistance is available from FinCEN.

Internal Revenue Manual - 9.4.4 Requests for Information

6. FinCEN has access to databases in three categories: Bank Secrecy Act (currently contained in CBRS), law enforcement, and commercial. FinCEN will conduct searches of the databases upon request from Federal, state and local agencies. FinCEN will not conduct research on databases to which the requesting agency already has access. 7. FinCEN will provide analytical assistance in major investigations where they can add value to the investigation. 8. When assistance from FinCEN is requested, they will attempt to network the requesting agent with other agencies who may also have an interest in the same subject. If the subject of a request is identified as part of an active or closed investigation by another agency, FinCEN will contact both agencies for approval to network. Upon approval form both agencies, FinCEN will provide agency information. Both agencies must agree to network before either agency is identified. 9. The FinCEN Request For Research can be found on document manager by searching for "FinCEN." 10. FinCEN is designated as a Financial Intelligence Unit (FIU) and is part of the Egmont Group of FIUs. The Egmont group is a global association of operational units working bilaterally. The Egmont Group is an international network of 94 countries that have implemented national centers to collect information on suspicious or unusual financial activity from the financial industry, to analyze the data, and to make it available to appropriate national authorities and other FIUs for use in combating terrorist funding and other financial crime. 11. Requests for information from FIUs can be made through FinCEN. The information provided by an FIU varies by country but could include public, law enforcement and financial information. The information provided by an FIU can only be used for lead purposes. If the agent wants to use the information in court proceedings, the FIU request must be followed by a Mutual Legal Assistance Treaty (MLAT) request. 12. The FIU request can be found on document manager by searching for "FinCEN" . The request should be forwarded to the CI Liaison to FinCEN for processing. 13. Section 314(a) of the USA Patriot Act of 2001 (P.L.107-56), required the Secretary of the Treasury to adopt regulations to encourage regulatory authorities and law enforcement authorities to share with financial institutions information regarding individuals, entities, and organizations engaged in or reasonably suspected, based on credible evidence, of engaging in terrorist acts or money laundering activities. 14. This regulation enables Federal law enforcement agencies, through FinCEN, to reach out to 41,331 points of contact at more than 25,000 financial institutions in an effort to locate accounts and transactions belonging to persons who may be involved in terrorism or money laundering.

Internal Revenue Manual - 9.4.4 Requests for Information

15. FinCEN receives requests from Federal law enforcement agencies and, after review, transmits those requests to designated contacts within financial institutions across the country once every two weeks. The requests contain subject and business names, addresses, and as much identifying data as possible to assist the financial industry in searching their records. The financial institutions are then required to query their records for data matches, including accounts maintained by the named subject during the preceding 12 months and transactions conduced within the last 6 months. Financial institutions have 2 weeks from the transmission date of the request to respond to a 314(a) Subject Information form. The form requires a financial institution to place only a "X" next to that particular named subject if a match was found, and to provide point-of-contact information. If the search does not uncover any matching of accounts or transactions, the financial institution is instructed not to reply to the 314(a) request. 16. The 314(a) request should only be used in terrorism or significant money laundering investigations. The requesting agency must certify that all traditional means of investigation have been exhausted before submitting a 314(a) request. Because of the sensitivity of this tool, the approval of the SAC is required before any such request can be made. 17. The information provided by the financial institution is lead information only and must be followed by a subpoena or other legal process. 18. The USA Patriot Act 314(a) request can be found on document manager by searching for "FinCEN" . The request requires two documents, a Certification form and a Subject Information form. The request should be forwarded to the CI Liaison for processing.

9.4.4.2.8 (12-10-2007) Department of Homeland Security
1. The Department of Homeland Security (DHS) information is available on the DHS Web site.

9.4.4.2.8.1 (12-10-2007) Customs and Border Protection
1. The US Customs and Border Protection (CBP) consists of the following enforcement agencies: A. Border Patrol – uniformed border enforcement arm of DHS B. Bureau of Immigration and Customs Enforcement (ICE) – investigative arms of the former US Customs Service, Immigration and Naturalization Service and Federal Protective Service

Internal Revenue Manual - 9.4.4 Requests for Information

2. The CBP has authorized Directors at Headquarters (HQ) Ports to furnish IRS officials with information from CBP records, such as owners’ declarations, manifests and other documents relating to the importation of taxable articles. The CBP officials are instructed to immediately forward to Customs for consideration all IRS requests for information not covered by prior authorizations. Information obtained from CBP will be treated as being of a confidential nature. 3. Any person who physically transports, mails, ships, or causes to be transported, currency or other monetary instruments of more than $10,000 at any one time, from or into the United States, shall file a report, FinCEN Form 105 (formerly US Customs Form 4790), Currency or Monetary Instruments Report (CMIR). 4. Any person who receives in the US currency or monetary instruments of more than $10,000 at any one time, from outside of the United States, and where a report has not been filed under 31 USC §103.23(a), shall file a Form 105, Report of International Transportation of Currency or Monetary Instrument.

9.4.4.2.8.2 (12-10-2007) United States Citizenship and Immigration Services
1. The United States of Citizenship and Immigration Service (USCIS) administers immigrant and nonimmigrant sponsorship; adjustment of status; work authorization and other permits; naturalization of qualified applicants for United States citizenship; and asylum or refugee processing. Immigration enforcement, which is the responsibility of the Directorate of Border and Transportation Security, includes preventing aliens from entering the country unlawfully, detecting and removing those who are living in the United States unlawfully, and preventing terrorists and other criminal aliens from entering or residing in the United States. 2. The agency's records include: A. names and other information concerning immigrants and aliens B. lists of passengers and crews on vessels from foreign ports C. passenger manifests and declarations-ship, date, and point of entry required D. names of witnesses to naturalization proceedings and people who know the suspect E. deportation proceedings F. financial statements of aliens and persons sponsoring their entry

Internal Revenue Manual - 9.4.4 Requests for Information

9.4.4.2.8.3 (12-10-2007) United States Coast Guard
1. The US Coast Guard retains records of persons serving on US ships in any capacity, including records of vessels equipped with permanently installed motors or of vessels over 16 feet equipped with detachable motors.

9.4.4.2.8.4 (12-10-2007) Secret Service Records
1. The US Secret Service records include records pertaining to counterfeit and forgery investigations, and records pertaining to anonymous letters and background files on persons who write "crank" letters.

9.4.4.2.8.5 (12-10-2007) Treasury Enforcement and Communication System
1. Treasury Enforcement and Communication System (TECS) is a computerized information system designed to identify individuals and businesses suspected of or involved in violations of Federal law. The TECS provides access to the Federal Bureau of Investigation (FBI), National Crime Information Center (NCIC), and the National Law Enforcement Telecommunication Systems (NLETS) with the capability of communicating directly with state and local enforcement agencies. The NLETS provides direct access to state motor vehicle departments. 2. To access TECS, the user must request access through his/her SSA. The System Control Officer (SCO) in their field office will then establish a User Profile Record on TECS. The user will be required to take an on-line Security/Privacy Awareness Course and a NCIC test. Instructions will be provided by the user's SCO. The user must retake these tests every two years for recertification.

9.4.4.2.8.5.1 (12-10-2007) Requesting TECS Information
1. The TECS inquiries can be made from the field office that has TECS capabilities. Inquiries can only be made by those CI employees having access to the system and should be made on a needto-know basis only. 2. In instances of an equipment failure at a field office, requests to the RAC, at the FDC, for TECS queries may be made by memorandum, by use of Form 5523 TECS Query Request, by fax, or by telephone. The RAC, at the FDC, will not release TECS information requested by telephone until

Internal Revenue Manual - 9.4.4 Requests for Information

he/she is satisfied as to the identity of the caller (such as telephone call back).

9.4.4.2.8.5.2 (12-10-2007) Witnesses to Testify Regarding Filings of Currency Banking Retrieval System Forms
1. Requests for witnesses to testify as to the filing of CTRs, CTRs by Casinos, Report of Foreign Bank & Financial Accounts (FBARs), and Forms 8300 should be made to the IRS Detroit Computing Center, Attn: CI Representative, 985 Michigan Ave., Detroit, MI 48226. 2. All CTRs, CTRs by Casinos, FBARs, and Forms 8300 are processed by the Detroit Computing Center and are indexed on the Currency & Banking Reporting System (CBRS) and, with the exception of Forms 8300, are indexed in TECS. Currency & Banking Retrieval System and TECS should be queried to determine if CTRs, CTRs by Casinos, FBARs, and Forms 8300 were filed for reportable transactions. However, access to Forms 8300 is bound by 26 USC §6103 rules of nondisclosure.

Note:
There is a dual filing requirement for Form 8300 under 26 USC §6050I and 31 USC §5331. Disclosure provisions after January 1, 2002, follow the type of investigation being conducted, Title 31 or Title 26 (see IRM 9.3.1, Disclosure.)

9.4.4.2.9 (12-10-2007) Department of Justice
1. The Department of Justice (DOJ) information is available on the DOJ Web site.

9.4.4.2.9.1 (12-10-2007) Bureau of Alcohol, Tobacco, Firearms, & Explosive Records
1. Bureau of Alcohol, Tobacco, Firearms (ATF) records which may be of interest to CI are: A. records of distillers, brewers, and persons or firms who manufacture or handle alcohol as a sideline or main product B. record of inventory of retail liquor dealers and names of suppliers, as well as amounts of liquor purchased by brand

Internal Revenue Manual - 9.4.4 Requests for Information

C. names and records of known bootleggers D. reports of investigations E. records of firearms registration (alphabetical and numerical)

Note:
Requests for firearm trace histories and intelligence information should be made to the nearest local ATF Office. 2. The ATF should be requested to trace the history of all firearms which may have been accidentally or criminally misused and which come to the attention of CI either during or subsequent to an investigation. A detailed trace history on each firearm requested and any intelligence information that may be of benefit to CI will be made available by the ATF training center upon request.

9.4.4.2.9.2 (12-10-2007) Federal Bureau of Investigation Records
1. Federal Bureau of Investigation (FBI) records include: A. criminal records and fingerprints B. national stolen property index-government property stolen, including military property C. nonrestricted information pertaining to criminal offenses D. national fraudulent check index E. anonymous letter index

9.4.4.2.9.3 (12-10-2007) Drug Enforcement Administration Records
1. Drug Enforcement Administration (DEA) records include information on licensed handlers of narcotics and also criminal records of users, pushers, and suppliers of narcotics.

9.4.4.2.9.4 (12-10-2007)

Internal Revenue Manual - 9.4.4 Requests for Information

El Paso Intelligence Center
1. The El Paso Intelligence Center (EPIC) is an agency of DEA. It is a multi-agency operation that collects, processes and disseminates information in support of field investigations. Participating agencies include the Drug Enforcement Administration; IRS-CI; US Immigration and Customs Enforcement; US Customs and Border Protection; United States Coast Guard; FBI; US Marshals Service; Bureau of Alcohol, Tobacco, Firearms; FAA; Transportation Security Administration; US Secret Service; Department of Interior; Department of Defense; National Security Agency; Texas Army National Guard; Texas Department of Public Safety; and the Federal Highway Administration. In addition, EPIC has signed agreements with state and local agencies in all 50 states. 2. The mission of EPIC is to disseminate intelligence on illicit drug and alien movements and the criminal organizations of those responsible for such illegal activities. Watch officers process requests by accessing law enforcement systems and a number of commercial databases. 3. Watch officers have 24/7 access to agency records for conducting inquiries on persons, vehicles, aircraft, vessels, businesses, addresses, and telephone numbers. Inquiries are normally handled by telephone or facsimile. The following are examples of information EPIC is able to provide: A. subjects of record in Narcotics & Dangerous Drugs Information System (NADDIS), Treasury Enforcement Communication System (TECS), US Bureau of Prisons Federal Prisoner Database (SENTRY), Citizenship and Immigration Services (CIS), EPIC Seizure System (ESS), Federal Aviation Administration (FAA), B. vehicle or person entering the United States through a port of entry within the last 20 years, as well as the port of entry C. private aircraft inspected on entering United States, as well as where, when, and occupants D. person inspected on entering the United States aboard a commercial aircraft or commercial vessel, as well as where and when E. aircraft flight plan originating or terminating in the United States, as well as movement F. vessel sighted or boarded, as well as activities or registration G. legal or illegal aliens H. persons previously incarcerated in Federal prisons

Internal Revenue Manual - 9.4.4 Requests for Information

I. persons previously holding fraudulent birth or citizenship identities 4. The Research and Analysis section includes Domestic/Asset Forfeiture, Alien Smuggling, Trend Analysis, and Southwest Border Units. Augmenting the "Watch" capabilities, EPIC provides analyses of drug movement, events, trends and patterns, and research on criminal organizations. 5. All EPIC inquiries should include: A. requesting special agent’s name and phone number B. synopsis of investigation C. all available identifying information 6. Other EPIC contacts include: A. EPIC toll-free number -- 1-888-873-3742; 1-888-USE-EPIC B. Watch Operations Section Inquiries and Lookouts -- 1-800-351-6047; State and Local Liaison Unit --1-800-927-0468 C. Research and Analyst Section Operation Jetway --1-800-487-0472 D. Commercial General Watch -- (915) 760-2200 Maritime Watch -- (915) 760-2240 Air Watch -- (915) 760-2227 Research & Analysis -- (915) 760-2301 Fraudulent Documents -- (915) 760-2200 Alien Intelligence -- (915) 760-2366 State & Local Liaison -- (915) 760-2490 Communications Center, Voice -- (915) 760-2103; Fax -- (915) 760-2102; Secure Fax -(915) 760-2538 E. Clan Lab Help Desk -- 1-888- 873-3742 Option #7; or (915) 760-2148 F. HIDTA/CLSS -- (915) 760-2724 G. Teletype -Nlets - Txdea08S0_ TECS II - EPIC Just - Jepic Autodin - Rueabne EPIC El Paso TX 7. Other major systems which may be accessed through the " Watch" include DEA’s NADDIS, the

Internal Revenue Manual - 9.4.4 Requests for Information

Bureau of Prisons " Sentry" System (which covers subjects who have been incarcerated in the Federal prison system at anytime since 1980), and the Immigration and Customs Enforcement's Integrated Combined Systems (ICS). The ICE systems include: A. Index of various schemes involving fraudulent documents and false claims to US citizenship B. Central Index System (CIS) C. Non-Immigrant Info System (NIIS) D. Student School System (STSC) 8. Inquiries of EPIC should be directed to the "Watch" at (915) 760-2200. The "Watch" will be provided with the special agent’s title, name and agency. In order to protect the integrity of EPIC information, IRS provides EPIC an alphabetical listing of special agents, updated every three months. The requesting special agent’s name must appear on this list before EPIC will respond to the inquiry. No more than four inquiries (names, aircraft, vessels, or combinations thereof) should be directed to the "Watch" at one time. Special agents with voluminous requests should call the IRS Representative at (915) 760-2000, if the request is urgent, or submit the request in writing to the IRS Representative at the following address: El Paso Intelligence Center; Bldg. 11339; SSG Sims Street; El Paso, TX, 79908-8098; Attn.: IRS Representative (915) 760-2025; (915) 760-2513 (fax).

Note:
Information requests are limited to narcotics-related investigations. 9. All inquiries of EPIC should include: A. requesting agent’s name and FTS or commercial phone number B. a synopsis of the investigation C. if the request is for information on an individual, the request should contain all available identifying information

9.4.4.2.10 (12-10-2007) US Postal Service
1. The US Postal Service (USPS) information is available on their Web site.

Internal Revenue Manual - 9.4.4 Requests for Information

9.4.4.2.10.1 (12-10-2007) Postal Service Records
1. For updated Postal Tracer information please refer to IRM 5.1.18, Locating Tax Payers.

9.4.4.2.10.2 (12-10-2007) Postal Money Orders
1. To obtain information or photostats of postal money orders, where either the IRS or the Department of the Treasury is the payee or purchaser, the request will be addressed directly to Money Order Division, Postal Computing Center, PO Box 14965, St. Louis, Missouri, 63182 and will bear the signature of the SAC. Requests for copies of postal money orders which were purchased by and payable to any other entities must be made through the local US Postal Inspection Service office, and must bear the signature of the SAC.

9.4.4.2.11 (12-10-2007) Department of Defense
1. Department of Defense (DOD) data concerning the pay, dependents, allotment accounts, soldier’s deposits, withholding statements (Forms W-2), and any other financial information relative to military personnel is available at one of the following offices, depending upon the branch of the Armed Forces to which the individual was or is presently attached: A. Army: United States Army Finance Center Indianapolis, 46249. Request to include: complete name and Army serial number. B. Air Force: Air Force Finance Center RPTP, Denver, Colorado 80279. C. Navy: Director, Bureau of Supplies and Accounts Department of the Navy; 13th and Euclid Streets Cleveland, Ohio 44115. Requests should be forwarded through normal channels to the Director, Field Operations for the area in which the respective finance center is located. 2. Addresses of military personnel: A. Request for Address of Military Personnel, Form 2223 should be used to obtain from the records of the military services the current or last known address of a subject who is a member of, or who has been recently separated from, the Armed Forces.

Internal Revenue Manual - 9.4.4 Requests for Information

B. Data concerning the personal and medical history of former Armed Forces personnel are located at: Military Personnel Records Center, GSA, 9700 Page Boulevard, St. Louis, Missouri 63132. C. Records of contracts and all original vouchers covering payments made to persons and firms dealing with the US Air Force are retained at: US Air Force Accounting and Finance Center, AFO-Accounts and Mail Branch RPTP, Denver, Colorado 80279. Normally, requests for such information should be made by collateral to the Denver field office.

9.4.4.2.11.1 (12-10-2007) Defense Investigative Service
1. Defense Investigative Service (DIS) records include case files of individuals who have undergone investigation, both criminal and background, by the Army (Intelligence, CI, etc), Navy (Naval Criminal Investigative Service (NCIS), etc.), Air Force (Air Force Special Investigations Office (AFSIO), etc.) and the Department of Defense. Requests for information from DIS files should be forwarded to the Chief, CI, Attn.: CI:OPS.

9.4.4.2.12 (12-10-2007) Department of Housing and Urban Development
1. Department of Housing and Urban Development (HUD) information is available on the HUD Web site.

9.4.4.2.12.1 (12-10-2007) Federal Housing Administration
1. Federal Housing Administration (FHA) retains records of applicants’ complete financial information, including statements of net worth and earnings.

9.4.4.2.13 (12-10-2007) Department of Veteran Affairs
1. The Department of Veteran Affairs (VA) maintains records of loans, tuition payments, insurance payments and nonrestrictive medical data related to disability pensions. This information, may be obtained by direct mail request to the appropriate regional office. All requests will include a statement covering the need and intended use of the information. The veteran should be clearly identified and, if available, his/her following information should also be provided: VA claim number, date of birth, branch of service, and dates of enlistment and discharge.

Internal Revenue Manual - 9.4.4 Requests for Information

9.4.4.2.14 (12-10-2007) Federal Court
1. Federal court records can provide a valuable source of information provided the information is not sealed. Such information may include: records of civil and criminal cases, including bankruptcies; records of parole and probation officers; and records of the US Marshal and US Magistrate.

9.4.4.2.15 (12-10-2007) National Archives and Records Administration
1. The National Archives and Records Administration (NARA) is the government authority for records management. Information on NARA can be found on the NARA Web site.

9.4.4.2.15.1 (12-10-2007) Federal Records Center
1. Data concerning former government employees are on file at the Federal Records Center (FRC), GSA (Civilian Personnel Records), 111 Winnebago Street, St. Louis, MO 63118. Requests for information from such files will be prepared on GSA Standard Form 127, Request for Official Personnel Folder, and mailed directly to the Federal Records Center, St. Louis, Missouri.

9.4.4.2.16 (12-10-2007) Federal Reserve Bank Records
1. Federal reserve bank records include records of issue of US Treasury Bonds.

More Internal Revenue Manual Accessibility | Freedom of Information Act | Important Links | IRS Privacy Policy | USA.gov | U.S. Treasury

Internal Revenue Manual - 9.4.4 Requests for Information (Cont. 1)

Chapter 4. Investigative Techniques Section 4. Requests for Information (Cont. 1)

9.4.4 Requests for Information (Cont. 1)
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9.4.4.2 Government Entities 9.4.4.3 Obtaining Records from Financial Institutions

9.4.4.2 Government Entities 9.4.4.2.17 (12-10-2007) Railroad Retirement Board
1. No information is available from this agency (see 20 USC §262.16, Code of Federal Regulations.)

9.4.4.2.18 (12-10-2007) Export-Import Bank
1. The Export-Import Bank of the United States supports the financing of Unites States goods and services, turning export opportunities into real transactions, and maintaining and creating more United States jobs. The Export-Import Bank of the United States assumes credit and country risks the private sector is unable or unwilling to accept. It loans funds to foreign countries and businesses to buy goods from United States companies. The borrower can obtain up to 50 percent of the purchase price of the goods being acquired. The selling company must fill out and submit to the bank a supplier certificate. Included in this certificate is a required statement as to any commissions paid, especially in the foreign country to foreign sales "representatives" or "agents" .

9.4.4.2.19 (12-10-2007) Department of Education Records
1. The Department of Education assists students with educational funding through Federal Title IV loans and grants. The Free Application for Federal Student Aid (FAFSA) is the initial application that a student completes to establish eligibility for the numerous student financial assistance

Internal Revenue Manual - 9.4.4 Requests for Information (Cont. 1)

programs. The main funding programs include the Direct Loan, Federal Family Education Loan, Perkins Loan and the Pell Grant. 2. The FAFSA captures information such as: student name, address, social security number, date of birth, telephone number, drivers' license number, citizenship status, alien registration number, date of marital status, drug conviction information, state of legal residency, gender, Selective Service registration, type of degree, grade level in college, IRS tax information (earned income, spouse's income, foreign tax form, adjusted gross income, US income tax paid), dependants, veterans' status, father's and mother's name, and respective SSNs, IRS tax information (net worth, cash and savings, earned income) and signatures. 3. Requests for this information will be directed to: Department of Education, Office of the Inspector General (OIG) 330 C Street, SW, Room 4022, Washington DC 20202, Attn.: Assistant Inspector General for Investigations. 4. Requests should include: A. student's name B. student's date of birth C. SSN 5. Department of Education, Office of Inspector General (OIG), Investigative Services, has special agents in offices nationwide. Special agents investigate various criminal offenses including identity theft, bank fraud, money laundering and program fraud. Contact information is listed on their Web site.

9.4.4.2.20 (12-10-2007) Small Business Administration
1. The Small Business Administration (SBA), a Department of Commerce agency, maintains records pursuant to applications for the various loans offered. These records include information as to the basis of the individual's credit and capacity to perform under contract, as well as his/her qualifications with respect to volume of business and financial resources. Small Business Administration records on individuals who have received loan assistance may be obtained from any of more than 100 local SBA offices. The legal department in the local SBA office will make such files available to special agents for review in SBA offices upon presentation of his/her credentials.

9.4.4.2.21 (12-10-2007)

Internal Revenue Manual - 9.4.4 Requests for Information (Cont. 1)

Gaming Commissions and Enforcement
1. The following are state gaming commissions and enforcement agencies.

9.4.4.2.21.1 (12-10-2007) State of New Jersey Division of Gaming Enforcement
1. The State of New Jersey, Department of Law and Public Safety, Division of Gaming Enforcement, completes a financial investigation on all individuals associated with casino operations including casino developers, investors, employees, vendors, and contractors. Information available includes license and employment applications and investigative reports. 2. All requests for information from the New Jersey Division of Gaming Enforcement will be submitted as a collateral request to the SAC, Springfield, NJ Field Office. 3. State of New Jersey regulations restrict the release of information to a duly authorized law enforcement agency. Thus, such information is only available to CI personnel and may not to be disclosed to the other operating divisions.

9.4.4.2.21.2 (12-10-2007) Other Gaming Regulatory Agencies
1. Web links to other gaming regulatory agencies and organizations throughout the United States are found on the state of New Jersey Web site.

9.4.4.3 (12-10-2007) Obtaining Records from Financial Institutions
1. This subsection outlines the methods of securing records from financial institutions.

9.4.4.3.1 (12-10-2007) Alternative Methods of Obtaining Financial Institution Information
1. There are special procedures which allows access to financial information from financial institutions as defined in 12 USC §3401(1) without using compulsory legal processes such as a summons, subpoena, court order, or search warrant. 2. A financial institution is defined as any office of a bank, savings bank, credit card issuer as defined in 15 USC §1602(n), industrial loan company, trust company, savings association, building and

Internal Revenue Manual - 9.4.4 Requests for Information (Cont. 1)

loan, or homestead association (including cooperative banks), credit union, or consumer finance institution, located in any state or territory of the United States, the District of Columbia, Puerto Rico, Guam, American Samoa, or the US Virgin Islands. 3. The Right to Financial Privacy Act (TRTFP), Title 12 Chapter 35, restricts government agencies from obtaining information from a financial institution without compulsory legal process or account holder consent, except for three exceptions: A. formal request under TRTFP B. special procedures request under TRTFP C. Patriot Act §314 request

9.4.4.3.1.1 (12-10-2007) Authority to Use Alternative Methods
1. Treasury Directive 15-42 delegates to the IRS Commissioner the authority to investigate criminal violations of 18 USC §1956 and 18 USC §1957, where the underlying conduct is subject to investigation under Title 26 or the Bank Secrecy Act (BSA), or 31 USC §5311 et seq (other than violations of 31 USC §5316). Because CI has the above authority, it also has the authority to utilize a Formal Written Request pursuant to 12 USC §3408. Since CI has the authority to investigate money laundering related to counterterrorism, it also has appropriate authority for a special procedures request under 12 USC §3414 (a)(1)(c) and for a Patriot Act §314 Request.

9.4.4.3.1.2 (12-10-2007) Provisions for a Formal Written Request
1. Title 12 USC §3408 provides the authority to utilize a Formal Written Request to obtain financial records from financial institutions. The information obtained through such requests can be used in both criminal and civil matters. A government authority may request financial records under 12 USC §3402(5) of this title, pursuant to a Formal Written Request, only if the following four conditions are met: A. No administrative summons or subpoena authority reasonably appears to be available to that government authority to obtain financial records for the purpose for which such records are sought. B. The request is authorized by regulations promulgated by the head of the agency or department.

Internal Revenue Manual - 9.4.4 Requests for Information (Cont. 1)

C. There is reason to believe that the records sought are relevant to a legitimate law enforcement inquiry. D. A copy of the request is served upon the customer or mailed to his/her last known address on or before the date on which the request was made to the financial institution along with a notice which states with reasonable specificity the nature of the law enforcement inquiry.

Note:
A customer, as defined by 12 USC §3401(5), does not include partnerships of six or more individuals or corporations. 2. Non-grand jury Title 18 and Title 31 investigations, with the exception of Title 31 investigations done solely for the purpose of perfecting an 18 USC §981 forfeiture, fit within the requirements of 12 USC §3408. 3. Since 26 USC §7602 grants summons authority for civil and criminal investigations of matters falling within Title 26, a Formal Written Request shall not be made in Title 26 investigations. When investigating Title 26 violations, the procedures for third party record keeper summonses under 26 USC §7609 apply. 4. Financial institutions have the right to refuse to comply with the Formal Written Request even after a customer loses a court challenge. Title 12 USC §3411, Duty of Financial Institutions, provides that financial institutions shall deliver records requested under 12 USC §3405, an Administrative Subpoena or Summons issued pursuant to 12 USC §3407, or a Judicial Subpoena. The Formal Written Request does not equate to the mandate of a summons or subpoena and is not enforceable. However, legislative history does indicate that the notice and audit trails provided by the Formal Written Request procedures fulfill the purpose of the Right to Financial Privacy Act (RFPA) and should promote voluntary cooperation by the financial institutions with government agencies seeking records legitimately.

9.4.4.3.1.2.1 (12-10-2007) Use of a Formal Written Request
1. The Formal Written Request for financial records has limited use within CI. The Formal Written Request can be used when an administrative summons or a grand jury subpoena cannot be used (e.g., for the evaluation of Title 31 and Title 18 information items or to develop information to identify property for civil seizure). Any information obtained through such requests can be used for civil and criminal purposes and may be shared with other operating divisions and other law enforcement agencies.

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2. If, in a Title 31 investigation, CI seeks to obtain a financial institution’s records for civil purposes only (e.g., perfecting an 18 USC §981 forfeiture), it must use a Title 31 Summons as opposed to a Formal Written Request. Title 12 USC §3408(1) specifically provides that a Formal Written Request may not be used where a government authority may obtain the sought after records via an administrative summons or subpoena.

9.4.4.3.1.2.2 (12-10-2007) Formal Written Request Package
1. A Formal Written Request package was developed for use when delay of notice to the customer is desired. A major benefit of the Formal Written Request is the ability to obtain a court order delaying the notice to the customer. Title 12 USC §3409 permits the IRS to apply to the court ex parte for a delay of the notice to the customer. 2. Four documents are needed to obtain a Formal Written Request and an Order to Delay Notice. They are: A. Formal Written Request (Exhibit 9.4.4-2) B. The Application for Delay of Notice (Exhibit 9.4.4-3) C. Affidavit of Special Agent (Exhibit 9.4.4-4) D. Ex Parte Order to Delay Notice and Order to Seal Ex Parte Application (Exhibit 9.4.4-5)

9.4.4.3.1.2.2.1 (12-10-2007) The Formal Written Request
1. The Formal Written Request (Exhibit 9.4.4-2) is a letter from the SAC to the financial institution requesting the specific financial information needed. The request cannot be vague (e.g. making a general request for "all bank records relating to John Doe" ). The Formal Written Request must be signed by the SAC.

9.4.4.3.1.2.2.2 (12-10-2007) Application for Delay of Notice
1. The Application for Delay of Notice (Exhibit 9.4.4-3) is a request made to the court for the issuance of a delay of notice to the financial institution and a request for an order to seal the application and affidavit. It is important to use the specific language contained in the Application for Delay of Notice. The requirements of the Formal Written Request mandate that certain

Internal Revenue Manual - 9.4.4 Requests for Information (Cont. 1)

certifications be made to the court. The Application for the Delay of Notice meets the requirements of the RFPA.

9.4.4.3.1.2.2.3 (12-10-2007) Affidavit of Special Agent
1. The Affidavit of Special Agent (Exhibit 9.4.4-4) consists of three parts: A. The investigative experience of the special agent. B. The reasons the records are needed for legitimate law enforcement inquiry. Special agents typically need the records for a lawful investigation or official proceeding inquiring into a violation of, or failure to comply with, any criminal statute or any regulation, rule, or order issued pursuant thereto. C. The reason for delay of notice.

9.4.4.3.1.2.2.4 (12-10-2007) Ex Parte Order to Delay Notice and Order to Seal Ex Parte Application
1. The Ex Parte Order to Delay Notice and Order to Seal Ex Parte Application (Exhibit 9.4.4-5) is signed by the US Magistrate Judge or District Judge and a copy is given to the financial institution. The order directs the financial institution to delay notice to anyone concerning the Formal Written Request. The order also seals the application and the affidavit prepared by the special agent.

9.4.4.3.1.2.3 (12-10-2007) Approval
1. After the SAC reviews the package (Exhibits 9.4.4-2 through 9.4.4-5) and signs the request, the package is forwarded to the US Attorney’s Office for submission to the US Magistrate Judge or District Judge. Once the order is signed by the US Magistrate Judge or District Judge, the special agent will serve the Formal Written Request and accompanying order on the financial institution.

9.4.4.3.1.2.4 (12-10-2007) Extending the Delay of Notice
1. After service of the Formal Written Request, the special agent must comply with further notice and record keeping requirements. The main post-service requirement is notice to the customer. Generally, the Order to Delay Notice and Order to Seal Ex Parte Application allow the special agent a 90-day delay after the signing of the order by the US Magistrate Judge or US District

Internal Revenue Manual - 9.4.4 Requests for Information (Cont. 1)

Judge before the special agent must give notice to the customer that a Formal Written Request was served. After the expiration of the 90 days, the special agent must either apply for an extension of the Order to Delay Notice or send notice to the customer. 2. Exhibits 9.4.4-6 and 9.4.4-7 are examples of an Ex Parte Application for Extension of the Delay of Notice and Order Sealing Documents and the Order Extending Delay of Notice and Order to Seal. Prior to the end of the 90 days, this extension should be completed and given to the attorney for the government responsible for the investigation.

9.4.4.3.1.2.4.1 (12-10-2007) Nunc Pro Tunc Extension
1. In the event the Extension for the Delay of Notice is not timely filed, an Ex Parte Application for Nunc Pro Tunc Extension of Delay of Notice and Order Sealing Documents (Exhibit 9.4.4-8) can be prepared. A nunc pro tunc application is a request to the court to hold the government harmless, to restore it to its original position, and treat the application for the Extension for Delay of Notice as though it was timely filed. Prior to filing a nunc pro tunc application, determine whether the financial institution has given notice at the end of the 90 days. If not, then the nunc pro tunc application can be filed. If the financial institution has given notice, then notify the customer of the financial institution that a Formal Written Request was served. The nunc pro tunc procedure should not be a standard practice and should be used sparingly.

9.4.4.3.1.2.5 (12-10-2007) Notice of the Formal Written Request
1. At the expiration of the period for the delay of notice, the law requires that a Notice to the Customer (Exhibit 9.4.4-9) be sent to the customer of the financial institution stating his/her records were obtained pursuant to a Formal Written Request. Giving notice of the Formal Written Request is similar to the notice given when an administrative Title 26 summons is served on a third party record keeper. Notice is only required to be given to the owner of the account, who may or may not be the subject of the investigation. 2. The notice must state the date of the request, the reason the notice was delayed, and the general purpose of the investigation. The example in Exhibit 9.4.4-9 illustrates that the explanations need not be lengthy or detailed. In addition to this letter, a copy of the actual Formal Written Request must be sent to the customer.

9.4.4.3.1.2.6 (12-10-2007) Sharing Information
1. Information obtained via a Formal Written Request may be shared with the other operating

Internal Revenue Manual - 9.4.4 Requests for Information (Cont. 1)

divisions without notice to the customers. 2. Information obtained via a Formal Written Request may also be shared with other local, state, and Federal law enforcement agencies. Prior to sharing the financial information with another agency, the receiving agency must certify in writing that there is reason to believe the records are relevant to a legitimate law enforcement inquiry within their jurisdiction. (12 USC §3412(a)). 3. Within 14 days after the records are transferred to another law enforcement agency, notice must be sent to the customer advising of the transfer. A copy of the aforementioned certification from the receiving agency must accompany this notice. The notice sent to the customer must specify the nature of the law enforcement inquiry, who the records were transferred to, and a brief statement concerning their appeal rights. If an Order to Delay Notice was obtained, this notice does not have to be sent until 14 days after the expiration of the notice.

9.4.4.3.1.2.7 (12-10-2007) Production Costs
1. IRS must reimburse the financial institution for expenses incurred in producing the records requested. The guidelines for the rate of payment to the financial institution are the same as for a grand jury subpoena. When bills are received pursuant to a Formal Written Request, they should be referred immediately to the budget analyst, who pays the financial institution under the IRS subobject code for expenses incident to securing evidence.

9.4.4.3.1.2.8 (12-10-2007) Record Keeping
1. All Formal Written Requests, and any information obtained in response there-to, are to be kept separate from other records. Information obtained with a Formal Written Request can later be used in a grand jury investigation or for civil forfeiture.

9.4.4.3.1.2.9 (12-10-2007) Canvas Letters Differentiated from the Formal Written Request
1. Canvas letters, in the context of money laundering investigations under Titles 18 and 31, are different from Formal Written Request. Canvas letters are written requests made by special agents to financial institutions to learn whether a customer has an account. Title 12 USC §3413(g) provides that there is no notice requirement applicable to a legitimate law enforcement inquiry, which seeks (only) the name, address, account number and type of account of any customer. Thus, unlike Formal Written Requests, the notice requirements of RFPA do not apply to canvas letters.

Internal Revenue Manual - 9.4.4 Requests for Information (Cont. 1)

9.4.4.3.1.3 (12-10-2007) Special Procedures for Obtaining Financial Records Related to International Terrorism
1. The USA Patriot Act (Pub. L 107-56, enacted October 26, 2001) amended the Right to Financial Privacy Act (i.e., 12 USC §3422) by granting law enforcement and intelligence agencies the ability to obtain records from financial institutions which relate to international terrorism by a " Special Procedures Request," as opposed to obtaining them via subpoena, court order or the above mentioned Right to Financial Privacy Act " Formal Request." The amended provision permits records to be obtained via this method for both intelligence purposes and in connection with investigations. These amendments make this authority available to CI. 2. It is anticipated that CI will infrequently use this Special Procedures Request since investigations into International terrorism are generally investigated while working with an attorney for the government as an subject criminal investigation (SCI) utilizing a grand jury process with grand jury subpoenas used to obtain relevant financial records. 3. The field office must have, at a minimum, a numbered primary investigation (PI) to use the Special Procedures Request. The collection of bank information in the PI phase should be limited to the immediate transaction. Once the transaction has been reviewed, the field office must initiate an SCI to pursue further inquiry. As necessary, the field office could continue to utilize the letter in a SCI, but a summons or subpoena would be preferable. Information requested under this provision of the USA Patriot Act must be essential for the development or furtherance of a significant investigation and should not be utilized as a routine investigative step. 4. The Director, Field Operations and Director, Lead Development Centers (CI:OPS:LDC), are designated as the individuals to issue Special Procedures Requests for financial records related to an investigation involving terrorism. Exhibit 9.4.4-10 is the form letter to be used in making these requests. 5. The Right to Financial Privacy Act (12 USC §3414(a)(3)) forbids the financial institution, and any officer, employee, or agent of the financial institution, from disclosing to anyone that a government authority has sought or obtained access to a customer's financial records for purposes of conducting terrorist-related investigations. 6. Pursuant to the provisions of the Right to Financial Privacy Act, the financial institution may be entitled to reimbursement for certain expenses incurred in responding to the request for records, where the customer is an individual or a partnership of five or fewer individuals. See 12 CFR §219. The financial institution must be notified that in order to obtain payment, it must submit an itemized bill or invoice. The initial request from the Director, Field Operations will limit the financial institution’s reimbursable costs to $1000. If the financial institution anticipates costs in excess of $1000, the field office needs to obtain an estimate of the compliance costs before the

Internal Revenue Manual - 9.4.4 Requests for Information (Cont. 1)

costs are incurred and must obtain the appropriate approval for the amount. 7. The suggested form letter (Exhibit 9.4.4-10) addresses each of these issues and should be accompanied by an attachment identifying the documents that are to be produced. While the letter may be adapted to suit particular circumstances of the investigation, the substance of the sample letter should be followed. The attachment to the letter should describe with reasonable particularity the required financial records, keeping in mind the significant burden and expense of searching for and photocopying financial records. 8. Whenever this "Special Procedures Request" is used to obtain financial records, the field office must notify the Director, CI:OPS:NC.

9.4.4.3.1.3.1 (12-10-2007) Section 314 Requests for Financial Records in Terrorism Investigations
1. The USA Patriot Act (enacted October 26, 2001) authorized a separate information exchange regime, Section 314(a) of the USA Patriot Act (Pub. L. 107-56), to allow sharing of financial information between governmental entities and financial institutions. Federal law enforcement now has the ability to locate accounts of, and transactions conducted by, suspected terrorists or money launderers by providing their names and identifying information to FinCEN, a bureau of Treasury, which then forwards that information, both electronically and by fax, to financial institutions so that a check of accounts and transactions can made. 2. The following procedures are to be utilized when making the request through FinCEN: A. Certification Form: The completed form is signed by the SAC or the Assistant Special Agent in Charge (ASAC) certifying that the subject(s) being submitted under Section 314(a) on the Certification Form are under investigation for terrorism or money laundering. B. Subject Information Form: The form will be typed and must include all known identifiers in the format identified. When possible, identify specific target locations where the requests should be forwarded. C. These forms should only be transmitted to FinCEN via the e-mail address of le314@fincen.gov. 3. As soon as FinCEN receives a request, a computerized letter of receipt will be generated, which will provide a confirmation of the request along with a FinCEN Tracking Number. This tracking number is to be used for all correspondence related to the request.

Internal Revenue Manual - 9.4.4 Requests for Information (Cont. 1)

4. FinCEN will query its internal indices to determine if another agency has made a request on the same subject. If so, appropriate networking will take place.

Note:
FinCEN will not conduct any queries of Bank Secrecy Act (BSA) information or provide any commercial database research unless a separate Request for Research form is mailed to FinCEN. 5. The request will then be sent to the financial institution(s) involved and, after 14 calendar days, the requesting special agent will be advised of all positive results that were obtained. 6. Subsequent communications will be made directly between the law enforcement agency and the financial institution. In order to obtain records related to the Section 314 identified accounts and transactions, the law enforcement agency will need to furnish the financial institution with the appropriate compulsory legal process.

9.4.4.3.2 (12-10-2007) Business Organizations
1. The following business organizations typically maintain the indicated records.

9.4.4.3.2.1 (12-10-2007) Banks
1. It is not practical to describe all the bank records which might contain information in regard to any given customer. However, the principal commercial records which are of interest to special agents are: signature cards; deposit tickets or slips; customer’s ledger sheets for checking accounts; savings accounts, special accounts and loan accounts; registers or copies of cashiers checks, bank money orders, bank drafts, letters of credit, and certificates of deposit; teller’s proof sheets; copies of settlements with the clearing house; copies of cash transit letters; records of the purchase and sale of securities and government bonds; collection in and collection out records; customer’s unreturned canceled checks; documents relating to electronic transfers; safe deposit box records, and microfilm copies of original records.

9.4.4.3.2.2 (12-10-2007) JP Morgan Chase & Co.
1. The JP Morgan Chase & Co. has waived the hand delivery requirements of 26 USC §7603 and will accept summonses by mail, express service or fax (followed by mailing the original summons to the bank). The summons will be directed to JP Morgan Chase & Co., 1 Chase Manhattan Plaza –

Internal Revenue Manual - 9.4.4 Requests for Information (Cont. 1)

20th Floor, Attn: Legal Coordinator, New York, NY 10081. If personal service is required, a collateral request should be sent to the SAC of the New York field office.

9.4.4.3.2.3 (12-10-2007) Federal Reserve’s Fedwire Funds Transfer System
1. The Federal Reserve’s Fedwire Funds Transfer System is the wire transfer system operated by the 12 Federal Reserve Banks. Over 11,300 depository institutions hold accounts at the Federal Reserve Banks and conduct Fedwire transfers that total trillions of dollars each year. Fedwire information is stored electronically for 180 days from the date of a customer request; thereafter, it is transferred to microfiche and retained for seven years. 2. Access to electronically stored Fedwire information is governed by Title II of the Electronic Communications Privacy Act of 1986; therefore, a search warrant is required to conduct an electronic scan for Fedwire information stored electronically for 180 days or less. An administrative grand jury, or trial subpoena can be used to obtain Fedwire information stored in microfiche form. Since nothing precludes the Federal Reserve Bank from notifying a customer, a court order delaying notice or a sealed search warrant affidavit may be desirous. 3. Prior to issuing any process for Fedwire scanning or microfiche retrieval, special agents or attorneys for the government must contact the Department of Justice Money Laundering Section for advice and instructions.

9.4.4.3.3 (12-10-2007) Corporate Stock
1. When a corporation is formed, capital stock representing the ownership of the corporation is authorized in the corporate charter. There are two principal classes of stock-common and preferred. If only one class of stock is authorized, it will be common stock. The number of shares authorized can only be changed by formal approval of the stockholders. 2. Shares issued and subsequently reacquired by the corporation through purchase or donation are referred to as treasury stock. The number of shares outstanding will always equal the number of shares issued less the number of shares of treasury stock. 3. Each stockholder is a part owner of the corporation since each share of stock represents a fractional interest in the corporation. The stockholder is entitled to a stock certificate evidencing ownership of a specified number of shares of stock of the corporation. 4. If a stockholder desires to buy more stock, it is not necessary to obtain the permission of the company. He/she simply acquires it by purchase in the open market or privately. Conversely, if a

Internal Revenue Manual - 9.4.4 Requests for Information (Cont. 1)

stockholder desires to sell shares, he/she cannot demand that the company buy the stock. A stockholder is free, instead, to seek a buyer for the stock either in the market or by private sale. 5. After the sale terms are agreed upon, the mechanics of transfer are simple. The seller signs his/her name on the back of the stock certificate and delivers it to the buyer or the buyer’s broker. A record of all outstanding certificates is kept by the corporation or by its duly appointed transfer agent, often a bank. The transfer agent has a record of the names and addresses of the stockholders and the number of shares owned by each. After determining that the old certificate is in proper form for transfer, the transfer agent issues a new certificate to the new owner. Also, most companies have a registrar. The duty of the registrar is to double check the actions of the transfer agent to prevent improper issue of stock or fraudulent transfer. 6. A common stockholder may usually subscribe at a stated discount price to new issues of common stock in proportion to his/her holdings. This privilege, known as a stock right, is usually offered to stockholders for a limited time. During this period, the stockholder may exercise the right to purchase additional shares under the terms of the offer or may choose to sell the rights. If the stockholder allows the time limit to run out without acting, the rights become worthless. 7. A stock warrant is a certificate which gives the holder the privilege to purchase common stock at a stated price within a specified time limit or perpetually. Warrants are often issued with bonds or preferred stocks as an added inducement to investors. The stockholder may exercise the right to purchase additional shares or choose to sell the warrants. 8. When the price of the common stock of a corporation reaches a high market value, the corporation may choose to force the price into a more favorable trading range. To do this, the corporation splits its shares, that is, increases the number of shares outstanding without issuing additional stock. If, for example, a stockholder owned 100 shares which had a market value of $150 per share, a 3:1 stock split would increase the stockholder’s shares to 300 and decrease the market price to $50 per share. Although the stockholder now owns a greater number of shares than before the split, the value of his/her stock and his/her proportionate interest remains unchanged. Until the new stock is sold, the split has no tax effect. 9. A corporation may pay a dividend in cash, in stock, or in property. When cash dividends are paid, the company or its dividend disbursing agent (usually a bank) sends checks to all the stockholders whose names appear on the books of the company on the so-called record date. A dividend is a prorated distribution among stockholders and when cash dividends are paid, they are in terms of so much per share. Cash dividends are usually taxable. 10. Some companies, in order to conserve cash, pay a dividend in their own stock. A stock dividend has an effect similar to that of a stock split in that the stockholder’s proportionate share of the ownership of the company remains unchanged. A stock dividend is usually stated as a percentage of the outstanding shares (up to a maximum of 25 percent, above which it is called a stock split). A stock dividend is not taxable even though cash is paid in lieu of fractional shares-although the cash

Internal Revenue Manual - 9.4.4 Requests for Information (Cont. 1)

itself is taxable as a dividend. 11. When a corporation pays a property dividend, it is usually in the form of stock of another corporation which has been acquired for investment or some other purpose. Property distributions are treated as taxable dividends. 12. It is common practice for separate financial institutions to serve as transfer agent and dividend disbursing agent. However, a single financial institution can serve both functions. 13. Names and addresses of institutions providing these services can be found in Securities publications such as the Financial Stock Guide Service, Moody’s, and Standard and Poor’s.

9.4.4.3.4 (12-10-2007) Bonds
1. When a corporation or governmental unit wishes to borrow money for some period, usually for more than five years, it will sell a bond issue. Each bond, normally of $1,000 denomination, is a certificate of debt of the issuer and serves as evidence of a loan to the corporation or governmental unit. The bondholder is a creditor of the issuer. A bond pays a stated rate of interest and matures on a stated date when a fixed sum of money must be repaid to the bondholder. 2. Railroad, public utility, and industrial bonds are called corporate bonds. The obligations of states, counties, cities, towns, school districts, and authorities are known as municipal bonds. The US Treasury certificates, notes, and bonds are classified as government securities. 3. Bonds are issued in two principal forms, coupon bonds, and registered bonds. Coupon bonds have interest coupons attached to each bond by the corporation which issues it. Because the corporation keeps no record of the owner of the bonds, the bonds are called bearer bonds. On the due dates for the interest, the owner clips the coupons and presents them to the authorized bank for payment. Also, the principal when due, is payable to the holder or bearer of the bonds. 4. Registered bonds have the name of the owner written on the face of the bond. The company, or its authorized agent (usually a bank), has a record of the name and address of the owner. When interest is due, it is paid to the bondholder by check.

9.4.4.3.5 (12-10-2007) Stock Exchanges
1. Securities exchanges or stock exchanges neither buy nor sell securities themselves. An exchange functions as a central marketplace and provides facilities for executing orders. Member brokers representing buyers and sellers carry out these transactions. An exchange provides a continuous

Internal Revenue Manual - 9.4.4 Requests for Information (Cont. 1)

market for securities listed on that exchange. The exchanges are auction markets in that prices are determined by the existing supply and demand of the securities. 2. If a security is to be traded on an exchange, the issue must be approved for listing by that exchange. The requirements for listing on the New York Stock Exchange (NYSE) are the most stringent. Although there are only about 1,700 issues traded on the NYSE, these issues are represented by the largest corporations in the country and have an aggregate value of nearly $500 billion (or 95 percent of the value of all listed securities). While the American Express (AMEX) listing standards are not as restrictive as the NYSE, they are nonetheless designed to insure an adequate market for the securities. Securities traded on the NYSE or AMEX may also be listed and traded on a regional exchange but no security is listed on both the NYSE and the AMEX. 3. The over-the-counter securities market handles most of the securities transactions that take place in the United States. In fact, its operations are so extensive that the easiest way to describe it is to indicate what it does not do in securities transactions. The over-the-counter market does not handle the purchase or sale of securities that actually occur on securities exchanges, but it handles everything else in the way of securities transactions. The over-the-counter market is not located in any one central place. Rather, it consists of thousands of securities houses located in hundreds of different cities and towns all over the United States. These securities houses are called broker/dealers and are engaged in buying and selling securities usually for their own account and risk. 4. The over-the-counter market is a negotiated market rather than an auction market. Prices are arrived at by broker/dealers negotiating with other broker/dealers in order to arrive at the best price. They also buy and sell securities for the account and risk of others and may charge a commission for their services. To transact their business, they communicate their buy and sell orders back and forth through a nationwide network of telephones and teletypes. The exact size of the over-the-counter market cannot be determined since the securities transactions that take place over-the-counter occur in many different places and are not reported to one central agency. However, it is known that in dollar volume, substantially more securities are traded in the over-thecounter market than on all national securities exchanges combined.

9.4.4.3.6 (12-10-2007) Transfer Agents
1. The principal documents available from the transfer agent are: A. stockholder ledger card B. stock certificate(s) 2. The transfer agent keeps a record of the name and address of each stockholder and the number of

Internal Revenue Manual - 9.4.4 Requests for Information (Cont. 1)

shares owned, and checks that certificates presented for transfer are properly cancelled and that new certificates are issued in the name of the transferee. 3. In many small firms, the transfer agent is usually an attorney, a bank, or the corporation itself. In most large firms the transfer agent is a bank. The transfer agent can furnish stockholder identification, stockholder position, stock certificate numbers, number of shares, dates, evidence of returned certificates, names of transferees and transferrers.

9.4.4.3.7 (12-10-2007) Dividend Disbursing Agent
1. The principal documents available from the dividend disbursing agent are cancelled checks and Forms 1099. 2. The dividend disbursing agent is generally a bank and can provide stockholder identification, stockholder position, amount of dividends, form of dividends, dates paid, and evidence of payments.

9.4.4.3.8 (12-10-2007) Stock Brokerage Firms
1. The broker is an agent who handles the public’s orders to buy and sell securities, usually for a commission. A broker may be a corporation, partnership, or individual; and is often a member of a stock exchange or a stock exchange/over-the-counter securities firm. 2. A registered representative (also known as a securities salesperson or account executive) personally places customers’ orders and maintains their accounts. While commonly referred to as a broker, a registered representative is usually an employee of a brokerage firm rather than an actual member. 3. The broker can furnish virtually all source documents reflecting the activity of any given securities account. The two most often used accounts are: A. Cash – an account that requires securities purchases to be paid in full. B. Margin – an account that allows securities to be purchased on credit. 4. Margin is the percentage of the purchase price of a security that the customer must pay. The margin requirement is established by the Federal Reserve Board. To open a margin account, a minimum amount is usually required. Stocks purchased on margin must be registered in the street name while in the account.

Internal Revenue Manual - 9.4.4 Requests for Information (Cont. 1)

5. There are two principal ways in which securities are held-in the name of the account holder and in street name. In the first instance, the securities owned simply reflect the name of the customer who maintains the account. When securities are held in street name, however, the securities are registered in the name of the broker. This occurs when securities have been bought on margin or when a cash customer wishes the security to be held by the broker, rather than in his/her own name. 6. The principal documents available from a broker are: A. customer account card B. applications for account C. signature cards and margin agreements D. securities receipt E. cash receipts F. confirmation slips G. securities delivered receipts H. cancelled checks I. Forms 1087 J. monthly account statements

9.4.4.3.8.1 (12-10-2007) Merrill Lynch & Company
1. Merrill Lynch & Company has waived the hand delivery requirements of 26 USC §7603 and will accept summonses by personal service, mail, or express service at: Merrill Lynch & Company, 222 Broadway, Litigation Dept. 17th Floor, New York, NY 10038.

9.4.4.3.9 (12-10-2007) Commodities

Internal Revenue Manual - 9.4.4 Requests for Information (Cont. 1)

1. Commodity exchanges are similar to stock exchanges except that they deal in futures contracts. A futures contract is a legally binding commitment to deliver or take delivery of a given quantity and quality of commodity, at a price agreed upon in the trading pit or ring of a commodity exchange at the time the contract is executed. 2. Accounting services usually provided by commission houses include issuance of written confirmation of all futures orders. Most firms also provide weekly purchase and sale statements that show the number of contracts purchased and sold in specific commodity markets and the current margin deposit balances. The customer normally receives a regular monthly statement that shows all trading activity, net position, and margin balance less commissions. 3. The following is a list of commodities that are usually traded on future markets: A. grains B. oil and meal C. livestock D. poultry E. metals and minerals F. forest products G. textiles H. foodstuffs I. foreign currencies and financial instruments

9.4.4.3.10 (12-10-2007) Abstract and Title Company
1. Records include: A. Maps and tract books. B. Escrow index of purchasers and sellers of real estate-primary source of information. C. Escrow files-number obtained from index.

Internal Revenue Manual - 9.4.4 Requests for Information (Cont. 1)

D. Escrow file containing escrow instructions, agreements, and settlements. E. Abstracts and title policies. F. Special purpose newspapers published for use by attorneys, real estate brokers, insurance companies and financial institutions. These newspapers contain complete reports on transfers of properties, locations of properties transferred, amounts of mortgages, and releases of mortgages.

9.4.4.3.11 (12-10-2007) Agriculture Records
1. Potential records that may be of value to an investigation involving agriculture include: veterinarians; commission merchants; insurance; transportation and storage companies; county and state fair bonds; country farm agents; and state cattle control boards (some states maintain records of all cattle brought in and taken out of state).

9.4.4.3.12 (12-10-2007) Automobile Manufacturing Company Records
1. Potential automobile manufacturer and agency records that may be of value include: franchise agreements; new car sales and deliveries; used car purchases, trade-ins, and sales; service department records.

9.4.4.3.13 (12-10-2007) Bonding Company Records
1. Investigative and other records on persons and firms bonded, the collateral file, financial statements and data, and the address of the person on the bond.

9.4.4.3.14 (12-10-2007) Credit Agency Records
1. Special agents are only authorized to obtain credit reports pursuant to the following means: an order of a court with jurisdiction to issue the order; a Federal grand jury subpoena; the written authorization of the person whose credit report is sought; or an administrative summons. 2. Information generally available from a credit agency includes:

Internal Revenue Manual - 9.4.4 Requests for Information (Cont. 1)

A. Financial status and employment information: including income; spouse’s income; place, position, and tenure of employment; other sources of income, duration, and income in former employment. B. Credit history: including types of credit previously obtained; names of previous credit grantors; extent of previous credit; complete payment history; existing lines of credit; payment habits and all outstanding obligations; arrest and conviction records; bankruptcies; tax liens and lawsuits; and a listing of credit agency subscribers that have previously asked for a credit report on the individual.

9.4.4.3.15 (12-10-2007) Department Store Records
1. Department stores typically maintain charge account records and credit files.

9.4.4.3.16 (12-10-2007) Detective Agency Records
1. Detective agencies typically maintain a variety of investigative files. These may include background and character checks, fraud investigations (both internal & external), blackmail investigations, divorce investigations, missing persons searches, and counter-surveillance.

9.4.4.3.17 (12-10-2007) Distributor’s Records
1. Distributor’s records are excellent source for tracking such items as gambling equipment, factory, farm, home & office equipment, equipment for the production of illegal drugs, or any specific industry which may be involved in the investigation.

9.4.4.3.18 (12-10-2007) Drug Store Records
1. Prescription records may be available through drug stores.

9.4.4.3.19 (12-10-2007) Fraternal, Veterans, Labor, Social & Political Organization Records
1. These organizations typically maintain membership and attendance records; payments of dues and contributions; and the addresses and biography of members.

Internal Revenue Manual - 9.4.4 Requests for Information (Cont. 1)

9.4.4.3.20 (12-10-2007) Hospital Records
1. Typical hospital records include entry and release dates, and payments made.

9.4.4.3.21 (12-10-2007) Hotel Records
1. Hotel records include the identity of guest; telephone calls made to and from the room; payment and credit records; forwarding address; reservations for travel-transportation companies and other hotels; freight shipments; and luggage-in and out.

9.4.4.3.22 (12-10-2007) Laundry & Dry Cleaning Records
1. Typical laundry and dry cleaning records include laundry marks and tags, and payment records.

9.4.4.3.23 (12-10-2007) Insurance Company Records
1. Potential insurance company records of value include: income; assets; applications; and appraisals of luxury items such as furs and jewelry.

More Internal Revenue Manual Accessibility | Freedom of Information Act | Important Links | IRS Privacy Policy | USA.gov | U.S. Treasury

Internal Revenue Manual - 9.4.4 Requests for Information (Cont. 2)

Chapter 4. Investigative Techniques Section 4. Requests for Information (Cont. 2)

9.4.4 Requests for Information (Cont. 2)
q q q

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9.4.4.3 Obtaining Records from Financial Institutions 9.4.4.4 Information from Foreign Countries Exhibit 9.4.4-1 Financial Crimes Enforcement Network Financial Intelligence Units around the World Exhibit 9.4.4-2 Formal Written Request Exhibit 9.4.4-3 The Application for Delay of Notice Exhibit 9.4.4-4 Affidavit of Special Agent Exhibit 9.4.4-5 Ex Parte Order to Delay Notice and Order to Seal Ex Parte Application Exhibit 9.4.4-6 Ex Parte Application for Extension of Delay of Notice and Order Sealing Documents Exhibit 9.4.4-7 Order Extending Delay of Notice and Order to Seal Exhibit 9.4.4-8 Ex Parte Application for Nunc Pro Tunc Extension of Delay of Notice and Order Sealing Documents Exhibit 9.4.4-9 Notice to the Customer Exhibit 9.4.4-10 Official Request for Financial Records Related to Investigation of Terrorism

9.4.4.3 Obtaining Records from Financial Institutions 9.4.4.3.23 Insurance Company Records 9.4.4.3.23.1 (12-10-2007) The Equitable Life Assurance Society
1. The Equitable Life Assurance Society of the United States has waived the hand delivery requirements of 26 USC §7603 and will accept summonses by personal service, mail, or express service at: 1290 Avenue of the Americas, New York, NY 10014. This company has indicated they

Internal Revenue Manual - 9.4.4 Requests for Information (Cont. 2)

would prefer requests be made by mail rather than in person.

9.4.4.3.23.2 (12-10-2007) Prudential Insurance Company
1. Summonses for Prudential Insurance Company may be served in person or mailed to its home office: The Prudential Insurance Company of America, Law Department; 213 Washington Street; Newark, NJ 07102–2992. If possible, summonses should include the individual’s birth date or the serial number of one of the policies, or both. A request for mortgage information should include the name of the subject’s spouse, the exact location of the property in question, and, if possible, any other identifying details such as the Prudential mortgage number appearing on the document or the date of the transaction.

9.4.4.3.23.2.1 (12-10-2007) Liberty Mutual Insurance Records (former Prudential Insurance Companies)
1. In 2003, Liberty Mutual acquired the following Prudential Insurance Companies: A. Prudential General Insurance Company B. Prudential Commercial Insurance Company C. Prudential Property and Casualty Insurance Company 2. Summons for records of these former Prudential Insurance Companies should be delivered to the CT Corporation Systems office within the state where the policy holder resides.

9.4.4.3.23.3 (12-10-2007) Travelers Insurance Company
1. Whenever information is needed from Travelers Insurance Company, Hartford, Connecticut, special agents outside the Boston Field Office will prepare a collateral request together with a summons for any information or data desired from the company for transmittal to the SAC, Boston field office.

9.4.4.3.23.4 (12-10-2007) Union Central Life Insurance Company

Internal Revenue Manual - 9.4.4 Requests for Information (Cont. 2)

1. The Union Central Life Insurance Company, has waived the hand delivery requirements of 26 USC §7603 and will accept summonses by registered mail at: Union Center Life Insurance Company, Attn: Executive Vice President General Counsel and Secretary, 1876 Waycross Road, Cincinnati, OH 45240.

9.4.4.3.23.5 (12-10-2007) Metropolitan Life Insurance Company
1. The Metropolitan Life Insurance Company has waived the hand delivery requirements of 26 USC §7603 and will accept summonses by personal service, mail, or express service at: Metropolitan Life Insurance Company, Attn: Legal Department, 2701 Queens Plaza N., Long Island, NY 11101.

9.4.4.3.23.6 (12-10-2007) Pan American Life Insurance Company
1. The Pan American Life Insurance Company has waived the hand delivery requirements of 26 USC §7603 and will accept summonses by personal service, mail, or express service at: Pan American Life Insurance Company, Attn: Legal Department, Pan American Center, 601 Poydraf, 12th Floor, New Orleans, LA 70130. Although personal service of a summons is not required, all mail requests for information should be accompanied by a summons.

9.4.4.3.23.7 (12-10-2007) CNA Insurance Companies
1. The registered agent for the CNA Insurance Companies has waived the hand delivery requirements of 26 USC §7603 and will accept summonses by personal service, mail, or express service at: Registered Agent for CNA, CNA Plaza, Attn: Law Dept. Chicago, IL 60685. The registered agent is authorized to accept service. Upon such service, the law department logs the receipt of the summons/subpoena and, if of a criminal nature, forwards the summons/subpoena to: Corporate Security, CNA Plaza, 333 S. Wabash, 24th FL, Chicago, IL 60604. CNA Insurance Companies include: A. American Casualty Company of Reading, Pennsylvania B. CNA Casualty of California C. CNA Casualty of Puerto Rico D. Columbia Casualty Company

Internal Revenue Manual - 9.4.4 Requests for Information (Cont. 2)

E. Continental Assurance Company F. Continental Casualty Company G. Mid-States Insurance Company H. National Fire Insurance Company of Hartford I. Transcontinental Insurance Company J. Transportation Insurance Company K. Valley Forge Insurance Company

9.4.4.3.23.8 (12-10-2007) Aetna Life and Casualty
1. Special agents outside the Boston field office seeking information from Aetna Life and Casualty will request the information through collateral requests to the SAC, Boston field office. The summons should be addressed to: Aetna Life and Casualty, 151 Farmington Avenue, Hartford, CT 06156.

9.4.4.3.24 (12-10-2007) Newspaper Records
1. Newspaper records can include want ads, payment records, and clippings on a given person assembled in one file with photographs, notes, unpublished data, etc.

9.4.4.3.25 (12-10-2007) Oil Companies
1. Oil companies maintain the records listed in the sections below.

9.4.4.3.25.1 (12-10-2007) Chevron Credit Records
1. Chevron Corporation has waived the hand delivery requirements of 26 USC §7603 and will accept summons/subpoena by mail, express service: Chevron Headquarters, Attn: Legal

Internal Revenue Manual - 9.4.4 Requests for Information (Cont. 2)

Department, 6001 Bollinger Canyon Road, San Ramon, CA 94583.

9.4.4.3.26 (12-10-2007) Photograph Records
1. If a photograph of an individual is needed, driver’s licenses are the most likely source. Additional sources may include relatives, associates, and friends; places of employment; police and FBI files; and school yearbooks.

9.4.4.3.27 (12-10-2007) Private Business Records
1. Private business records may include personnel & payroll records; customer account information; and leads to other companies with whom the subject transacted business.

9.4.4.3.28 (12-10-2007) Publication Records
1. Publication records may include professional, trade, and agriculture directories and magazines; vanity publications such as Who’s Who of America and various states; city directories; and a variety of industry-specific periodicals.

9.4.4.3.29 (12-10-2007) Public Utility Company Records
1. Public utility company records may include present and previous address of subscribers, and records of payments.

9.4.4.3.30 (12-10-2007) Real Estate Agency or Savings and Loan Association Records
1. Useful real estate agency or savings & loan records include: property transactions, financial statements, loan applications, payments made and received (settlement sheets), and credit files.

9.4.4.3.31 (12-10-2007) Telephone Company Records
1. Title 18 USC §2703(c) provides that telephone toll records shall be disclosed to a governmental

Internal Revenue Manual - 9.4.4 Requests for Information (Cont. 2)

agency only when the governmental agency uses a grand jury subpoena, administrative subpoena (summons), court order or obtains a search warrant related to such information. This information may also be disclosed to the government if the government agency has obtained the consent of the customer or subscriber. Notice to the customer or subscriber is not required. 2. Some telephone companies require service to a specific company location.

9.4.4.3.31.1 (12-10-2007) AT&T Wireless
1. The law enforcement support needs of AT&T Wireless Services are to be directed to their National Subpoena Compliance Center in West Palm Beach, Florida. This also includes service of court orders for surveillance and subpoenas for customer information via fax. 2. The mailing address and contact numbers for the National Subpoena Compliance Center are: AT&T, National Subpoena Compliance Center, 11760 US Highway One, North Palm Beach, FL 33408. 3. Subpoenas and court orders related to AT&T Wireless Services must specifically name "AT&T Wireless Services." AT&T Wireless Services will not comply with legal processes that simply address "AT&T" or "AT&T Corp." Legal process not specifically addressed to AT&T Wireless Services will be returned without processing.

9.4.4.3.32 (12-10-2007) Transportation Company Records
1. Transportation company records may include passenger lists; reservations; payments; departure and arrival times; and freight carrier-shipper destination and storage points.

9.4.4.3.33 (12-10-2007) Consumer Loan Exchange Records
1. The Consumer Loan Exchange or Lenders Exchange exists in all of the large cities in the United States, as well as in some of the smaller cities. It is a non-profit organization, supported by and for its members. Most of the lending institutions are members of the exchange. It can supply information concerning open and closed loan accounts with member companies, and other information. These organizations are not listed in directories or telephone books. Their location in a city may be obtained through local lending agencies. Consumer Reports may be obtained from these organizations only by court order or in accordance with written instructions of the consumer to whom the information relates.

Internal Revenue Manual - 9.4.4 Requests for Information (Cont. 2)

9.4.4.3.34 (12-10-2007) Marshall Field and Company
1. Inquiries will not be made by mail addressed direct to Target Corporation c/o CT Corp, 208 S. LaSalle St. Suite 814, Chicago, IL 60604. The subpoena will then be directed to the corporate office located in Minneapolis. Special agents with posts-of-duty outside Chicago requiring information from that company will make inquiry by collateral request together with a summons to the SAC, Chicago field office for such information.

9.4.4.3.35 (12-10-2007) Western Union
1. Western Union has waived the hand delivery requirements of 26 USC §7603 and will accept subpoenas and summonses for money transfer records by personal service, mail, express service or fax to Western Union Financial Services Attn: Custodian of Records, 20 Corporate Hills Drive, St. Charles, MO 63301.

9.4.4.3.36 (12-10-2007) National Credit Card Agencies
1. Credit card companies maintain the records listed in the sections below.

9.4.4.3.36.1 (12-10-2007) American Express
1. To obtain information from American Express, summonses may be served in person at any American Express Office. The summons should be addressed to the Custodian of Records, American Express Travel Related Services Company, Inc., CT Corporation Systems, Registered Agent, 111 8th Ave., 13th Floor, New York, NY 10011.

9.4.4.3.36.2 (12-10-2007) Citibank Diners Club and Carte Blanche
1. Citibank Diners Club and Carte Blanche have waived the hand delivery requirements of 26 USC §7603 and will accept summonses by personal service, mail, or express service Custodian of Records. Citibank, 701 East 60th Street North, Sioux Falls, SD 57117. In addition to the monthly statements and charge slips, copies of the original application and payment check can be made available upon official request. These records are usually maintained for seven years.

Internal Revenue Manual - 9.4.4 Requests for Information (Cont. 2)

9.4.4.3.37 (12-10-2007) Car Rental Agency Records
1. Car rental companies maintain the records listed in the sections below.

9.4.4.3.37.1 (12-10-2007) Avis Rent-a-Car, Inc.
1. Avis Rent-a-Car has waived the hand delivery requirements of 26 USC §7603 and will accept summonses by personal service, mail, or express service at: Avis Rent-a-Car, Inc., Legal Department 3rd Floor, 6 Sylvan Way, Parsippany, NJ 07054.

9.4.4.3.37.2 (12-10-2007) Hertz Corporation
1. Hertz has waived the hand delivery requirements of 26 USC §7603 and will accept summonses by personal service, mail or express service at Hertz Corporation, Law Department, Attn: Deputy General Counsel, 225 Brae Blvd., Park Ridge, NJ 07656. The body of the summons must clarify the specific corporate records sought, as a Hertz Equipment is a subsidiary of the Hertz Corporation.

9.4.4.3.37.3 (12-10-2007) National Vanguard Car Rental
1. Vanguard Car Rental is the owner of Alamo Rent-a-Car and National Car Rental. Vanguard Car Rental has waived the hand delivery requirements of 26 USC §7603 and will accept summonses for Vanguard, National and/or Alamo by personal service, mail, express service or fax at Vanguard Car Rental Company, 6929 North Lakewood Ave., Legal Department Suite 100, Tulsa, OK 74117.

9.4.4.3.38 (12-10-2007) Horse Registration Records
1. Horse organizations maintain the records listed in the sections below.

9.4.4.3.38.1 (12-10-2007) Jockey Club of America

Internal Revenue Manual - 9.4.4 Requests for Information (Cont. 2)

1. The Lexington, Kentucky office maintains statistics on pedigrees, racing record and purses; and records of foals for stallion and mares. However, there is no historical record of owners for a particular horse. The registration records are passed from owner to owner. The horse cannot be raced without these registration papers. A summons should be addressed to the Jockey Club of America, 821 Corporate Drive, Lexington, KY 40503 and sent via collateral to the Nashville field office.

9.4.4.3.38.2 (12-10-2007) American Quarter Horse Association
1. The American Quarter Horse Association (AQHA) is located in Amarillo, Texas. Information available includes registration history, racing record, record of purses and pedigree records. The AQHA is able to provide records reflecting the ownership history of a particular horse. However, the records cannot be searched by owner since they are categorized by horse. A summons should be addressed to the American Quarter Horse Association, 1600 Quarter Horse Drive, Amarillo, TX 79104 and sent via collateral to the Dallas field office.

9.4.4.3.38.3 (12-10-2007) United States Trotting Association
1. The United States Trotting Association is located in Columbus, Ohio. Information available includes pedigrees and winnings of all registered trotters and pacers listed by horse registration number. Their records also contain the date and place of each race, how the horse finished, the total purse and the name of the driver. Information relating to changes in ownership and winnings by year and lifetime is also available. A summons will be addressed to the United States Trotting Association, 750 Michigan Ave., Columbus, OH 43215 and sent via collateral to the Cincinnati field office.

9.4.4.3.39 (12-10-2007) Amway Corporation
1. Amway Corporation has waived the hand delivery requirements of 26 USC §7603 and will accept summonses by personal service, mail, or overnight service at Amway Corporation, 7575 E. Fulton, Ada, MI 49355, Attn.: Director, Legal Division. Direct distributors who further qualify for profit sharing bonuses receive the non-cash part of that bonus through a mutual fund account administered by Amway Mutual Fund, Inc., 7575 E. Fulton, Ada, MI 49355, which requires a separate summons.

9.4.4.4 (12-10-2007) Information from Foreign Countries

Internal Revenue Manual - 9.4.4 Requests for Information (Cont. 2)

1. The subsections below contain procedures for obtaining information from foreign countries and specifically addresses the following:
q

general procedures information from Canada information from Switzerland data to be included in requests for information from foreign countries witnesses In foreign countries information from INTERPOL information from foreign financial investigative unit

q

q

q

q

q

q

9.4.4.4.1 (12-10-2007) General Procedures
1. For all international investigative matters, either formal or informal, the field office's first point of contact must be the Director, CI:OPS:I or CI Country Attaché. 2. Formal requests for information or assistance from a foreign country can be made pursuant to the following (see IRM 9.4.2, Sources of Information, for further details about these mechanisms): A. Tax Treaty B. Mutual Legal Assistance Treaty C. Letter Rogatory D. INTERPOL E. FinCEN 3. Information or assistance from a foreign country includes: A. requests for information from consulates or embassies in the United States

Internal Revenue Manual - 9.4.4 Requests for Information (Cont. 2)

B. requests to interview foreign officials located in the United States who appear to have diplomatic status 4. All formal requests for information or assistance from a foreign country should be submitted by a collateral to the Director, CI:OPS:I unless otherwise instructed. 5. Subsection 9.4.4.4.3 details the information to be included in the collateral. 6. Documents and reports received from foreign countries, or from embassies or consulates of foreign countries, and made available to CI personnel will not be furnished to another government agency, except as may be permitted by statute and/or the applicable treaty. 7. When a foreign government makes direct inquiry of CI personnel or when it is learned that a foreign government is interested in an investigation, such information will be immediately referred by the SAC to the Director, CI:OPS:I for coordination purposes. 8. See IRM 9.4.12, Arrests for procedures to arrest an individual in a foreign country.

9.4.4.4.2 (12-10-2007) Information from Canada
1. The procedures for obtaining taxpayer or tax return information, as defined in 26 USC §6103, from foreign countries also apply to requests for information from Canada. However, because of the unique relationship between Canada and the United States, an exception to these procedures is allowed in the following circumstance: A. Special agents in some border field offices have developed a close, informal relationship with Canadian tax officials stationed on or in the immediate proximity of the border, and frequently obtain, informally through such tax officials, collateral information from individuals, financial institutions, government officials, and business establishments. It is intended that this type of informal cooperation be continued provided 26 USC §6103 type information is not being disclosed or exchanged outside of the Competent Authority channels. However, special agents are not to make direct requests of the authorities in Ottawa; make direct requests of a Canadian citizen or other Canadian entity in Canada on a third-party basis; or make requests for information outside the adjacent border area except via prescribed exchange procedures through the Competent Authority. 2. Upon approval by CI:OPS:I, the CI Country Attaché will obtain the necessary clearances and furnish the originating office with the procedure to be followed and, where appropriate, the name and location of the Canadian tax official who is to be contacted by the special agent. A Canadian agent will usually accompany the special agent when third party contacts are made. If these

Internal Revenue Manual - 9.4.4 Requests for Information (Cont. 2)

contacts involve taxpayer or tax return information, then approval for such contact must be obtained from the US Competent Authority. 3. Requests for information from Canada will be prepared and routed pursuant to subsection 9.4.4.4.3 which details procedures for obtaining information from foreign countries. The request will also contain the information specified in (a) below. Except under special circumstances, respective procedures should be observed in limiting a request for information to a period not to exceed 10 years immediately preceding the request. Where informal arrangements for inquiries exist in some border field offices, such field offices should identify in their formal requests those with whom they have been transacting official matters to avoid duplication of effort. There is no informal process for disclosing taxpayer or tax return information. To the extent requests to Canada involve taxpayer or tax return information, such requests must be sent to Canada by the US Competent Authority: A. Provide adequate background to support a Canadian tax interest, because Canadian tax authorities are authorized to furnish only that information which they can obtain under the revenue laws of Canada. 4. In some investigations, where the essential information sought is complex, involved and voluminous, it may be desirable to have preliminary discussions with Canadian authorities. If the investigation involves taxpayer or tax return information, there must first be an exchange of appropriate correspondence between Competent Authorities, prior to any preliminary discussion, to avoid a violation of 26 USC §6103. The request to hold preliminary discussions in such investigations will be prepared and routed through the Director, CI:OPS:I. Exchange of information resulting from the preliminary discussions will be formalized as early as possible and before any documents are exchanged. 5. If information received from Canada Revenue Agency (CRA) through regular channels requires further correspondence, the SAC or his/her designee, (delegated no lower than SSA level), may communicate directly with the Canadian district office which furnished the original information pursuant to approval by the Competent Authority. However, copies of any such communication will be forwarded, one each, to the CI Country Attaché and to the Director, CI:OPS:I. Such direct communication applies only in instances where information was received through regular channels and follow-up communication is necessary. The original communication and any new areas of inquiry must be routed as prescribed above. Similarly, any CI field office, which has provided information to CCRA officials through the usual channels, may subsequently communicate directly with those officials with respect to the information provided pursuant to approval of the Competent Authority. However, copies of any such communication will be forwarded, one each, to the CI Country Attaché and the Director, CI:OPS:I. In the instances where the information is being exchanged not pursuant to the tax treaty, a copy of any such communication need only be sent to the CI Country Attaché.

Internal Revenue Manual - 9.4.4 Requests for Information (Cont. 2)

6. In accordance with an agreement between the United States and Canadian tax officials, where the tax affairs of an individual, partnership or corporation are being investigated by the United States and the same type of investigation is also being currently conducted by CCRA, it may be advantageous to conduct the investigation pursuant to the Simultaneous Criminal Investigation Program (SCIP). This program is designed to assist in furnishing information timely (see IRM 9.4.2, Sources of Information).

9.4.4.4.2.1 (12-10-2007) United States Swiss Treaty on Mutual Assistance in Criminal Matters
1. There are several legal mechanisms available to obtain testimony and tangible evidence from Switzerland. To deal primarily with the problem of Swiss Bank Secrecy Laws, especially as it applies to criminal tax investigations, special procedures were put into place to request assistance from the judicial and executive authorities of Switzerland. 2. The treaty applies to specified offenses which are mutually criminal (i.e., punishable under the laws of both the United States and Switzerland). It generally does not apply to violations with respect to taxes. However, it does apply to offenses relating to tax laws if: A. The offense is committed by a person reasonably suspected of being in the upper echelon of an organized crime group or of participating significantly in any important activity of such a group. B. Available evidence is insufficient to provide a reasonable prospect of successful prosecution of this person for the illegal activities of such group. C. It is reasonably concluded that requested assistance will substantially facilitate the successful prosecution of such person and should result in his/her imprisonment for a sufficient period of time so as to have a significant adverse effect on the organized criminal group. D. The securing of the information or evidence without the requested assistance is impossible or unreasonably burdensome. Another limitation especially applicable to tax investigations relates to requested assistance with respect to two crimes: one to which the treaty applies and one to which it does not. If, under Swiss law, the first crime merges into the second, no assistance will be provided. 3. An organized criminal group is defined by the treaty. The elements of such a group, without any one of which the special organized crime provisions will not apply, are: A. An association or group of persons combined together.

Internal Revenue Manual - 9.4.4 Requests for Information (Cont. 2)

B. Association for a substantial or indefinite period. C. Purpose of association, monetary or commercial gains for itself or others, and illegal means of obtaining these gains. D. Carrying out purpose in a methodical and systematic manner. This is under acts or threats of violence or other acts which are likely to intimidate and are mutually criminal, and either, striving to obtain influence in politics or commerce, especially unpolitical organizations, public administrations, the judiciary, commercial enterprises, employers' associations, labor unions or other employees' associations, or association with a similar (organized crime) group which strives to obtain such influence. 4. Requests for assistance must be made according to procedures detailed in IRM 9.4.2, Sources of Information and must include the following elements: A. An introductory paragraph naming the authority on whose behalf the request is being made, the offense being investigated, a brief statement of the need for the evidence, identification of the subject of the investigation, and a concise statement of what assistance is requested. B. A description of the offense in concise terms; state the code section violated; include facts of the investigation, showing that the offense has taken place or the reasons for believing the offense has taken place. C. A statement of the need for assistance and how the evidence sought fits into the proof of the investigation (e.g., to prove one or more of the elements of the crime or to show a motive). D. A statement of the full name, place and date of birth, address, individual's citizenship and any other information which may aid in the identification of the persons who are present at the time of the request of the subject of the investigation. E. A statement naming witnesses or other persons who may be affected by the request (e.g., joint bank account holders). F. The statement as to any particular procedure that is requested (e.g., the use of compulsory process for documents before notice to a witness). G. A statement as to whether the testimony to be taken (if any) should be done under oath or not.

Internal Revenue Manual - 9.4.4 Requests for Information (Cont. 2)

H. A description of the information, statement or testimony sought. I. A description of documents, records or articles of evidence to be produced or preserved, the persons on whom they are to be obtained, and the desired method of reproducing or authenticating them. This description must be as specific as possible. J. Information as to the allowance and expenses to which a person appearing in the United States will be entitled. The dollar amount for attendance fees and per diem can be ascertained from 28 USC § 1871. K. Information, which provides reasonable suspicion under the organized crime provisions; reasonable suspicion is less than reasonable cause.

9.4.4.4.3 (12-10-2007) Data to be Included in Requests for Information from Foreign Countries
1. Before forwarding any collateral request for foreign inquiries, field office personnel are to ensure that the information sought is vital to the successful completion of the investigation at issue. If so, the request must include or be accompanied by all pertinent information and documents required by the International function to process the request, make travel arrangements, and conduct inquiries. The request should not be repetitious of prior requests but should include: A. Subject's name and address, and, if an individual, social security number, place and date of birth, and whether the subject is a citizen or resident of the United States. B. Name and address of pertinent entities affiliated with the subject and the nature of such affiliations. C. Brief resumé of the investigation involved with particular reference to the tax issues (the prospects of obtaining information from a foreign country are enhanced if it can be shown that the foreign government may have a related tax interest). D. Detailed statement of the information sought and why it is needed. E. Statement of the efforts made to secure the desired information prior to the request and why the efforts were not successful (including comment on any relevant data supplied by the subject and the reasons for considering such data inadequate). F. If records of a foreign affiliate of the subject are to be examined, the name and address of the custodian of the records and a document authorizing the custodian to permit that

Internal Revenue Manual - 9.4.4 Requests for Information (Cont. 2)

examination or an explanation as to why the authorization was not obtained. G. Information on an individual who is to be interviewed, including: name, address, date of birth, nationality, profession, relationship with the subject and with any foreign corporation controlled by the subject, or as much of the foregoing data as may be available, together with any other information that may be helpful in identifying the individual. H. All pertinent names, addresses, leads, and other information that may be helpful in complying with the request. I. If the request requires bank records, please identify the specific branch. J. Name and telephone number of the requesting special agent.

Note:
For Canadian requests, also address subsection 9.4.4.4.2, Information from Canada. 2. The following data will also be included to the extent known at the time of request: A. Date upon which a response is required in order to comply with instructions concerning timely submission of investigations involving the statute of limitations for prosecution and any other facts indicating the urgency attached to the need for the information. It should be noted that pursuant to 18 USC §3292 (Suspension of limitations to permit United States to obtain foreign evidence), the field office can petition the district court to toll the statute of limitations while the foreign request is outstanding. The tolling of the statute of limitations is generally limited to six months if the information sought is provided by the foreign country before the statute of limitations expires (see IRM 9.1.3, Criminal Statutory Provisions and Common Law). B. Information concerning the importance of the investigation to the field offices enforcement effort and any other facts which make the investigation unusual and worthy of preferential treatment. C. A brief statement as to the degree that the desired information, if obtainable, will affect the success of the civil and criminal aspects of the investigation. D. The taxable years and approximate tax liability or additional income involved. 3. If information is sought from more than one country, the general information may be included in a single memorandum. However, any information specific to any one country, including the

Internal Revenue Manual - 9.4.4 Requests for Information (Cont. 2)

information sought, should be on a separate attachment. 4. The US Competent Authority may turn over the entire background file, and all information contained in the collateral request, to the foreign government in order to obtain the information most efficiently. The requesting special agent should specify any information, which is provided for background information but should not be released to representatives of the foreign government or source. 5. Identify all grand jury information contained in the collateral request and that the United States Attorney's Office authorizes its use, so it may be properly protected. 6. The request will be submitted in the manner described in paragraphs (1) through (3) above. 7. All requests will ask whether any witness in a foreign country who furnishes information would be willing to voluntarily appear in a US court, if needed. 8. Any inquiries should be directed to the CI Country Attaché handling the collateral. 9. The CI Country Attachés will update the status of the collaterals that are opened in their inventory on at least a quarterly basis and will notify the requesting special agent of the status of their inquiry at the time of the update.

9.4.4.4.4 (12-10-2007) Witnesses in Foreign Countries
1. Nonresident aliens physically present in a foreign country cannot be compelled to appear as witnesses in a US district court since they are beyond the jurisdiction of US officials. Since the Constitution requires confrontation of adverse witnesses in criminal prosecutions, the testimony of such aliens may not be admissible until the witness appears at trial. However, certain testimony related to the admissibility of documents may be obtained under 18 USC §3491 et seq. without a personnel appearance in the United States. Additionally, 28 USC §1783 et seq. provides limited powers to induce the appearance of US citizens physically present in a foreign country. 2. Expenditures necessary for witness fees and travel costs to secure witnesses from outside the United States for grand jury and district court purposes, whether US citizens or foreigners, are made from DOJ funds and are authorized only by the Attorney General upon the application of attorney for the government. All matters involving service of subpoenas abroad are also handled by the Attorney General. Special agents will identify in his/her report those witnesses from a foreign country who may be expected to voluntarily appear so that the attorney for the government may make whatever arrangements are necessary for their appearance. No commitment will be made by CI personnel concerning witness arrangements involving travel

Internal Revenue Manual - 9.4.4 Requests for Information (Cont. 2)

from outside the United States (other than for IRS personnel) without the full advance approval of the attorney for the government handling the case. Such arrangements should be made sufficiently in advance so that the attorney for the government can inform the Attorney General thereof. 3. If the special agent wishes to interview the witness in a foreign country, it may be necessary to obtain a letter of invitation from the foreign country before travel can be approved. The special agent will contact the CI Country Attaché responsible for the country to which the special agent wishes to travel to determine if the country has this condition. A letter between Competent Authorities is also required if there is a tax treaty between the United States and the foreign country.

9.4.4.4.5 (12-10-2007) Information from INTERPOL
1. INTERPOL can provide assistance in obtaining leads, information, and evidence from foreign countries. This request is an official request made directly to the police or criminal law enforcement authorities or another country seeking what is commonly known as police information or assistance. Police information or assistance is, generally, information that can be obtained or assistance that can be provided by law enforcement authorities without using subpoenas or another legal process. The request is pursued within the context and confines of each country's laws and policies. Cooperation by participating countries is voluntary. 2. Examples of the types of information and assistance include:
q

criminal records and intelligence checks asset searches photos of persons and properties travel and immigration records telephone subscriber checks address checks business and corporate filings

q

q

q

q

q

q

3. To request information through INTERPOL, it is recommended that the CI liaison at INTERPOL be contacted first (see Financial Crimes Web page for contact) to determine the effectiveness of obtaining the information through INTERPOL. If it is recommended that INTERPOL can help, a

Internal Revenue Manual - 9.4.4 Requests for Information (Cont. 2)

collateral will be submitted to the CI liaison describing the assistance needed (see Document Manager for Memo Request of INTERPOL Assistance.)

9.4.4.4.6 (12-10-2007) Information from a Foreign Financial Investigative Unit
1. The Financial Crimes Enforcement Network is the FIU operating in the United States. The Financial Crimes Enforcement Network can formally request assistance in gathering information on behalf of US law enforcement agencies from FIUs established in other countries. The assistance that can be provided by the foreign FIU will vary with the individual country. Only information concerning a money laundering investigation can be requested. 2. To request information through FinCEN, it is recommended that the CI liaison at FinCEN be contacted first (see Financial Crimes Web page for contact) to determine the effectiveness of obtaining the information through FinCEN. If it is recommended that FinCEN can help, two documents need to be submitted to the CI liaison describing the assistance needed (see Document Manager for FinCEN's Request for Research Form and the Egmont Group's Request for FIU Information Form.)

Exhibit 9.4.4-1 (12-10-2007) Financial Crimes Enforcement Network Financial Intelligence Units around the World
See FinCEN Web site for an updated listing on the information concerning Financial Intelligence Units around the world.

Exhibit 9.4.4-2 (12-10-2007) Formal Written Request
Department of the Treasury Internal Revenue Service Washington, DC 20224 (Date) Name of Financial Institution Address City, State Zip

Criminal Investigation

Internal Revenue Manual - 9.4.4 Requests for Information (Cont. 2)

IN RE:

FORMAL WRITTEN REQUEST FOR PRODUCTION OF INFORMATION PURSUANT TO RIGHT TO FINANCIAL PRIVACY ACT, 12 USC §3401– §3422 ET SEQ. To Whom It May Concern:

This letter is a Formal Written Request for you to provide any and all records, documents, and other information in your possession, or within your control, relating to the following persons or entities: NAME: ADDRESS: SSN: You are hereby requested to produce all documents listed in the attachment to this FORMAL WRITTEN REQUEST. Production and or disclosure of the above records, documents, and information is to be made to: Special Agent (NAME) Internal Revenue Service (ADDRESS FOR PRODUCTION) (ADDRESS ) The date set for the production of the records is ______•. As noted in the attached Order of the United States District Court for the ________(xxxx) District of ________(State)•, you are ordered to delay providing any notice of the service of this Formal Written Request, or of your production of documents, records or information pursuant to the Formal Written Request, to your customer for a period of ninety days, unless such delay period is extended by further order of the Court. You will be notified if such an extension is obtained.

Internal Revenue Manual - 9.4.4 Requests for Information (Cont. 2)

Should you have any questions regarding this Formal Written Request, you may contact Special Agent (NAME) at (TELEPHONE NUMBER). As required by the Right to Financial Privacy Act, 12 USC §3401 et seq., and the applicable Code of Federal Regulations 31 CFR, Section 14.1 et seq., certification is hereby made that the requesting governmental agency has complied with the applicable provisions of that Act and Regulation.

_______________ (Signed by SAC or designee) Special Agent in Charge Criminal Investigation Internal Revenue Service Attachments:•(x)

Exhibit 9.4.4-3 (12-10-2007) The Application for Delay of Notice
UNITED STATES DISTRICT COURT (JUDICIAL DISTRICT) IN RE:•ORDER TO DELAY NOTICE FOR FINANCIAL PRIVACY ACT INFORMATION/RECORDS _______________•/

MISC. NO.

EX PARTE APPLICATION FOR ISSUANCE OF ORDER TO DELAY NOTICE PURSUANT TO 12 USC §3401 ET SEQ., AND REQUEST TO SEAL APPLICATION AND AFFIDAVIT

Internal Revenue Manual - 9.4.4 Requests for Information (Cont. 2)

•NOW COMES the United States of America, (US ATTORNEY), United States Attorney, by (AUSA), Assistant United States Attorney, on behalf of the Internal Revenue Service (IRS), Criminal Investigation, an agency of the Department of the Treasury, and makes the following Application: (1)•Application is made pursuant to 12 USC §3401–§3422 and 31 CFR Section 14.1 et seq., for the issuance of an order of this Court which (a) orders that notice of the service of the Formal Written Request for information prepared in compliance with 12 USC §3401 et seq. be delayed for the period of ninety (90) days as provided by statute; (b) directs that notice of the production of documents pursuant to such Formal Written Request be delayed for a period of ninety (90) days as allowed by 12 USC §3409; and (c) that the Ex Parte Application and its supporting documents be sealed until the further order of this Court, or until the expiration of the delay of notice period, whichever occurs first. (2)•The requested financial records are obtainable from the named institution as such institution is a "financial institution" as defined in 12 USC §3401(1). (3)•The requested financial records are discloseable in accord with the terms and provisions of 12 USC §3402(5) which provides in relevant part that: Except as provided by §3403(c) or (d), §3413, or §3414 of this title, no government authority may have access to or obtain copies of, the information contained in the financial records of any customer from a financial institution unless the financial records are reasonably described and such financial records are disclosed in response to a Formal Written Request which meets the requirements of 12 USC §3408 of this title.

Internal Revenue Manual - 9.4.4 Requests for Information (Cont. 2)

(4)•12 USC §3408 permits the government to request and obtain financial records pursuant to 12 USC §3402(5) by means of a "Formal Written Request" where: (a)•no administrative summons or subpoena authority reasonably appears to be available to that governmental authority to obtain the records for the purpose for which they are sought; (b)•the request is authorized by regulations of the requesting agency or department; (c)•there is reason to believe that the records sought are relevant to a legitimate law enforcement inquiry; and (d)•a copy of the request has been served upon or mailed to the customer on or before the date on which the request was made to the financial institution along with a notice which states with reasonable specificity the nature of the law enforcement inquiry. (5)•The United States asserts that in light of the specific nature of the present investigation, there is no administrative summons or subpoena authority existing which is available to the governmental authority on whose behalf this Ex Parte Application is being made. (6)•The Formal Written Request which underlies this Ex Parte Application is authorized by the regulations of the requesting governmental agency or department (31 CFR Section 14.3). (7)•There is reason to believe that the records requested are relevant to a legitimate law enforcement inquiry. "Law enforcement inquiry" is defined in 12 USC §3401(8) as a lawful investigation or official proceeding inquiring into a violation of, or failure to comply with, and criminal or civil statute or any regulation, rule, or order issued pursuant thereto. (8)•As more fully set forth in the affidavit attached to this Ex Parte Application, the law enforcement inquiry involved in this matter relates to violations or potential violations of the following statutes: (STATUTES); and other related offenses. (9)•Pursuant to 12 USC §3409(a), the government may obtain an order permitting the delay of notice to the customer whose records are being sought, such notice being otherwise required, if certain conditions are met:

Internal Revenue Manual - 9.4.4 Requests for Information (Cont. 2)

•(i)•the investigation being conducted is within the lawful jurisdiction of the governmental authority seeking the financial records; •(ii)•there is reason to believe that the records being sought are relevant to a legitimate law enforcement inquiry; and •(iii)•there is reason to believe that such notice, if not delayed, will result in: ••(a)•endangering the life or physical safety of any person; ••(b)•flight from prosecution; ••(c)•destruction of or tampering with evidence; ••(d)•intimidation of potential witnesses; or ••(e)•otherwise seriously jeopardizing an investigation or official proceeding or unduly delaying a trial or ongoing official proceeding. (10)•As defined in 12 USC §3401(3), a "governmental authority" means any agency or department of the United States or any officer, employee, or agent thereof. This Ex Parte Application is being made on behalf of, and at the instance of, a Special Agent of the United States Internal Revenue Service, Criminal Investigation, which is an agency of the Department of the Treasury, being a department of the government of the United States. (11)•In support of this Ex Parte Application, the affiant asserts that the records being sought will establish not only the existence of assets belonging to the above-named parties, but the existence of transactions and/or attempted transactions in violation of the laws of the United States and/or evidence which will help prove violations of other federal statutes. The investigation of those statutes and regulations is within the authority of the Department of the Treasury and the United States Internal Revenue Service, to wit, 18 USC §981, §982, §1956, and §1957; and 31 USC §5313 and §5324.

Internal Revenue Manual - 9.4.4 Requests for Information (Cont. 2)

(12)•The affiant asserts that if a delay of notice is not obtained from this Court, there is a likelihood that evidence may be destroyed or tampered with, and that the investigation will be jeopardized or hindered by the transfer or secretion of assets and/or evidence of violations of the statutes and regulations set forth above. (13)•Based upon the above noted facts, and on the assertions contained in the affidavit in support of this Ex Parte Application, the Plaintiff United States asserts that: (1)•the investigation being conducted is within the lawful authority of the named federal law enforcement agency; and (2)•notice to the named individual(s) would likely result in the destruction or tampering of evidence and would likely result in impeding or jeopardizing the current investigation to the detriment of the government. (14)•Based on the nature of this investigation and on the risk that public disclosure of an investigation would compromise it, the United States also requests that this Court seal this Ex Parte Application, the affidavit filed in support of it, and the Order granting the application until further order of this Court, except of course, for purposes of service of the Order on the named financial institution(s). CONCLUSION AND RELIEF WHEREFORE, the Plaintiff United States respectfully requests that this Honorable Court issue the attached Order.

Respectfully Submitted; (US ATTORNEY) United States Attorney

(AUSA) Assistant United States Attorney

Internal Revenue Manual - 9.4.4 Requests for Information (Cont. 2)

VERIFICATION ••I, (AUSA), an Assistant United States Attorney for the (JUDICIAL DISTRICT), declare that the foregoing Application is based upon information provided to me by agents of the Internal Revenue Service, Criminal Investigation and that said information is, to the best of my knowledge and belief, true and accurate.

_______________ (AUSA) Assistant United States Attorney DATED:•MONTH/DAY/YEAR

Exhibit 9.4.4-4 (12-10-2007) Affidavit of Special Agent
UNITED STATES DISTRICT COURT (JUDICIAL DISTRICT) IN RE:•ORDER TO DELAY NOTICE FOR FINANCIAL PRIVACY ACT INFORMATION AND RECORDS _______________•/

MISC. NO.• ___

AFFIDAVIT SUPPORTING ORDER TO DELAY CUSTOMER NOTICE RELATING TO SERVICE OF FORMAL WRITTEN REQUEST ON FINANCIAL INSTITUTION ••I, •••(SPECIAL AGENT),•••being duly sworn, depose and say as follows: I.

Internal Revenue Manual - 9.4.4 Requests for Information (Cont. 2)

Background of Affiant ••1.•I am a special agent of Criminal Investigation of the Internal Revenue Service and have been so employed for approximately (xx months/ xx years). My responsibilities include the investigation of possible criminal violations of the Internal Revenue laws (Title 26), the Bank Secrecy Act (Title 31), the Money Laundering Control Act (Title 18), and related offenses. ••2.•As a special agent of the Internal Revenue Service, I have received approximately 19 weeks of basic training at the US Treasury Federal Law Enforcement Training Center in Glynco, Georgia. This training covered all aspects of a financial investigation. I have also received advanced training in money laundering investigations and asset forfeitures. I have instructed other agents and government attorneys in money laundering and asset forfeiture. ••3.•I have personally conducted more than (xx) complex financial investigations. I have also participated in the execution of over (xx) search and seizure warrants in the capacity of affiant and/or participant. II. IRS Investigative Jurisdiction ••4.•Authority to investigate possible violations of 31 USC §5324 and 18 USC §1956 and §1957, is delegated to the Criminal Investigation of the Internal Revenue Service. Authority to seize assets under the civil forfeiture proceedings of 18 USC §981, is delegated to the Special Agents of Criminal Investigation. III. Structuring of Currency Transactions to Evade Currency Reporting Requirements

Internal Revenue Manual - 9.4.4 Requests for Information (Cont. 2)

••5.•On or about (EXPLAIN BASIS OF INVESTIGATION/IF CASHIERS CHECKS ARE USED, USE THE FOLLOWING FORMAT) Purchase Date Cashier’s Check # Issuing Bank • • Purchaser Amount

••6.•On (DATE OF FIRST REQUEST IF THERE WAS ONE), records were obtained from the (FINANCIAL INSTITUTION) pursuant to the service of a Formal Written Request as authorized under Title 12 of the United States Code. An examination of these records established that: ••7.•Based on my training and the facts contained herein, I have reason to believe that a violation of (LIST STATUTES) may have occurred and I intend to serve a Formal Written Request on the ( FINANCIAL INSTITUTION) IN ORDER TO DETERMINE THE SOURCE OF THE FUNDS AND ANY OTHER IDENTIFYING OR TRANSACTIONAL INFORMATION RELATIVE TO (ASSOCIATE OR SUBJECT ). The acquisition of this information is necessary to document probable cause for seizure and forfeiture under 18 USC §981(a)(1)(A), except where such seizure would have a Title 31 predicate, and/or to establish a violation under Title 18 or 31 of the United States Code. ••8.•I have reason to believe that providing notice of the service of this Formal Written Request to (CUSTOMER’S NAME) (as required by 12 USC §3408(4)(A)) will seriously jeopardize the criminal case and likelihood of a successful seizure and forfeiture under 18 USC, §981(a)(1)(A). During the 10-day waiting period required under 12 USC §3408(4)(B), the involved parties could easily divest themselves of the property and conceal the proceeds from the sale. ••9.•I respectfully request that the Court grant an Order to Delay Notice relating to service of this Formal Written Request on the (FINANCIAL INSTITUTION) for records and testimony relative to this investigation (as authorized by 12 USC §3409).

Internal Revenue Manual - 9.4.4 Requests for Information (Cont. 2)

•10.•I further request that the Court issue an order to the (FINANCIAL INSTITUTIONS()) commanding production of the requested records and prohibiting their officers, employees, and agents from providing notice to any customers whose records are the subject of the Formal Written Requests for a period of ninety (90) days. •11.•I further request the Court Order, the Ex Parte Application and its supporting documents, be sealed until further order of this Court or until the expiration of the delay of notice period, whichever occurs first.

________________ (SPECIAL AGENT) Special Agent, Criminal Investigation Internal Revenue Service

Subscribed and sworn to before me this __•(xx)day of ___•(month),20xx•.

_________________ U.S. Magistrate Judge/District Judge (JUDICIAL DISTRICT)

Exhibit 9.4.4-5 (12-10-2007) Ex Parte Order to Delay Notice and Order to Seal Ex Parte Application
UNITED STATES DISTRICT COURT (JUDICIAL DISTRICT)

Internal Revenue Manual - 9.4.4 Requests for Information (Cont. 2)

IN RE:•ORDER TO DELAY NOTICE FOR FINANCIAL PRIVACY ACT INFORMATION/RECORDS _______________•/

MISC. NO.

EX PARTE ORDER TO DELAY NOTICE AND; ORDER TO SEAL EX PARTE APPLICATION •This matter has come before this Court pursuant to the Ex Parte Application of the Plaintiff United States requesting the entry of an Order by this Court which: (1)•orders that notice of the service of one or more Formal Written Requests for information prepared in compliance with 12 USC §3401 et. seq. be delayed for the period of ninety (90) days as provided by statute; (2)•directs that notice of the production of documents pursuant to such Formal Written Request be delayed for a period of ninety (90) days as allowed by 12 USC §3409; and (3)•that the Ex Parte Application and its supporting documents be sealed until the further order of this Court, or until the expiration of the delay of notice period, whichever occurs first. •This Court, having read the Ex Parte Application and its supporting affidavit, having reviewed the Formal Written Request, being familiar with the statute under which this Order is sought, having found that the investigation being conducted is within the lawful authority of the governmental authority seeking the information, and that there is no administrative summons or subpoena authority available to acquire the requested information, finds there does exist reason to believe the records requested are relevant to a legitimate law enforcement inquiry, and there exists reason to believe notice of such document request and of any production of documents pursuant to it will likely result in the destruction of, or tampering with, evidence, and/or will otherwise seriously jeopardize or impede an investigation. •IT IS HEREBY ORDERED THAT service of the Formal Written Request for information be delayed for ninety (90) days.

Internal Revenue Manual - 9.4.4 Requests for Information (Cont. 2)

•IT IS FURTHER ORDERED THAT the named financial institution, its officers, employees, and agents shall not provide notice to any customer(s) whose records are the subject of the Formal Written Request, either of the service of that request, or of the production of any such documents or information pursuant to that request, or of the existence of this order, for a period of ninety (90) days from the date of this order. •IT IS FURTHER ORDERED THAT the Ex Parte Application and all related documents shall be sealed from public view until the further order of this Court, or until the expiration of the delay of notice period, excepting the service of this Order and the Formal Written Request to which it applies on the involved financial institution. __________________ UNITED STATES MAGISTRATE JUDGE/DISTRICT JUDGE DATED:• ______________

Exhibit 9.4.4-6 (12-10-2007) Ex Parte Application for Extension of Delay of Notice and Order Sealing Documents
UNITED STATES DISTRICT COURT (JUDICIAL DISTRICT) IN RE:•ORDER TO DELAY NOTICE FOR FINANCIAL PRIVACY ACT INFORMATION/ RECORDS, EXTENSION OF DELAY

MISC. NO.

EX PARTE APPLICATION FOR EXTENSION OF DELAY OF NOTICE AND ORDER SEALING DOCUMENTS

Internal Revenue Manual - 9.4.4 Requests for Information (Cont. 2)

•NOW COMES the UNITED STATES OF AMERICA , Plaintiff, (United States Attorney), by (AUSA), Assistant United States Attorney and, in support of this Motion, states that: •1.•On (DATE OF ORDER) the United States presented an Ex Parte Application and Affidavit in support thereof, to the United States District Court for the (JUDICIAL DISTRICT ) seeking the entry of any order directing compliance by ( FINANCIAL INSTITUTION) with a Formal Written Request issued pursuant to 12 USC §3401, et seq. •2.•On (DATE) US Magistrate Judge/District Judge (NAME), having reviewed the Ex Parte Application and the Affidavit in support thereof, entered an order providing notice to the customer of the financial institution would be delayed for a period of ninety (90) days as provided by statute. 12 USC §3409(a)(1), (2), and (3)(C) and (E) provides for such delay where: the investigation being conducted is within the lawful jurisdiction of the governmental authority seeking the financial records; there is reason to believe that the records being sought are relevant to a legitimate law enforcement inquiry; and there is reason to believe that such notice, if not delayed, will result in; (a) endangering life or physical safety of any person; (b) flight from prosecution; (c) the destruction or tampering with evidence; (d) intimidation of potential witnesses; or (e) otherwise seriously jeopardize an investigation or official proceeding or unduly delaying a trial or ongoing official proceeding.

(i)

(ii)

(iii)

Internal Revenue Manual - 9.4.4 Requests for Information (Cont. 2)

•3.•The investigation being conducted by the Internal Revenue Service, Criminal Investigation, is not complete at this time. Records and information obtained from the Formal Written Request will assist in the investigation of (NAME OF SUBJECT) in the (JUDICIAL DISTRICT). The named individual has been identified through the investigation as being directly or indirectly involved in the (STRUCTURING OF MONETARY INSTRUMENTS OR MONEY LAUNDERING). •4.•12 USC §3409(b)(2) of the Right to Financial Privacy Act provides that the Court may grant extensions of the delay of notice, of up to ninety (90) days each, upon application of the United States, when such extension is in accordance with 12 USC §3409(b). •5.•Based on the continuing nature of this investigation, the progress made to this point, the likelihood that further investigation will result in the identification of other persons involved in violations of federal currency and money laundering laws, and in the gathering of sufficient evidence and information to support a civil forfeiture action and or criminal indictment, the United States requests that this Court extend the delay period for an additional ninety (90) days and continue to seal all documents related to this matter. CONCLUSION AND RELIEF •WHEREFORE, the Plaintiff United States respectfully requests that this Honorable Court enter the Order submitted with this Ex Parte Application. Respectfully submitted,

(US ATTORNEY) United States Attorney

Internal Revenue Manual - 9.4.4 Requests for Information (Cont. 2)

(AUSA) Assistant United States Attorney (ADDRESS) Dated: VERIFICATION •I, (AUSA) an Assistant United States Attorney for the (JUDICIAL DISTRICT), declare that the foregoing Application is based upon information provided to me by agents of the Internal Revenue Service, Criminal Investigation, and that said information is, to the best of my knowledge and belief, true and accurate. _________________ Assistant US Attorney Dated: VERIFICATION •I, (SPECIAL AGENT NAME), a special agent for the Internal Revenue Service, Criminal Investigation; declare that the foregoing Application is based upon information gathered by me, and that said information is, to the best of my knowledge and belief, true and accurate. _________________ (SPECIAL AGENT NAME) Dated:

Exhibit 9.4.4-7 (12-10-2007) Order Extending Delay of Notice and Order to Seal
UNITED STATES DISTRICT COURT (JUDICIAL DISTRICT)

Internal Revenue Manual - 9.4.4 Requests for Information (Cont. 2)

IN RE:•ORDER TO DELAY NOTICE FOR FINANCIAL PRIVACY ACT INFORMATION/ RECORDS: EXTENSION OF DELAY ORDER EXTENDING DELAY OF NOTICE AND ORDER SEALING DOCUMENTS •This matter has come before this Court pursuant to the Ex Parte Application of the Plaintiff United States requesting the entry of an order by this Court which: (1) directs that notice of the service of Formal Written Request prepared and or obtained in accordance with 12 USC §3401 et seq., by the Internal Revenue Service, Criminal Investigation, be delayed for an additional ninety (90) day period; (2) directs that notice of production of documents pursuant to each Formal Written Request be delayed for an additional ninety (90) day period; and (3) directs that all pleadings related to this matter remain sealed until further order of this Court. •This Court, having read the Ex Parte Application, being familiar with this matter, and having found that the continuing investigation being conducted is within the lawful authority of the governmental authority seeking the information, finds that there does exist reason to believe that the records requested are relevant to a legitimate law enforcement inquiry, and that there exists reason to believe that notice of such document request and of the production of any records pursuant to it will likely result in the destruction of, or tampering with, evidence, in the removal or hiding of assets potentially subject to seizure and forfeiture, and/or will otherwise seriously jeopardize or impede the continuing investigation. IT IS HEREBY ORDERED THAT service of the Formal Written Request for information be delayed for an additional period of ninety (90) days to wit, and that the delay of notice period be extended until (90 DAYS FROM DATE OF ORDER).

Internal Revenue Manual - 9.4.4 Requests for Information (Cont. 2)

•IT IS FURTHER ORDERED THAT neither the financial institution(s) served with the original Formal Written Request, nor their officer, employees, and agents shall provide notice to any customer(s) whose records have been requested either of the service of the request or of the production of any such documents or information pursuant to that request for an additional period of ninety (90) days to wit, and that the delay of notice period is extended until (90 DAYS FROM DATE OF ORDER). •IT IS FURTHER ORDERED THAT this Ex Parte Application and all related documents shall be sealed until the further order, of this Court, except for the service of this Order on the involved financial institution(s). ____________________ UNITED STATES MAGISTRATE JUDGE/DISTRICT JUDGE (NAME) Entered:

Exhibit 9.4.4-8 (12-10-2007) Ex Parte Application for Nunc Pro Tunc Extension of Delay of Notice and Order Sealing Documents
UNITED STATES DISTRICT COURT (JUDICIAL DISTRICT) IN RE:•ORDER TO DELAY NOTICE FOR FINANCIAL PRIVACY ACT INFORMATION/ RECORDS: EXTENSION OF DELAY

• MISC. NO.

EX PARTE APPLICATION FOR NUNC PRO TUNC EXTENSION OF DELAY OF NOTICE AND ORDER SEALING DOCUMENTS

Internal Revenue Manual - 9.4.4 Requests for Information (Cont. 2)

•NOW COMES the UNITED STATES OF AMERICA, Plaintiff, (US ATTORNEY), United States Attorney, by (AUSA), Assistant United States Attorney and, in support of this Motion, states that: •1.•On (DATE OF ORIGINAL ORDER) the United States presented an Ex Parte Application and Affidavit, in support thereof, to the United States District Court for the ( JUDICIAL DISTRICT) seeking the entry of any order directing compliance by (FINANCIAL INSTITUTION) with a Formal Written Request issued pursuant to 12 USC §3401 et. seq. •2.•On (DATE), US Magistrate Judge/District Judge (NAME), having reviewed the Ex Parte Application and the Affidavit in support thereof, entered an order directing that the providing of notice to the customer of the financial institution would be delayed for a period of (90) days as provided by statute. 12 USC §3409(a)(1), (2), and (3)(c) and (e) provides for such delay where: the investigation being conducted is within the lawful jurisdiction of the governmental authority seeking the financial records; there is reason to believe that the records being sought are relevant to a legitimate law enforcement inquiry, and there is reason to believe that such notice, if not delayed, will result in, (a) endangering life or physical safety of any person; (b) flight from prosecution; (c) the destruction or tampering with evidence; (d) intimidation of potential witnesses; or (e) otherwise seriously jeopardize an investigation or official proceeding or unduly delaying a trial or ongoing official proceeding.

(i)

(ii)

(iii)

•3.•(USE THIS PARAGRAPH IF OTHER DELAYS WERE OBTAINED )

Internal Revenue Manual - 9.4.4 Requests for Information (Cont. 2)

•••On (DATE), US Magistrate Judge/District Judge, having reviewed an Ex Parte Application for Extension Of Delay of Notice and Order Sealing Documents, entered an Order Extending Delay Of Notice and Order To Seal, extending the delay of notice until (DATE). •4.•The criminal investigation being conducted by the Internal Revenue Service, Criminal Investigation is not complete at this time. Records and information will assist in the investigation of money laundering and other related offenses in the (JUDICIAL DISTRICT). •5.•As set forth above, the Right to Financial Privacy Act provides that the United States may seek a delay of notice of the issuance of the Formal Written Request for a period of ninety (90) days (12 USC §3409(b)). •6.•Based on the continuing nature of this investigation, the progress made to this point, the likelihood that further investigation will result in the identification of other persons involved in violations of federal currency and money laundering laws, the gathering of sufficient evidence and information to support a civil forfeiture action and/or criminal indictment, and on the fact that notice of the existence of this Formal Written Request would provide some disclosure of information contained in those affidavits and adversely affect the investigation, the United States requests that this Court nunc pro tunc extend the delay period for an additional ninety (90) days and continue to seal all documents related to this matter. CONCLUSION AND RELIEF •WHEREFORE, the plaintiff United States respectfully requests that this Honorable Court enter the Order submitted with this Ex Parte Application. Respectfully submitted,

Internal Revenue Manual - 9.4.4 Requests for Information (Cont. 2)

(US ATTORNEY) United States Attorney (AUSA) Assistant United States Attorney (ADDRESS) Dated: VERIFICATION •I, (AUSA), an Assistant United States Attorney for the ( JUDICIAL DISTRICT), declare that the foregoing Application is based upon information provided to me by agents of the Internal Revenue Service, Criminal Investigation and that said information is, to the best of my knowledge and belief, true and accurate. _________________ (AUSA) Dated: VERIFICATION •I, (SPECIAL AGENT), a Special Agent for the Internal Revenue Service, Criminal Investigation, declare that the foregoing Application is based upon information gathered by me or at my direction and that said information is, to the best of my knowledge and belief, true and accurate. _________________ (NAME) Dated:

Exhibit 9.4.4-9 (12-10-2007)

Internal Revenue Manual - 9.4.4 Requests for Information (Cont. 2)

Notice to the Customer
Department of the Treasury Criminal Investigation Internal Revenue Service Washington, DC 20224 (Date) Name Address City, State, Zip Code

Dear•••••: Records or information concerning your accounts and/or transactions, which are held by the financial institution named in the attached process or request, were supplied to the Internal Revenue Service pursuant to the service of the attached Formal Written Request(s) on (DATE). Notification was withheld pursuant to a determination by the (TITLE OF COURT SO ORDERING) under the Right to Financial Privacy Act of 1978, 12 USC §3401–§3422. The Internal Revenue Service requested that notice be withheld because issuance of such notice(s) may have impeded the investigation. The purpose of the investigation was to inquire into potential violations of _________•. Sincerely,

(Name of SAC) Special Agent in Charge Criminal Investigation Attachment(s)

Exhibit 9.4.4-10 (12-10-2007) Official Request for Financial Records Related to Investigation of

Internal Revenue Manual - 9.4.4 Requests for Information (Cont. 2)

Terrorism
Department of the Treasury Criminal Investigation Internal Revenue Service Washington, DC 20224 (Date) Custodian of Records NAME OF FINANCIAL INSTITUTION ADDRESS CITY, STATE ZIP Official Request for Financial Records Related to the Investigation and Analysis of International Terrorism Dear Custodian of Records: This serves as an official request by this agency to your financial institution for the production of the records described in the attachment to this letter. You must produce the records to Special Agent (NAME) at (LOCATION) by (DATE), or at such other place and time as you arrange with Special Agent (name)'s consent. You may reach Special Agent (NAME) at (TELEPHONE NO.). Please note that with the amendments enacted by the USA PATRIOT Act of 2001, Pub. L. No. 107–56, 115 Stat, 327 (2001), which was signed by the President on October 26, 2001, the Right to Financial Privacy Act, 12 USC §3401 et seq., no longer requires a subpoena or court order to obtain financial records in investigations related to international terrorism. The Right to Financial Privacy Act now provides that, with very limited exceptions, none of its provisions applies to a request from:

IN RE:

Internal Revenue Manual - 9.4.4 Requests for Information (Cont. 2)

a Government authority authorized to conduct investigations of, or intelligence or counterintelligence analysis related to, international terrorism for the purpose of conducting such investigations or analysis. The request contained in this letter for the documents described in the attachment falls within 12 USC §341(a)(1)(C). I certify, in accordance with 12 USC §3403(b) and §3414(a)(2), that in making this request this agency has complied with the applicable provision of the Right to Financial Privacy Act. Please note also the Right to Financial Privacy Act, 12 USC §3414(a)(3), forbids your financial institution, and any officer, employee, or agent of your financial institution, from disclosing to anyone, including particularly a customer whose records are sought, that a government authority has sought or obtained access to a customer's financial records. Any such disclosure could jeopardize this important investigation. Your financial institution may be entitled to reimbursement for certain expenses incurred in responding to this request for records, where the customer is an individual or a partnership of five or fewer individuals. See 12 C.F.R. pt.219. In order to obtain payment, you must submit an itemized bill or invoice to the following address:(ADDRESS). If you anticipate that the reimbursable cost of complying with this request will exceed $500, please contact Special Agent (NAME) before incurring such expenses. If you have any questions concerning this request, please contact Special Agent (NAME) at the telephone number provided above. Very truly yours, (NAME) Director, Field Operations (ADDRESS) Attachments:•(x) More Internal Revenue Manual Accessibility | Freedom of Information Act | Important Links | IRS Privacy Policy | USA.gov | U.S. Treasury

Internal Revenue Manual - 9.4.5 Interviews

Chapter 4. Investigative Techniques Section 5. Interviews

9.4.5 Interviews
q q q q q q q q q q

9.4.5.1 Overview 9.4.5.2 Definitions 9.4.5.3 Purpose 9.4.5.4 Authority 9.4.5.5 Preparation and Planning 9.4.5.6 Conduct During Interview 9.4.5.7 Record of Interview 9.4.5.8 Right to Record Interview 9.4.5.9 Preserving the Record of Interview 9.4.5.10 Processing Record of Interview

9.4.5.1 (02-01-2005) Overview
1. This section covers the definition of, purpose for and authority to conduct interviews. The section also discusses preparing for and observing the rights of witnesses and prospective defendants during an interview.

9.4.5.2 (02-01-2005) Definitions
1. An interview is a meeting between two or more persons for the purpose of obtaining information. Interviews usually involve a formal consultation or interrogation for the purpose of resolving or exploring issues. 2. An interrogation is an interview in which a person is questioned to obtain information. 3. A conference is an exchange of views. Often a conference includes an interrogation to obtain details of a person's views and contentions.

Internal Revenue Manual - 9.4.5 Interviews

9.4.5.3 (02-01-2005) Purpose
1. Interviews are used to obtain leads, develop information and establish evidence. The testimony of witnesses and the confessions or admissions of alleged violators are major factors in resolving tax investigations. 2. Investigations are presented to a jury through the testimony of witnesses. Therefore, it is the special agent's duty to timely interview the subject and witnesses connected with the investigation.

9.4.5.4 (02-01-2005) Authority
1. Title 26 USC §7602—Authorizes the Secretary or his/her delegate to examine books and records and to take testimony under oath. 2. Delegation Order No 25-1 (formerly Delegation Order No 4) authorizes a special agent to issue and serve summonses, examine books and records, question witnesses and take testimony under oath. 3. The Special Agent in Charge (SAC), in assigning an investigation originating from a source other than a referral from other operating divisions, may authorize a special agent to interview the subject, the subject's representative, the subject's present employees and/or to inspect the subject's books and records. The SAC may authorize a special agent to make these inquiries independently or request the cooperation of a revenue agent or revenue officer, as appropriate, to assist in making the inquiries. When the services of a cooperating agent are necessary, the SAC will forward a request to the appropriate operating division. The other operating divisions will assign an employee for the purpose requested within 30 days. 4. A further discussion of a special agent's authority is contained in IRM 25.5, Summons.

9.4.5.5 (02-01-2005) Preparation and Planning
1. Since there may only be one opportunity to interview the subject or witness, thorough preparation and planning of the initial interview is necessary to ensure that the maximum amount of information is obtained.

Internal Revenue Manual - 9.4.5 Interviews

9.4.5.5.1 (02-01-2005) Preparation
1. Prior to the interview of any subject or witness, the interviewer should take the following steps: A. Determine the purpose for questioning the person. B. Prepare an outline with sufficient detail to obtain the desired information. C. Review all available information. D. Organize the interview file. E. Obtain the original tax returns if the interview involves the subject, the subject's representative, the preparer of the return, the subject's present employees, or if inspecting the taxpayer's books and records.

Note:
The original income tax return may only be shown to the subject, the subject’s representative or the preparer of the return (See IRM 9.3.1, Disclosure).

9.4.5.5.1.1 (03-14-2002) Determine the Interview's Purpose
1. In planning for an interview, the special agent needs to determine the purpose for questioning the subject or witness. Each interview will have specific goals unique to the subject or witness being interviewed.

9.4.5.5.1.2 (02-01-2005) Prepare Outline
1. The amount of detail in the outline will vary depending upon the experience of the special agent and the complexity of the investigation. The outline should contain only information that is relevant and material. Extraneous matter should be excluded because it may be confusing and could adversely affect the end result. Important topics should be highlighted or underscored and related topics should be listed in their proper sequence. A portion of a suggested outline is shown in Exhibit 9.4.5–1, Suggested Outline for Questioning Person Who Prepared Returns, If Other Than Subject. Specific questions should be kept to a minimum, since they tend to reduce the flexibility of the questioner. In addition to the topics to be discussed, the outline should include

Internal Revenue Manual - 9.4.5 Interviews

the following, if applicable: A. identification of the subject/witness B. information to be given to the subject/witness about his/her constitutional rights C. administration of the oath D. purpose of the interview E. questions showing that the subject/witness was not threatened or intimidated in any manner, and that statements were made freely and voluntarily without duress or any promises whatsoever

9.4.5.5.1.3 (03-14-2002) Review Available Information
1. Prior to any interview, review all the information and data gathered relating to the investigation. The information can be divided into three general categories: A. information that can be documented, but need not be discussed B. information that can be documented, but needs to be discussed C. information that must be developed by testimony

9.4.5.5.1.4 (02-01-2005) Organize Interview File
1. The interview file should contain only data or information arranged in the order it is to be discussed or covered in the interview. The less data the special agent has to consider during the interview, the easier it is to vary the line of questioning. Delays in questioning caused by searching for a document in a voluminous file can be distracting and cause confusion. While the files should contain sufficient data to cover all the matters under discussion, they should not become unwieldy.

9.4.5.5.1.5 (02-01-2005) Obtain Original Tax Returns

Internal Revenue Manual - 9.4.5 Interviews

1. The special agent must have custody of the original return or returns involved, if any were filed for the pertinent period, as a prerequisite to inspecting the subjects book and records and/or independently interviewing: A. the subject B. the subject's representative C. the subject's present employees if the investigation involves employment tax returns, or D. the preparer of the return . 2. Exceptions may be made in situations where an examination is extended to include taxable periods for which the original return is not available and the examination is based on the subject's retained copy, or where such action is approved by the Supervisory Special Agent (SSA).

Note:
The original income tax return may only be shown to the subject, the subject’s representative or the preparer of the return (See IRM 9.3.1.3.1, Interviews) 3. The procedure outlined above is limited to a subject's own tax matters and does not apply to an inquiry where a special agent is merely securing information from another person not under tax investigation, but who has engaged in transactions with the subject or has data relevant to the tax liability under inquiry.

9.4.5.5.2 (02-01-2005) Planning
1. The following factors are important considerations when planning for a successful interview. They are: A. timing—proper timing of the interview is essential to obtain information that is material for the development of an investigation B. suitable surroundings—make arrangements for suitable surroundings that will facilitate the interview process

Internal Revenue Manual - 9.4.5 Interviews

C. persons present – the number of persons present during the interview may affect the ability to conduct an effective interview. For example, the interview of the subject and his/her spouse might be more effective if conducted separately.

9.4.5.6 (02-01-2005) Conduct During Interview
1. During the course of the interview, be adaptable and flexible, follow through on questions asked, and ensure that the basic questions such as who, what, where, when, how, and why have been addressed. Special agents will refrain from characterizing investigations as " criminal" except for the initial interview of the subject in an administrative investigation or in those instances where this disclosure is necessary to obtain the information sought. Such a disclosure could be necessary if the witness is disinclined to cooperate. 2. Criminal Investigation has an interest in conducting its investigations discretely to avoid unnecessary embarrassment to the subject. Adhering to these procedures will help achieve this goal. Routine investigative inquiries often can be made with minimum disclosure of information. A. For example, if a special agent contacts a neighbor to learn if a witness resides at a particular address, it is often not necessary to disclose that they are a special agent conducting a criminal investigation to obtain the information. The exercise of appropriate discretion when contacting potential witnesses is the hallmark of professionalism.

9.4.5.6.1 (02-01-2005) Adaptability and Flexibility
1. The special agent should keep an open mind receptive to all information, and be prepared to develop that information. If the interviewer is not flexible, a great deal of time may be wasted and unnecessary questions may be asked, resulting in a voluminous statement of little or no value. A carefully planned outline will provide enough flexibility to cope with any situation that may occur and permit the development of any leads that may arise. Rigid adherence to notes or an outline will seriously limit flexibility. The outline and data should serve only as aids, rather than substitutes for original and spontaneous questioning.

9.4.5.6.2 (02-01-2005) Follow Up
1. The special agent should follow up on every pertinent lead and every incomplete answer. Questioning should continue until all reasonably expected information is obtained from the witness. Incomplete answers have little or no value.

Internal Revenue Manual - 9.4.5 Interviews

2. The following suggestions will help the special agent follow up on potential leads and obtain answers that are complete and accurate: A. use short questions confined to one topic that can be clearly and easily understood B. ask questions requiring narrative answers; whenever possible avoid asking questions that only require a yes/no answer C. avoid questions that suggest part of the answer, i.e., leading questions D. ask witnesses for the factual basis for answers provided E. be alert to prevent the witness from aimlessly wandering; when possible, require a direct response F. keep the witness focused on questions asked; do not allow the witness to confuse issues and leave questions unanswered G. concentrate more on the answers given by the witness than on formulating the next question to be asked H. have a clear understanding of each answer and eliminate any confusion before proceeding to the next question I. when all important points have been resolved, terminate the interview; if possible, leave the door open for further meetings with witness

9.4.5.6.3 (02-01-2005) Basic Questions
1. The special agent should address the following basic questions: A. Who?—Complete identification should be made of all persons referred to during the interview. This includes the following identification factors: description, address, any known aliases, doing business as, trading as, also known as, citizenship, reputation, and known associates. If the person cannot be identified by name, a physical description should be requested and should include the following: age, height, weight, color of eyes, hair, skin, description of build, clothing, unusual markings, scars and mental or physical defects. Questions should also cover any aids worn by the individual, such as glasses, hearing aid, dentures, wig or toupee, cane, braces, or other items.

Internal Revenue Manual - 9.4.5 Interviews

B. What?—Obtain complete details as to what happened. Questions should relate to events, methods, and systems. Trace the event from its inception to its ultimate termination to develop the answer completely. For example, a sale starts with a customer placing an order, either orally or in writing, and terminates when the payment is ultimately placed in some depository. Every detail concerning what happened to the sale and what happened to every book, record, document, or person connected with it should be determined. C. Where?—Obtain complete details regarding the location of books, records, assets, bank and brokerage accounts, witnesses, clients, customers, safe deposit boxes, safes, etc. A description of the location should include the general area, as well as the identification of the person who has custody and control of the item. A complete description of the place should include the size, shape, color, and location. D. When?—The time can be established by direct questioning, by relating the incident to some known event, or by associating the event to some person, place, or thing. E. How?—Obtain complete details about how the event occurred or how the operation was conducted. How did the subject acquire knowledge? Was it through seeing, hearing, feeling, smelling, or the performance of his/her duties? How were transactions recorded: written, typed, matching entries, other? F. Why?—Determine the motive for an action by questioning the witness about his/her behavior. Find out what and who caused the witness to act. Ask how he/she was motivated to act. Special consideration should be given to these questions since they may be important in the development of intent items, especially when relating to or reflecting an evil purpose.

9.4.5.6.4 (02-01-2005) Maintain Control
1. The special agent will maintain full control of the interview. Each participant will be limited to the rights, duties, and privileges he/she is entitled to at the interview. Any deviation should be corrected immediately by informing the individual of his/her role and preventing him/her from going beyond it. If complete control of the interview cannot be maintained, the special agent should end the interview and arrange to continue when the situation is corrected. The record should show all attempts to correct the individual's improper conduct, as well as the reasons for terminating the interview before completion. The special agent will inform all persons of the reason they are present at the interview. The activities of the participants will be confined to the roles indicated.

9.4.5.6.4.1 (02-01-2005)

Internal Revenue Manual - 9.4.5 Interviews

Role of Subject
1. The subject's role is to answer questions and provide any explanations as appropriate. The special agent will encourage the subject to tell his/her side of the investigation. Under the Fifth Amendment to the Constitution the subject has the right to refuse to answer any question that he/she feels may incriminate him/her. This constitutionally protected right can only be invoked by the subject. 2. The subject of the investigation should be interviewed expeditiously after the initiation of the criminal investigation. The reason for delaying the initial interview of the subject will be documented in the investigative file.

9.4.5.6.4.2 (02-01-2005) Role of Witness
1. The witness must comply with every legal and reasonable request made by the special agent. The witness, however, has a right to refuse the request if, by answering the question, the information would tend to incriminate him/her. This right cannot be invoked on the grounds that the information will incriminate someone else. (See subsection 9.4.5.12, Immunity and Compulsion Orders.)

9.4.5.6.4.3 (02-01-2005) Role of Special Agent
1. The special agent should question the subject about any matters relevant to the investigation, unless the special agent feels that it would be to the government's disadvantage to ask questions that would reveal particular information. The special agent is responsible for the development of evidence and will conduct the interview in any manner deemed appropriate. If the special agent grants permission to a cooperating agent to question the subject, the special agent should instruct the cooperating agent in the method and technique to be used. 2. The special agent should attempt to expeditiously interview the subject during the course of an investigation to obtain all available information and should give the subject every opportunity to explain participation in the alleged criminal violation. When possible, there should be at least two investigating officers, or one officer and an IRS stenographer, at every interview. 3. The special agent must be cautious to avoid making statements of any kind in discussion with the subject or his/her representative that might be construed to compromise any criminal components of the investigation. 4. The special agent should interview all key witnesses in a timely manner. When possible, there

Internal Revenue Manual - 9.4.5 Interviews

should be at least two investigating officers at every interview. However, if the interview involves a third party recordkeeper with no personal knowledge regarding the subject, then the interview may be conducted by one special agent. 5. When interviewing witnesses, the special agent must remain objective and refrain from making comments regarding the subject that could be construed as derogatory. 6. When a special agent determines that an interview with a juvenile is necessary, the special agent should seek the advice of Criminal Tax (CT) Counsel.

9.4.5.6.4.4 (02-01-2005) Role of Cooperating Agent
1. The revenue agent or revenue officer may assist the special agent whenever any tax or technical accounting issues arise during an interview. The cooperating agent should not question the witness until he/she has discussed the matter with the special agent.

9.4.5.6.4.5 (06-30-1998) Role of Accountant Representative
1. The accountant's duty is to assist the client in all bookkeeping and accounting matters.

9.4.5.6.4.6 (02-01-2005) Role of Legal Representative
1. The attorney has a duty to furnish legal advice to the client relating to any matter discussed. This is the attorney's principal function at an interview.

9.4.5.6.4.7 (02-01-2005) Role of Recorder
1. The recorder's function is to prepare a permanent record of the interview. A mechanical or electronic recording device may be used in conjunction with the recorder or in lieu of a recorder, provided all parties to the proceeding have consented to the device's use.

9.4.5.7 (02-01-2005) Record of Interview
1. The principal purpose of an interview is to obtain all the facts necessary to develop the

Internal Revenue Manual - 9.4.5 Interviews

investigation and resolve questions. It is necessary to prepare a permanent record of every interview and contact. The record should memorialize facts pertinent to an investigation to be preserved for future use. The record will also contain the manner in which the special agent identified himself/herself and should indicate that the subject was advised of his/her constitutional rights. 2. Further, when the special agent believes it is necessary to make a more explicit disclosure of the criminal nature of the investigation, the reasons for making this additional disclosure will also be documented. 3. The record of interview will usually take one of the following forms: A. Affidavit, Exhibit 9.4.5–2 B. Statement, Exhibit 9.4.5–3 C. Question and Answer Statement, Exhibit 9.4.5–4 D. Memorandum of Interview, Exhibit 9.4.5–5 E. Informal Notes or Diary Entries, Exhibit 9.4.5–6

9.4.5.7.1 (02-01-2005) Affidavit
1. An affidavit is a written or printed declaration or statement of facts voluntarily made and confirmed by the oath or affirmation of the party making it before an officer having authority to administer such oath. No particular form of affidavit is required at common law. It is customary, however, that affidavits contain a caption or title, the judicial district in which given, the signature of the affiant and the jurat, which properly includes authentication. Exhibit 9.4.5–2 is a suggested format containing all these characteristics.

Note:
The authority to administer oaths is not delegated to Tax Fraud Investigative Aides (TFIAs). (See IRM 1.2.2, Delegations of Authority (Delegation Order No 25-1) and IRM 25.5.1, Introduction).

9.4.5.7.2 (02-01-2005) Statement

Internal Revenue Manual - 9.4.5 Interviews

1. A statement is a declaration of matters of fact. Although the term has come to be used for a variety of formal narratives of facts required by law, it is in a limited sense, a formal, exact, detailed presentation of the facts. The statement may be prepared in any form and should be signed and dated by the person preparing it. If possible, the witness should also sign the statement and signify that they read and understood it or that it was read to them. A statement (Exhibit 9.4.5–3) generally contains the comments and remarks of the witness and is used whenever it is not feasible to place the witness under oath, e.g., an affidavit, without the affiant's oath, is essentially a statement.

9.4.5.7.3 (02-01-2005) Question and Answer Statement
1. A question and answer statement: A. is a complete transcript of the questions, answers, and statements made by each participant at an interview, and B. may be prepared from the recorder's notes or from a mechanical or electronic recording device 2. If no stenographer is readily available, mechanical or electronic recording devices may be used to record statements by advising the witness, in advance, of the use of the device (implied consent). The source used to prepare the transcript should be preserved and associated with the investigative file because it may be needed in court to establish what was said. The transcript (Exhibit 9.4.5–4) should be prepared on letter-sized plain, bond paper with each question consecutively numbered and should contain the following: A. the time and place where the testimony is obtained B. the names and titles of all persons present, including any attorneys or accountants present to assist the witness, also the reason for each person being present, if not self-evident C. name and title of the person asking questions and the person giving answers D. the name and address of each person giving testimony E. the matter to which the testimony relates F. purpose of interview G. information given to the witness concerning his/her rights relating to self-incrimination

Internal Revenue Manual - 9.4.5 Interviews

and counsel, if appropriate H. administration of oath (See IRM 1.2.2 (Delegation Order No 25-1) and IRM 25.5.1) I. questions and answers establishing that the statement was made freely and voluntarily, without duress, and that no promises or commitments were made by the special agents J. an offer to allow witness to make any statement for the record, and, if advisable, an opportunity to examine and to sign the transcript K. the jurat: the officer who administers the oath should complete the jurat; it is preferable, but not essential, to have the same officer who interviewed the witness complete the jurat L. signatures of any government witnesses present M. signature and certificate of person preparing the statement, showing the source of the original information used to prepare it N. if the statement is mechanically or electronically recorded, include a statement of consent

9.4.5.7.3.1 (02-01-2005) Off-Record Discussions
1. Off-record discussions should not be permitted during a recorded interview of a subject. If an offrecord discussion takes place during a recorded interview of a witness, it must be kept to a minimum.

9.4.5.7.4 (02-01-2005) Memorandum of Interview
1. A memorandum of interview is an informal note or document containing information that the person desires to memorialize. It is a record of what occurred at the interview and usually is in the format shown in Exhibit 9.4.5–5. A final typed memorandum of interview should be prepared without undue delay and include the following: A. the interview's date, time, place, and roster of persons present, as well as what transpired B. manner in which the special agent identified himself/herself C. whether the witness was advised of his/her constitutional rights during the interview

Internal Revenue Manual - 9.4.5 Interviews

D. testimony, evidence, and leads obtained during the interview E. signatures of the special agents who were present at the interview, and the date the memorandum was signed F. the actual date of the memorandum's preparation placed at the bottom of the memorandum (see Exhibit 9.4.5–5) 2. The memorandum should report the information developed during the interview and be free of opinions, conclusions, and extraneous material.

9.4.5.7.4.1 (02-01-2005) Prior to Preparation of Record of Interview
1. Facts pertinent to an investigation developed during an interview, interrogation, or conference should be reduced to writing and memorialized in an affidavit, statement, question and answer statement, or memorandum of interview. Any apparent differences of recollection between the investigating officers as to what was said should be resolved as soon after the interview, interrogation, or conference as possible, before completion of the memorandum. 2. Copies of key interviews are to be forwarded to the Supervisory Special Agent (SSA) for review and inclusion in the administrative investigative file. Key interviews include contacts with the subject, the subject’s representative, and/or the subject's return preparer.

9.4.5.7.4.2 (02-01-2005) Corrections to Finalized Memorandum
1. If it becomes necessary to correct or supplement a memorandum after it is finalized (signed and dated), clearly state the date and reason for such action in a supplemental memorandum and attach it to the finalized memorandum.

9.4.5.7.4.3 (03-14-2002) Inspection of Memorandum or Notes
1. Since the person interviewed may be a government witness in a criminal trial, remember that 18 USC §3500 provides for defense inspection of any pre-trial statement about whose subject matter the witness has testified on direct examination. Case interpretation of this subsection covers substantially verbatim recitals of witnesses' oral statements that are contemporaneously recorded. This includes memoranda of interviews. Handwritten notes made by a special agent during an

Internal Revenue Manual - 9.4.5 Interviews

interview and used as the basis for a more detailed memorandum or report may be subject to inspection by a court and should be preserved and retained in the investigative file. Trial courts have substantial discretionary authority in interpreting the statute. Special agents, therefore, should confine memoranda to facts developed in their interviews, and should avoid opinions, conclusions, and other extraneous matters.

9.4.5.7.5 (02-01-2005) Informal Notes or Diary Entries of Interview
1. Informal notes should contain sufficient details to permit the special agent to refresh his/her memory as to what transpired at the interview. Any method of recording the entries is sufficient, provided it documents the time, place, persons present, and what occurred. Details of interviews should not be entered in the diary, but rather a memorandum should be made and kept in the investigative file (see Exhibit 9.4.5–6). A note should be made in the diary of the time, place, and persons interviewed.

9.4.5.8 (02-01-2005) Right to Record Interview
1. An interrogation or conference may be recorded only by a stenographer who is an employee of the IRS. This rule may be waived by the special agent's SSA. At the request of the IRS or witness, which includes a subject, the SSA may authorize the use of a stenographer employed by a US Attorney, a court reporter of the US district court, a reporter licensed or certified by any state as a court reporter or to take depositions for use in a US district court. The use of this procedure may be permitted under 26 USC §6103(c), subject waiver, or under 26 USC §6103(k)(6) where a disclosure is necessary for investigative purposes. If no stenographer is readily available, mechanical or electronic recording devices may be used to record statements by advising the witness, in advance, of the use of the device (implied consent). If the witness objects, the interrogator will refrain from mechanically or electronically recording the statement. If the witness elects to mechanically or electronically record the conversation, the IRS will make its own recording. 2. A witness or subject will be permitted to hire a qualified reporter as described above to be present at his/her expense to transcribe testimony, provided that the IRS can secure a copy of the transcript at its expense or record the testimony using a mechanical or electronic recording device or its own stenographer or reporter. However, the IRS retains the right to refuse to permit verbatim recording by a non-IRS reporter or stenographer on the grounds that disclosure would seriously impair Federal tax administration IRM 11.3, Disclosure of Official Information Handbook, and Delegation Order No. 156 (as revised). 3. Upon request, a copy of an affidavit or transcript of a question and answer statement will be

Internal Revenue Manual - 9.4.5 Interviews

promptly furnished to a witness, except when it is determined by the SAC that its release should be delayed until such time as it will not interfere with the development or successful prosecution of an investigation. (See 26 CFR 601.107 (b)(1)).

9.4.5.9 (06-30-1998) Preserving the Record of Interview
1. All records of interview should be preserved whether the interview was recorded by use of a stenographer, a mechanical or electronic recording device, or handwritten notes.

9.4.5.9.1 (02-01-2005) Use of a Stenographer
1. The stenographer's original shorthand notes of a statement of a subject or a witness should be filed and considered part of the workpapers relating to the investigation. Remove the pages containing such notes from the notebook, number, staple in order, and seal in an envelope. Label the envelope with the following information: A. investigation number B. name of the person whose statements are recorded C. date the statements were made D. number of pages of notes E. name of the stenographer

9.4.5.9.1.1 (02-01-2005) In Connection with Collateral Investigation
1. The special agent will package and identify the stenographer's notes and other verbatim recordings of statements made in connection with a collateral investigation in accordance with the procedure prescribed above and send it, along with the collateral report, to the field office that requested the investigation.

9.4.5.9.2 (02-01-2005) Use of a Mechanical or Electronic Recording Device

Internal Revenue Manual - 9.4.5 Interviews

1. The special agent will label recordings of statements by a subject or a witness made through the use of stenotype machines or sound recording devices and file in a manner similar to that prescribed in subsection 9.4.5.9.1.

9.4.5.9.3 (02-01-2005) Handwritten Notes
1. The special agent will preserve notes made substantially contemporaneous to interviews of the subject or prospective witnesses and which are used in the preparation of a memorandum of interview, affidavit, or other similar reports. The original notes will be retained in the investigative file. The notes should contain the date of the interview and the initials of their maker in the right corner.

9.4.5.10 (02-01-2005) Processing Record of Interview
1. Once the details of an interview have been recorded in the desired format, the special agent will take the following steps to ensure proper processing of the record of interview.

9.4.5.10.1 (02-01-2005) Review and Corrections
1. The special agent will review every record of interview for typographical errors and for accuracy. If the statement is examined by the witness, permit the witness to correct typographical errors and to make minor modifications to his/her testimony. While major changes in the original interview are not permitted to be made, the witness may, however, submit an affidavit or give testimony to modify his/her original statements.

9.4.5.10.2 (02-01-2005) Execution of a Statement Under Oath
1. Every document made under oath should have a simple certificate evidencing the fact that it was properly executed before a duly authorized officer. The usual and proper form, called the " jurat," contains the statement "subscribed and sworn to before me at (address)," followed by the date, signature, and title of the officer. If the jurat shows an affirmation, the word " affirmed" will be sufficient. The special agent administers the oath by having the witness stand, raise his/her right hand, and make a declaration that the document is true and correct. (See IRM 1.2.2 (Delegation Order No 25-1) and IRM 25.5.1).

Internal Revenue Manual - 9.4.5 Interviews (Cont. 1)

Chapter 4. Investigative Techniques Section 5. Interviews (Cont. 1)

9.4.5 Interviews (Cont. 1)
q q q q

q q q q q q q

9.4.5.10 Processing Record of Interview 9.4.5.11 Rights of Witnesses and Prospective Defendants During Interview 9.4.5.12 Immunity and Compulsion Orders Exhibit 9.4.5-1 Suggested Outline for Questioning Person Who Prepared Returns, If Other Than Taxpayer Exhibit 9.4.5-2 Affidavit Exhibit 9.4.5-3 Statement Exhibit 9.4.5-4 Question and Answer Statement Exhibit 9.4.5-5 Memorandum of Interview Exhibit 9.4.5-6 Informal Notes or Diary Entries Exhibit 9.4.5-7 Document 5661, Statement of Rights (Non-Custody) & (In-Custody) Exhibit 9.4.5-8 Form 5228, Waiver of Right to Remain Silent and of Right to Advice of Counsel

9.4.5.10 Processing Record of Interview 9.4.5.10.3 (02-01-2005) Persons Entitled to Copies
1. Upon request, a witness will be promptly furnished a copy of an affidavit or transcript of a question and answer statement, except when it is determined by the SAC that its release should be delayed until such time as it will not interfere with the development or successful prosecution of a tax matter. A memorandum of interview does not have to be provided to the witness.

9.4.5.10.4 (02-01-2005) Subsequent Use by Special Agent
1. The record of interview is generally not admissible as evidence at the trial, but may be used to refresh the memory of a witness or to discourage a witness from changing his/her testimony. It

Internal Revenue Manual - 9.4.5 Interviews (Cont. 1)

may also be used to impeach a witness on the stand when his/her previous statements are inconsistent with his/her testimony, or to furnish a basis for prosecution of a witness who testifies falsely at the trial. If the statement constitutes a confession or an admission against interest, the pertinent parts may be used as such in evidence at the trial. The record also serves as a valuable source of information for subsequent examinations if it contains the personal and financial history of the subject. It may be used to establish a starting point for a subsequent net worth investigation, or to provide leads to other violations by the subject or other individuals.

9.4.5.11 (02-01-2005) Rights of Witnesses and Prospective Defendants During Interview
1. All persons called as witnesses, whether prospective defendants or otherwise, whether natural persons or corporate entities, and whether they appear as witnesses in response to subpoenas, Commissioner's summonses, or simple requests to appear for interview, have rights and obligations defined by the US Constitution, statutes, and court decisions. 2. A potential conflict of interest situation may arise where there is dual representation; that is, where a summoned third-party witness is represented by an attorney, certified public accountant, or other person who also represents the subject or another interested party (see Third Party Witnesses).

9.4.5.11.1 (02-01-2005) Right to Advice of Counsel
1. A witness in a criminal investigation has the right to be accompanied, represented, and advised by counsel. (See CFR 601.107(b)(1)). The witness should be informed of this right if an inquiry is made regarding it. Subject's counsel, however, should not be permitted to control or censor the replies of the witnesses nor attempt to interfere with the examination or impede or delay the progress of the interview, interrogation, or conference.

9.4.5.11.2 (02-01-2005) Constitutional Rights
1. Principles relating to constitutional rights shall be adhered to during the interview, interrogation, or conference with a person who may be a possible defendant in a criminal trial. 2. Constitutional protections are provided by the Fourth, Fifth, and Sixth Amendments. A. Fourth Amendment—The Fourth Amendment provides that " The right of the people to be secure in their persons, houses, papers, and effects, against unreasonable searches and

Internal Revenue Manual - 9.4.5 Interviews (Cont. 1)

seizures, shall not be violated, and no Warrants shall issue, but upon probable cause, supported by Oath or affirmation, and particularly describing the place to be searched, and the persons or things to be searched." B. Fifth Amendment—The Fifth Amendment provides, in part, that "No person shall be compelled in any criminal case to be a witness against himself, nor be deprived of life, liberty, or property, without due process of law." C. Sixth Amendment—The Sixth Amendment provides, in part that "In all criminal prosecutions, the accused shall enjoy the right to have the assistance of counsel for his defense." 3. Violations of Rights—The courts have long held that if an officer of the United States obtains evidence, a statement, or a confession of a crime from a natural person in violation of the above constitutional rights, such evidence, statement, or confession shall not be admitted as evidence against such person.

9.4.5.11.3 (02-01-2005) Duty to Inform Individual of Constitutional Rights
1. Special agents must abide by any related memoranda directives that apply to advising individuals of their constitutional rights during non-custodial and custodial interviews.

9.4.5.11.3.1 (02-01-2005) Informing of Constitutional Rights in Non-Custodial Interviews
1. The special agent will advise the individual of his/her constitutional rights during non-custodial interviews when the individual is a subject of an investigation, a corporate officer or employee who appears to be implicated in an alleged wrongdoing involving a corporation under investigation, or when a witness' statement would incriminate the witness. 2. The special agent will not use trickery, misrepresentation, or deception to obtain any evidence or information. Moreover, the special agent will not use language that could be interpreted as a promise of immunity or settlement of the subject's investigation, or that might be viewed as intimidation or a threat. 3. To defend against an attack on the admissibility of any statement or documentary evidence furnished by a subject under investigation, the special agent will always inform the subject of his/her constitutional rights at the beginning of a formal question and answer interview, even if the subject had previously been advised.

Internal Revenue Manual - 9.4.5 Interviews (Cont. 1)

4. Failure to give subjects the constitutional warnings prescribed by Internal Revenue procedures has resulted in the exclusion of evidence obtained from the subjects. See US v. Leahey and US v. Heffner.

9.4.5.11.3.1.1 (02-01-2005) Subject of Investigation
1. At the start of the initial interview with the subject of an investigation, a special agent(s) should do the following: A. Identify himself/herself as a special agent of the IRS, Criminal Investigation and provide his/her last name along with an introduction by title and last name of any other officials present. B. Display authorized credentials and badge of authority to the subject for visual examination, (always maintain physical control of the badge and credentials and never allow anyone to duplicate, photograph or make an impression of your identification). C. Provide the subject of the investigation with the special agent(s) unique Identification Number (see IRM 1.2.4, Use of Pseudonyms by Internal Revenue Service) and phone number, either verbally or in writing as required by RRA 98, Section 3705 (a).

Note:
Special agents are required to provide the subject and the subject’s representative with his/her unique Identification Number and phone number at the initial contact. D. The special agent will advise the subject, "As a special agent, one of my functions is to investigate the possibility of criminal violations of the Internal Revenue laws and related offenses. " 2. Advise the subject of the investigation as follows: "In connection with my investigation of your tax liability (or other matter), I would like to ask you some questions. However, first I advise you that under the Fifth Amendment to the Constitution of the United States, I cannot compel you to answer any questions or to submit any information if such answers or information might tend to incriminate you in any way. I also advise you that anything which you say and any documents which you submit may be used against you in any criminal proceeding which may be undertaken. I advise you further that you may, if you wish, seek the assistance of an attorney before responding. Do you understand these rights?" 3. If the subject requests clarification, either as to his/her rights or the purpose of the investigation,

Internal Revenue Manual - 9.4.5 Interviews (Cont. 1)

the special agent will give such explanation as is necessary to clarify the matter for the subject. 4. The special agent will immediately terminate the interview if at any stage of an interview the subject indicates the wish to exercise rights to either withhold testimony or records, or to consult with an attorney. 5. The special agent will write a contemporaneous memorandum stating the following: A. the manner in which the special agent identified himself/herself, including providing the subject with the special agent'(s) unique Identification Number and phone number B. when and where the subject was advised of constitutional rights C. what additional explanation, if any, was made D. how the subject responded E. who was present at the time 6. During subsequent contacts with the subject, the subject should be advised of his/her constitutional rights before questioning. 7. All contacts with the subject and/or their representative are to be documented in accordance with established policy and procedures.

9.4.5.11.3.1.2 (02-01-2005) Subject of Grand Jury Investigation
1. IRS procedures for non-custodial advice of rights does not apply to grand jury investigations. The attorney for the government will provide instructions for advising subjects of their rights. Further, though IRS employees may use their credentials for identification purposes, they should advise those contacted that they are acting as assistants to the attorney for the government in conjunction with an investigation.

9.4.5.11.3.1.3 (02-01-2005) Corporate Officer or Employee
1. In dealing with a corporate officer or employee who appears to be implicated in an alleged wrongdoing involving a corporation under investigation, the special agent will advise the person of his/her identity and duties as a special agent of the IRS, Criminal Investigation as required

Internal Revenue Manual - 9.4.5 Interviews (Cont. 1)

above. 2. Also, the special agent will advise the person that under the Fifth Amendment, he/she cannot be compelled to answer any questions or to submit any personal information that might tend to incriminate him/her in any way. The special agent will advise the person that anything he/she says and any personal documents submitted may be used in any criminal investigation. The person may, if desired, seek the assistance of counsel before responding. If the person is the custodian of corporate records that are needed for the investigation, advise that he/she is required to produce such records since rights under the Fifth Amendment do not apply to a corporation and its records.

9.4.5.11.3.1.4 (03-14-2002) Witness
1. Special agents are authorized to display their badges and credentials, make an affirmative statement that they are special agents with the Internal Revenue Service, Criminal Investigation and identify the person under investigation. Below is a sample introduction. Mr. or Ms. XXXXXX, my name is John Doe, I am a special agent with Internal Revenue Service, Criminal Investigation (display credentials for examination and introduce any other officials present). I am conducting an investigation of Mr. or Ms. XXXXX and I would like to ask you some questions regarding this matter.

Note:
In the above example the special agent made no affirmative statement characterizing the investigation as being "criminal" in nature. Special agents will refrain from characterizing investigations as "criminal" except in those instances where this disclosure is necessary to obtain the information sought. Such a disclosure could be necessary if the witness was disinclined to cooperate. 2. Advise the witness of constitutional rights if at any time the witness makes statements that tend to incriminate him/her. Exhibit 9.4.5–7 is a copy of Document 5661-A, Statement of Rights (32001), which sets forth the warning that is required at the first official meeting with the subject of an investigation, and the warning that must be given to a person in custody prior to any interview.

9.4.5.11.3.2 (02-01-2005) Informing of Constitutional Rights in Custodial Interrogations
1. The Supreme Court has held that when an individual is taken into custody or otherwise deprived of freedom by the authorities, the individual must be advised of the following rights prior to any questioning:

Internal Revenue Manual - 9.4.5 Interviews (Cont. 1)

A. the right to remain silent B. that anything the individual says can and will be used against him/her in a court of law C. the right to consult an attorney, and if they cannot afford an attorney, one will be appointed prior to any questioning, if desired 2. Opportunities to exercise the above rights must be afforded throughout the interrogation. After such warnings have been given and such opportunity afforded to him/her, the individual may knowingly and intelligently waive these rights and agree to make a statement. But unless such warnings and waiver are shown by the prosecution at trial, no evidence obtained as a result of an interrogation may be used against the individual.

9.4.5.11.3.2.1 (02-01-2005) Interview of Persons in Custody
1. The special agent will not delay, for the purpose of obtaining an extensive interview or statement, an arrested person's appearance before a US magistrate. However, if a statement can be obtained without unnecessary, delay and if the arrested person is willing to make a statement, the special agent will record it subject to the safeguards outlined in subsection 9.4.5.7.3. 2. The Supreme Court held in Mahis v. US that statements given by a person who is in custody or otherwise deprived of freedom to a revenue agent conducting a tax examination, are inadmissible unless the person has been advised of his/her constitutional rights. This decision applies although there is no relationship between the tax examination and the reason for custody.

9.4.5.11.3.2.1.1 (02-01-2005) Procedures
1. Prior to questioning, the special agent will warn the subject in clear and unequivocal terms of his/her right to remain silent, that any statements made can and will be used as evidence against him/her, and of his/her right to the presence of an attorney, either retained or appointed. 2. The special agent will not question the subject if the following situations apply: A. the subject indicates that he/she does not want to be interviewed B. at any time during the interview, the subject indicates that he/she does not want to answer any more questions

Internal Revenue Manual - 9.4.5 Interviews (Cont. 1)

C. at any time prior to or during the interview, the subject requests the presence of an attorney; the interview can continue only after the attorney is present and the subject has had an opportunity to consult with the attorney 3. While it is mandatory that enforcement personnel comply with the safeguards listed above, these safeguards do not apply to the normal administrative processing of an accused person after being taken into custody, such as: A. taking photographs B. taking fingerprints C. asking questions necessary to complete administrative forms and agency records 4. The safeguards also do not apply to the following situations: A. an interview of one person that develops evidence solely against another person B. interviews to secure information for the timely protection of life, property, or national security C. volunteered statements of any kind

9.4.5.11.3.2.1.2 (02-01-2005) Procedural Safeguards to Secure Admissibility of Statements
1. To secure the admissibility of statements made during custodial interrogations, the special agent will observe the following procedural safeguards: A. The statement of rights must be given to a person in custody prior to an interrogation. Exhibit 9.4.5–8 is a copy of Form 5228, Waiver of Right to Remain Silent and of Right to Advice of Counsel. The statement of rights is contained within this form. This statement in card form also appears in Document 5661. B. If practicable, the waiver form should be signed by the person to be interrogated before the interrogation is initiated. C. Attach the original Form 5228 and make it a part of the case report that is given to the attorney for the government.

Internal Revenue Manual - 9.4.5 Interviews (Cont. 1)

D. Give a copy to the person signing the form. E. The SAC receives a second copy. F. The special agent who conducted the interrogation retains a third copy.

9.4.5.11.3.2.1.3 (02-01-2005) Oral Waiver
1. An oral waiver may be acceptable when it is impossible or impracticable to obtain a signed waiver. In such instances, the warning given by the special agent and the defendant's waiver should be witnessed by another agent or other credible person, or recorded by mechanical or electronic means.

9.4.5.11.3.2.1.4 (02-01-2005) Written Statement Obtained After Waiver of Rights
1. If a written statement is obtained from a person who is interrogated after waiving the right to remain silent, either by execution of the waiver agreement or otherwise, the special agent will include in the statement an introductory paragraph that indicates the person was advised of his/her right to remain silent and of the right to counsel, and that those rights were waived and the statement was made voluntarily.

9.4.5.11.3.2.1.5 (02-01-2005) Spontaneous or Volunteered Statements
1. Spontaneous or volunteered statements of any kind are not barred by the Fifth Amendment and are not affected by the Supreme Court's decision in Miranda v. Arizona.

9.4.5.11.3.2.2 (02-01-2005) Waiver of Constitutional Rights
1. The privilege against self-incrimination must be specifically claimed, or it will be considered to have been waived, see Lisansky v. US. In Nicola v. US, a taxpayer permitted a revenue agent to examine his books and records. The taxpayer was indicted for income tax evasion and invoked his Fifth Amendment rights for the first time at the trial by objecting to the revenue agent's testimony concerning his findings. The court considered the issue whether the taxpayer had waived his Fifth Amendment privilege since he had not refused to supply the requested information. The court first noted that the Fifth Amendment privilege is for the benefit of the witness and unless specifically invoked is deemed to be waived. The court ruled that it was necessary for him to claim immunity

Internal Revenue Manual - 9.4.5 Interviews (Cont. 1)

before the government agent and refuse to produce his books. After the government had possession of the information with his consent, it was too late for him to then claim constitutional immunity. 2. Subjects who make verbal statements or give testimony to special agents during an investigation or at a US Tax Court trial, may still rely upon their constitutional protections and refuse to testify at trial of their indictment for tax evasion. However, any statements inconsistent with their innocence may be used against them as admissions. 3. If a witness has testified at a trial and voluntarily revealed incriminating facts, he/she cannot in the same proceeding avoid disclosure of the details. However, waiver of constitutional rights will not be assumed lightly, and no specific language is required in asserting them. In the language of the Quinn decision, a claim of privilege does not require any special combination of words; a witness need not have the skill of a lawyer to invoke the protection of the Fifth Amendment. Consequently, no ritualistic formula is necessary to invoke the privilege. See Quinn v. US.

9.4.5.12 (02-01-2005) Immunity and Compulsion Orders
1. This section deals with a witness being granted immunity from criminal prosecution and compelling witnesses to testify. The topics discussed are as follows;
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Immunity-Authority and Tax Division Policy Applicability of Procedures for the Utilization of 18 USC §6004 Summons Procedure Prior to Requesting a Compulsion Order Requesting Immunity for Acts of Production Considerations Relevant to Requesting a Compulsion Order Compulsion Order Request Procedures Procedures for Potential Perjury/False Statement Referrals after a Compulsion Order Report Requirements by Criminal Investigation Relating to Compelled Testimony Safeguarding Transcripts and Other Immunized Information Prosecution of a Compelled Witness for Tax Offenses

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Civil Use of Material Obtained Under a Compulsion Order

9.4.5.12.1 (02-01-2005) Immunity- Authority and Tax Division Policy
1. With the approval of the Attorney General or delegate, the Secretary of the Treasury is authorized to issue orders compelling testimony in agency proceedings pursuant to 18 United States Code (USC) §6002 and 18 USC §6004. By Treasury Department Order No. 150–19, the Secretary of the Treasury delegated this authority to the Commissioner of Internal Revenue who re-delegated the authority to the Deputy Commissioner, the Chief, CI, and the Treasury Inspector General Tax Administration (TIGTA) (See Delegation Order No. 169). 2. An agency proceeding, as defined by 18 USC §6001, is a proceeding before an agency authorized to issue subpoenas and to take testimony or receive other information from witnesses under oath. 3. In a proceeding where the IRS is authorized to issue a summons, the designated officials of the IRS may issue, with the approval of the Attorney General or delegate, an order compelling individuals to give testimony or to produce information which they had refused to give or produce on the basis of the right against self-incrimination. An order may be issued if in the judgment of the designated officials: A. the testimony or other information from such individual may be necessary for the public interest, and B. such individual has refused to testify or provide other information on the basis of the right against self-incrimination 4. The Assistant Attorney General, Tax Division, has set forth the policies of the Department of Justice (DOJ) regarding the review and approval of requests under 18 USC §6004 for authorization to issue orders compelling testimony and the production of other information in IRS proceedings. 5. Testimony or other information compelled under the order and information directly or indirectly derived from such testimony or other information, may not be used against the witness in any criminal investigation, except a prosecution for perjury, giving a false statement, or otherwise failing to comply with the order.

9.4.5.12.2 (02-01-2005) Applicability Of Procedures For The Utilization Of 18 USC §6004

Internal Revenue Manual - 9.4.5 Interviews (Cont. 1)

1. These procedures will be employed only in investigations conducted by Criminal Investigation (CI). Orders to compel testimony will not be requested for matters initiated in other operating divisions of the IRS unless and until the case has been referred to and accepted by CI. For example, to obtain an order to compel the testimony of a person employed as a bookkeeper of a large corporation, either the principal corporation or some related entity or individual must first be selected for investigation by Cl. 2. Requests for authorization to compel testimony will be submitted only for testimony, books, papers, records, or other data to be given or produced in IRS proceedings which have been initiated by a summons issued under 26 USC §7602. Procedures for the utilization of 18 USC §6004 will not be employed in connection with grand jury investigations that fall within the purview of 18 USC §6003. 3. Requests for approval to compel testimony will be limited to investigations and situations which, in the judgment of the requester and reviewers, are significant and in which an order compelling testimony is the only viable administrative tool for obtaining necessary information. Employees of Cl should consult Criminal Tax (CT) Counsel for pre-referral advice prior to initiating such a request. 4. A request for approval to compel testimony will be submitted only after a witness has been summoned pursuant to 26 USC §7602, and has actually appeared and invoked his/her Fifth Amendment privilege in response to significant or essential questions posed by the special agent.

9.4.5.12.3 (02-01-2005) Summons Procedure Prior To Requesting A Compulsion Order
1. During an investigation, any party interviewed who believes that his/her testimony would be incriminating may invoke his/her rights under the Fifth Amendment. 2. If the witness is a subject of the investigation, or if during the course of an interview the special agent determines that the witness may be a potential subject of the investigation, the special agent should advise the witness of his/her constitutional rights. The special agent should ask the witness if he/she understand his/her rights. However, the special agent should not ask the witness if he/she wishes to assert his/her Fifth Amendment privilege. This claim should be initiated by the witness. 3. Each witness for whom a compulsion order is to be requested must be served with a summons issued by a special agent under 26 USC §7602, and in accord with current case law governing the use of these summonses. Where applicable, the provisions of 26 USC §7609 will be followed.

9.4.5.12.3.1 (02-01-2005) Compulsion Order Requests When Summons is Issued and a Fifth

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Amendment Claim Is Offered During an Interview
1. Once a witness has been summoned, has appeared and invoked the Fifth Amendment right against self-incrimination in response to specific questions posed by the special agent, then; A. The return date of the summons may be continued until authorization to issue a compulsion order has been sought and granted. B. The witness should be advised that the proceedings under the " initial" summons have been adjourned and the witness' reappearance will be scheduled. In this regard, the special agent should keep in mind that, in addition to the time needed to consider such application within the IRS, a minimum of one month from the date of receipt of the request by DOJ will be needed to obtain an authorization from the Tax Division. C. When the issuance of the compulsion order has been approved, the witness can be directed to reappear and compliance with the summons will then be directed by issuance of an order pursuant to 18 USC §6004. D. Except in unusual circumstances, a new summons is not necessary to request the witness' reappearance after a compulsion order has been authorized. However, if the special agent does not properly adjourn the hearing, a new summons may need to be issued. E. In the event a witness fails to appear or otherwise comply once the order is approved, compliance should be sought pursuant to a summons enforcement action.

9.4.5.12.3.2 (02-01-2005) Compulsion Order Requests When No Summons Was Issued Prior To A Fifth Amendment Claim Offered During an Interview
1. If during an interview or conference that was not initiated by use of a summons, a Fifth Amendment claim is raised, substantive questioning shall proceed until the witness expressly refuses to answer further questions on the basis of his/her privilege against self-incrimination. 2. When a Fifth Amendment claim is advanced during an interview or conference not initiated by use of a summons: A. Substantive questions should be asked to ascertain all relevant areas where the privilege will be claimed. B. Questioning shall proceed until the witness expressly refuses to answer further questions on the basis of a right against self-incrimination and until the scope of the claim can be

Internal Revenue Manual - 9.4.5 Interviews (Cont. 1)

determined. C. Substantive questions shall be asked to ascertain all relevant areas where the right will be claimed so that an accurate assessment of the need to request authorization to issue a compulsion order may be made. Such authorization will not be requested if it is apparent that the Fifth Amendment right is only being claimed in response to nonessential questions. D. This information will also enable the IRS to decide whether to issue a summons. 3. If the SAC decides that an effort will be made toward obtaining an order compelling testimony, the following procedures will be followed: A. The witness will be summoned. B. The witness will be sworn. C. A verbatim transcript will be made of the interview. D. Substantive questions will be asked to determine the scope of the Fifth Amendment claim. 4. When the witness has been summoned, has appeared and again invokes his/her Fifth Amendment privilege in response to specific questions posed by the special agent, then procedures in subsection 9.4.5.12.4.1 will be followed.

9.4.5.12.3.3 (02-01-2005) Procedures When a Witness Reappears In Response To An Adjourned Summons
1. When a witness reappears in response to the adjourned summons, the following procedures must be observed: A. A verbatim transcript of the proceedings will be recorded only by a court reporter of a US district court or a reporter licensed or certified by a state or Federal court. B. The person conducting the proceeding must notify the stenographer or reporter that all original notes must be retained until notified that they may be destroyed. C. The witness will be sworn.

Internal Revenue Manual - 9.4.5 Interviews (Cont. 1)

D. The proceeding in which the witness is compelled to testify should commence with the special agent making reference, on the record and in the presence of the witness, to the date of the witness' prior appearance and the invoking of the Fifth Amendment at that time. The order and the authorization letter from the Assistant Attorney General, Tax Division, shall be marked as exhibits and the order shall be read aloud by the special agent into the record in the presence of the witness. The witness will be shown the originals and given a copy of both documents and asked to examine the documents and verify the copies. The witness shall be permitted to retain a copy of both documents. The special agent will retain the originals with the record in the field office for use as an exhibit in any future proceeding (including inclusion of a copy as an exhibit in transmitting the investigative report). E. When testimony or other information is produced pursuant to a compulsion order, it is vital that complete, accurate copies be retained and authenticated as conforming to the originals of any books, records, or other documents provided by the witness.

9.4.5.12.3.4 (02-01-2005) Summons Enforcement Procedures Prior To Requesting a Compulsion Order
1. A summons enforcement action is needed to direct a witness to appear and respond to specific questions posed by the special agent, before requesting an order pursuant to 18 USC §6004, when one of the following situations occur: A. The witness fails to appear pursuant to the initial summons. B. The witness challenges the initial summons on grounds other than the Fifth Amendment. C. The witness is a third-party record-keeper, and the subject files a petition to quash the summons pursuant to 26 USC §7609. D. The witness otherwise refuses to comply with the initial summons. 2. This summoned party, who has either simply refused to appear or who has refused to comply on grounds other than the Fifth Amendment right against self-incrimination, may later invoke the Fifth Amendment in response to specific questions during the hearing in court on the summons enforcement action. In that event, if it is determined by the government that a request for authorization to issue a Section 6004 compulsion order should be made, it is anticipated that the attorney for the government will request a continuance until a decision on the request can be made. If the request is approved, it is anticipated that the court (upon finding that any other nonFifth Amendment claims are resolved in the government's favor) will be requested by the attorney

Internal Revenue Manual - 9.4.5 Interviews (Cont. 1)

for the government to order the witness to appear before the IRS. 3. In the event a summons enforcement action results from challenges made by a witness on grounds other than the Fifth Amendment, and no Fifth Amendment claim is raised during the course of the summons enforcement proceedings, but the witness, after being directed to reappear before the IRS by the court, then invokes the Fifth Amendment for the first time before the IRS, the proceedings may be adjourned until a request for authorization to compel testimony is considered and made. The special agent should advise the attorney for the government who handled the summons enforcement action of the need for the adjournment and of any other significant development occurring in the course of the proceedings before the IRS. The attorney for the government will inform the court of these developments. 4. If, after being served with the order, the witness still refuses to answer questions or furnish information:
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The interview will be terminated. An expedited transcript will be requested from the reporter. A request for civil enforcement of the summons will be prepared by the special agent. Upon receipt of the transcript, the special agent will immediately transmit, 1. the original and four copies of the request 2. together with the original of the summons (Form 2039) and related documents 3. the transcript 4. the original order compelling testimony 5. the authorization from the DOJ, Tax Division, to the Director, Field Operations. The special agent will forward the package to CT Counsel.

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5. Requests approved by CT Counsel will be forwarded to Chief Counsel, Attention: Assistant Chief Counsel (Collection, Bankruptcy and Summonses). Chief Counsel, in turn, will forward approved requests to the appropriate Civil Trial Section of the Tax Division with a copy to DOJ, the Criminal Section, Tax Division.

9.4.5.12.4 (02-01-2005) Requesting Immunity for Acts of Production
1. The contents of subpoenaed business records of a sole proprietorship are not subject to a claim of right against self-incrimination since such records are created voluntarily prior to the issuance of the subpoena or summons. However, a witness' act of production in response to a subpoena or

Internal Revenue Manual - 9.4.5 Interviews (Cont. 1)

summons may have incriminating testimonial aspects for which statutory immunity must be granted before production may be compelled. 2. Generally, the testimonial aspects of the act of production go to the existence, possession, and authenticity of the records being sought. That is, merely by producing subpoenaed or summoned records, the witness admits that: A. The records called for in the subpoena or summons exist. B. Such records are in the possession and control of the witness. C. The records being produced are the records described in the subpoena or summons. 3. A compulsion order under 18 USC §6004 may be used to immunize only those aspects of the act of production that are testimonial in nature. When a witness receives such immunity, the government is precluded from the use and derivative use of the witness' act of production to establish the existence, possession, or authenticity of the records that are produced. However, when the government can establish independently from the act of production that the records do exist and are in the possession of the witness, and there is an independent means by which the records can be authenticated (e.g., third party testimony, handwriting analysis, etc.), the contents of the records may be used in evidence against the witness in a criminal proceeding. 4. A request for immunity under 18 USC §6004 solely for a witness' act of production will be considered only in factual situations which satisfy all of the following conditions: A. The investigation is a criminal investigation. B. The witness must invoke a valid Fifth Amendment claim to the production of such records. C. The records sought to be compelled are clearly business records. D. The summons being issued does not seek testimony from the witness. E. The records sought to be compelled are described with sufficient particularity so as to be easily identified. F. If the party summoned is a subject of the investigation, the records sought to be compelled are not otherwise obtainable from third parties (e.g., bank, bookkeeper, accountant). G. The witness to be immunized is not being required, as a result of the summons, to create any records.

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H. There is evidence available to establish that the records being sought presently exist in the possession of the party to be summoned, and there is an independent means to authenticate the records once they are produced.

Note:
Procedures for the utilization of 18 USC §6004 will not be employed in connection with grand jury investigations which fall within the purview of 18 USC §6003. 5. When a special agent determines that a summons should be issued for business records from a witness or subject for whom act of production immunity will be required, the concurrence, and the assistance of CT Counsel in drafting the summons, should be sought. The summons must be narrowly drafted to seek only production of business records that are known to be in the possession of the summoned party. 6. If the summoned party refuses to comply based on a valid Fifth Amendment claim in a recorded "Question and Answer" statement, CI will prepare and process a compulsion order request. The compulsion order request should also contain a section which covers the independent authentication of the requested records and specifies which records can be identified by each witness. 7. After approval of the compulsion order by DOJ and the Chief, CI, the procedures set forth in IRM 9.4.5.12.4.3 of this section entitled " Procedures When A Witness Reappears in Response to an Adjourned Summons" will be followed except that: A. Criminal Tax Counsel will be requested to attend the proceeding. B. The summoned party will be directed to turn over the requested documents to CT Counsel who will immediately inspect the records to determine whether any documents produced are not covered by the summons. C. If any documents outside the summons are produced, CT Counsel will advise the summoned party that the immunity order does not cover the witness' act of producing those documents. D. Documents not covered by the summons will be immediately returned to the witness unless the witness expressly waives any Fifth Amendment rights in regard to the documents. E. If the volume of documents makes it impractical to perform an inspection at the time of production, the witness will be advised that the documents will remain under the control of

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CT Counsel until such inspection can be performed. F. Criminal Tax Counsel will perform an inspection of the documents as soon as possible. Until such an inspection is completed, none of the documents produced will be made available to the special agent. G. After inspection, all documents covered by the summons will be released to the special agent. H. All documents outside the scope of the summons will be retained by CT Counsel. Criminal Tax Counsel will immediately advise the witness or the witness' attorney by certified mail return receipt requested, of the documents found to be outside the scope of the summons and immunity order. The witness will be requested to reclaim the documents or provide an express waiver of any Fifth Amendment rights in regard to such documents. I. If an express waiver is not received within 30 calendar days of the date of CT Counsel's letter, the documents will be sealed and returned to the witness by certified mail, return receipt requested, or by hand delivery by a special agent not assigned to the investigation. 8. As soon as possible after receipt of documents obtained pursuant to an act of production immunity order, the special agent should obtain and document independent authentication of the records. Although independent authentication may not legally be required until an attempt is made to introduce the records in a criminal proceeding against the witness, the means to obtain such authentication may be unavailable by that time, e.g., if the only independent way to authenticate is by identification of the records by a third-party witness who dies between the date of production and date of trial. 9. If the summoned party does not comply with the summons after receipt of the Compulsion Order, CI will refer the summons to CT Counsel for judicial enforcement under existing procedures. The enforcement letter from CT Counsel will be reviewed by the Assistant Chief Counsel (Collection, Bankruptcy and Summonses) before forwarding to the DOJ, Tax Division. Coordination with the Criminal Tax Division will be sought when appropriate.

9.4.5.12.5 (02-01-2005) Considerations Relevant To Requesting A Compulsion Order
1. The following considerations are designed to implement the DOJ, Tax Division's policy regarding the utilization of 18 USC §6001– §6005: A. that restraint and selectivity be used in authorizing requests to apply for or issue orders compelling testimony under 18 USC §6004; and

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B. that the reviewing officials be furnished all available information regarding the extent of the witness' involvement in the matters under investigation, and the nature of the expected testimony in order that an informed and objective assessment of the advantages and risks involved in compelling testimony may be made. 2. Requests for authorization to compel testimony from close family members of the subject of an investigation will rarely be approved by DOJ, Tax Division, unless: A. the witness and the relative participated in a common business enterprise and the testimony to be elicited related to that enterprise or its activities; B. the testimony to be elicited relates to illegal conduct in which both the witness and the relative were active participants; or C. the testimony to be elicited relates to a crime involving overriding prosecutorial concerns 3. The government must be careful not to provide witnesses, who may be sympathetic to the subject, with the opportunity to use immunity from prosecution as a means of exculpating the subject of the investigation by falsely accepting responsibility. 4. Department of Justice requires that the compelled testimony of witnesses who have been convicted, but not sentenced on criminal charges, will not be brought to the attention of the sentencing judge without the witness' consent.

9.4.5.12.6 (02-01-2005) Compulsion Order Request Procedures
1. A request will consist of narrative responses, in memorandum form, keyed to the requested information outlined in paragraph (3) of this section below. These items should be set forth in the memorandum with reference to the letter (a through s) corresponding to the item in paragraph (3). Where appropriate, a single memorandum may be prepared even where authorization for a compulsion order is being requested for more than one witness. The first page(s) of the request should consist of a Form 6186, Request for Authorization to Issue a Compulsion Order (Witness Identification Sheet). One Form 6186 should be submitted for each witness. 2. Each request for authorization to issue a compulsion order will be transmitted by a memorandum addressed to the Director, Field Operations from the requesting special agent. The last page of the request will contain approval lines for the following officials: A. Special Agent in Charge

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B. Director, Field Operations C. Chief, CI 3. In order to provide effective administrative review of the need for a compulsion order, and to comply with the requirements of the DOJ, Tax Division, the following information should be included in each request to compel testimony from a prospective witness. Reference should be made in the memorandum prepared by the special agent to the letters below in order to identify responses. A. The narrative memorandum should contain, as a caption, the following information: the name, address, taxpayer identification number, subject investigation number and similar data on each related investigation. B. A brief summary of the background of the investigation including the title and section numbers of the US Code corresponding to the alleged violation(s) under investigation and the method of proving income which is currently being utilized. C. Indicate whether the witness is related, by blood or marriage, to the subject(s) of the investigation. D. Summarize witness' role in the matter under investigation. E. Describe briefly the circumstances surrounding the witness' invocation of the Fifth Amendment, outlining the scope of the assertion, and the legal basis believed to underlie the assertion. Where possible and when appropriate, state whether the right is being invoked by the witness in a capacity as a record-keeper, corporate officer, or in an individual capacity, based on personal knowledge of or involvement in the matters under investigation. F. Summarize the witness' expected testimony. G. Indicate whether the witness may be in a position to exculpate the proposed subjects, even if it is not anticipated that the witness would do so if compelled to testify. H. Outline the basis for concluding that the witness will cooperate and testify truthfully if compelled to do so pursuant to 18 USC §6004. If it cannot be ascertained whether the witness will testify truthfully, so state. I. Attach witness' Federal Bureau of Investigation (FBI) identification record "criminal history" and summarize any other known criminal activity. If the FBI record is unavailable, explain. List any charges or investigations pending against the witness. If the

Internal Revenue Manual - 9.4.5 Interviews (Cont. 1)

witness is currently awaiting trial or sentencing, or has a case on appeal, provide information concerning the identity, status, and location of the case including the name of the government attorney assigned to it. J. Describe the Federal, state, or local offenses which may have been committed by the witness that could be disclosed during the course of his/her compelled testimony. Include an analysis as to whether the witness could be prosecuted for a role in the matter under investigation and, if so, state the reasons why the IRS has determined not to recommend prosecution. K. If the witness is the subject of any inquiry, civil or criminal, currently being conducted by the IRS, indicate the office handling the matter and the nature of the inquiry. L. If the witness is represented by counsel, provide the name of the witness' attorney, and indicate whether that attorney or a member of that attorney's law firm is representing one or more of the proposed subjects (including, for example, an employee of a corporation who is represented by the corporation's counsel). If the witness' attorney is also representing one or more of the proposed subjects, state whether the attorney has given any indication that representation will be withdrawn in the event an order to compel testimony is authorized. M. If the witness may assert the attorney-client privilege or other legal privilege, describe the possible effect of that privilege on the government's attempts to obtain the witness' testimony. N. State whether any assurances or agreements are known to have been made with the witness by any government representatives that could have the effect of affording the witness immunity from prosecution. O. List all other witnesses for whom authorization to compel testimony has been requested in this matter, or with whom an agreement not to prosecute may have been made by a government representative. Specify whether such witnesses named are the subject of an authorization or an agreement. P. List any known electronic surveillance involving this investigation, and attach a summary report of the results of the surveillance. Q. Summarize any information available to refute false statements which the witness may make. R. Summarize the attempts made to secure from other sources the information the witness is expected to provide or, if appropriate, summarize the reasons why this information cannot

Internal Revenue Manual - 9.4.5 Interviews (Cont. 1)

be obtained from other sources. S. List the names and addresses of Federal, state, and local law enforcement officers other than IRS personnel notified of this request, if any, and report their views regarding the application. If it is anticipated that other law enforcement agencies would have a substantial interest in the authorization under consideration, then indicate the efforts made to clear the proposed order with such agencies. Clearance with other agencies shall be effected in accordance with the provisions of 26 USC §6103. 4. The request will be comprised of the witness identification sheet(s); the memorandum setting forth the responses to the above items; a verbatim transcript or a detailed memorandum of the proceeding (a memorandum will be accepted only when the witness refuses to allow the interview to be recorded) wherein the witness asserts the Fifth Amendment right against self-incrimination or otherwise refuses to answer questions; and a copy of the original summons. 5. The SAC will submit each request for authorization to issue a compulsion order to the Director, Field Operations for consideration of approval. The Director, Field Operations will indicate approval or disapproval within three workdays of receipt. If the Director, Field Operations agrees that it is appropriate to request authorization, the original and three copies of the request will be forwarded to the Chief, CI, Attn: Financial Crimes Section. 6. The Chief, CI, will approve or disapprove the request within three working days of receipt. If the Chief, CI, agrees that a request for authorization to compel testimony is appropriate, the original and two copies of the request will be forwarded to Division Counsel/Associate Chief Counsel (Criminal Tax), to review the legal sufficiency of the request and for preparation of the compulsion order. 7. The Division Counsel/Associate Chief Counsel (Criminal Tax) shall determine the propriety and legal sufficiency of the request. If the request is determined proper and legally sufficient, the Division Counsel/Associate Chief Counsel (Criminal Tax) shall prepare a proposed compulsion order for each witness and transmit them, along with an original and one copy of the request, to the Chief, CI. The original request, along with all supporting exhibits and copies of all proposed compulsion orders, will then be transmitted to the Assistant Attorney General, Tax Division, Attention: Chief, (Region) Criminal Enforcement Section. If the request is determined not proper or not legally sufficient, the Division Counsel/Associate Chief Counsel (Criminal Tax) will advise the Chief, CI. 8. Upon forwarding the request to the DOJ, Tax Division, the Chief, CI will orally advise the Director, Field Operations and the SAC of the requesting field office that it has been forwarded. 9. Upon receipt of approval by the Assistant Attorney General, Tax Division, the Chief, CI will sign the order. The order, with the authorization letter (signed by the Assistant Attorney General, Tax

Internal Revenue Manual - 9.4.5 Interviews (Cont. 1)

Division) attached, will then be transmitted directly to the requesting field office, with copies to the Director, Field Operations, Division Counsel/Associate Chief Counsel (Criminal Tax), and Area Counsel (Criminal Tax). At the same time, the Chief, CI will orally advise the Director, Field Operations and the SAC of the requesting field office that the order has been signed.

9.4.5.12.7 (02-01-2005) Procedures for Potential Perjury/False Statement Referrals after A Compulsion Order
1. In the event the witness appears and testifies, and there exists evidence that proves the witness testified falsely, the special agent should submit to CT Counsel the following: A. the summons and related documents B. the verbatim transcript and documents provided by the witness C. the order compelling testimony signed and issued by the Chief, CI D. the authorization letter from the Assistant Attorney General, Tax Division E. a report by the special agent setting forth in detail the reasons why the witness's testimony is alleged to be false, and the evidence that is available to support this allegation.

9.4.5.12.8 (02-01-2005) Report Requirements by Criminal Investigation Relating To Compelled Testimony
1. Within 10 workdays after the witness has testified, the SAC will prepare and submit a Form 6185, Witness Follow-up Report, to the Director, Field Operations on the use of the compulsion order. A copy should be immediately forwarded to the Criminal Section, DOJ, Tax Division. The report should be prepared whether or not the witness complies with the order, and whether or not it is believed the witness testified truthfully. 2. A copy of the report will be sent to the following: A. Chief, CI, Attn: Financial Crimes Section B. CT Counsel C. Assistant Chief Counsel (Collection, Bankruptcy and Summonses)

Internal Revenue Manual - 9.4.5 Interviews (Cont. 1)

D. Division Counsel/Associate Chief Counsel (Criminal Tax) E. Criminal Section, DOJ, Tax Division 3. The report shall contain the same information listed in IRM 9.4.5.12.8 (above), entitled "Procedures for Potential Perjury/False Statement Referrals After a Compulsion Order." 4. Supplementary reports should be submitted as necessary to report subsequent events of significance.

9.4.5.12.9 (02-01-2005) SAFEGUARDING TRANSCRIPTS AND OTHER IMMUNIZED INFORMATION
1. IRS personnel should not disclose the nature, content, scope, or any other facet of the witness' compelled testimony before the IRS. If inquiries are made concerning an individual who has previously furnished information pursuant to an order issued under 18 USC §6004, the fact the person has given compelled testimony should be brought to the attention of the requesting department or agency. 2. A copy of the verbatim transcript and order, together with pertinent records and documents supplied by the witness, should be included as exhibits to the special agent's final report recommending prosecution of the subject of the investigation. A transcript used for such purposes will be accompanied by a cover sheet listing the signature, name, and title of each person having access to the transcript. All case transmittal material must contain a reference to the fact the report contains such documents, and of the need for each reviewer to sign the cover sheet. The originals and all remaining copies of the transcript, as well as authenticated copies of documents furnished, will be placed under seal with the special agent's investigation files and will be retained for the same time as such file. In no instance shall a transcript, sealed documents, or any other records be destroyed less than 20 years from the date of the witness' appearance and testimony pursuant to the compulsion order.

9.4.5.12.10 (02-01-2005) Prosecution of A Compelled Witness For Tax Offenses
1. If a separate criminal tax investigation is subsequently undertaken of a person who has previously been compelled by the IRS to testify pursuant to an 18 USC §6004 order, no persons connected with the subsequent investigation should be permitted access to the transcript of the witness' prior testimony or the documents, or copies thereof, which the witness provided under the compulsion order. Any IRS personnel who had access to the compelled testimony or documents provided,

Internal Revenue Manual - 9.4.5 Interviews (Cont. 1)

must exclude themselves from any investigative or review action in the subsequent investigation. 2. If a prosecution recommendation is made for the DOJ, Tax Division and the recommended defendant is known to have previously been compelled to testify under an 18 USC §6004 order, the referring special agent should include the following information in the prosecution recommendation: A. the dates the recommended defendant was previously ordered to give testimony and produce documents B. a summary of the circumstances and information that will establish the proposed criminal tax prosecution is independent of the prior compelled testimony or documents provided by the recommended defendant

Note:
Department of Justice, Tax Division will not authorize prosecution of a witness previously compelled to testify pursuant to 18 USC §6004 unless the independent nature of the evidence can be clearly demonstrated. 3. Where prosecution of a previously compelled witness is undertaken, the government bears a heavy burden to establish the evidence of the offense was derived from independent sources and the search for such evidence did not emanate from the testimony given under compulsion.

9.4.5.12.11 (02-01-2005) Civil Use of Material Obtained Under A Compulsion Order
1. Testimony and other information provided by a witness under an 18 USC §6004 order may be used in a related injunctive action under 26 USC §7407 or 26 USC §7408 prior to the conclusion of the criminal investigation. Such testimony and other information will not be utilized in any other civil action (i.e., conducting civil audits, issuances of statutory notices, etc., relative either to a witness or a subject of the investigation) during the pendency of the criminal aspects of the investigation without the express written consent of the Chief, CI. If a prosecution referral to the DOJ, Tax Division is ongoing, the concurrence of the DOJ, Tax Division must be obtained prior to the non-injunctive civil use of the testimony or information.

Exhibit 9.4.5-1 (06-30-1998) Suggested Outline for Questioning Person Who Prepared Returns, If Other Than Taxpayer

Internal Revenue Manual - 9.4.5 Interviews (Cont. 1)

Occupation and qualifications of preparer a. Education b. Experience c. Enrolled (2) Description of primary books and records in detail a. Cash receipts and disbursements book b. Journals: sales, purchases, cash c. Invoices and other original documents (3) Description of secondary books and records in detail a. Ledgers: general and subsidiary b. Trial balance books, and records of financial statements (4) Extent of witness' audit of books and records (5) Source of all information on returns a. Books and records (tie in with return) b. No records (obtain information in detailed form) c. Oral information d. Records and books of other third parties Items not shown on books or records (including income, assets, (6) etc.) Instructions and data received from taxpayer and any other (7) persons Information as to whether returns were explained to taxpayer, (8) and to what extent Copies of workpapers used in preparation of returns and copies (9) of returns a. Tie in with return b. Supporting data c. Arrange to inspect the workpapers and copies of returns (10) Conversations regarding tax matters with: a. Taxpayer b. Taxpayer's agent or other persons Details about witness' and taxpayer's knowledge concerning (11) the signing and filing of each return, including: a. Identification of each return prepared by witness b. Where each return was prepared c. Where each return was signed

(1)

Internal Revenue Manual - 9.4.5 Interviews (Cont. 1)

Exhibit 9.4.5-2 (06-30-1998) Affidavit
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Exhibit 9.4.5-3 (06-30-1998) Statement
(1) In re: Name and address of subject (2) Time: Date and hour of interview (3) Place: Location of interview On 20–, I, Special Agent questioned Mr. about . Mr. stated . Note: If feasible, the subject should be requested to examine the statement and sign it. If he/she refuses, insert the following (4) legend at the end of the statement when applicable. "This statement was read by Mr. (the subject), on 20– who stated that it was true and correct, but refused to be placed under oath or to sign it." (5) Date and Time (6) Internal Revenue Service Special Agent (7) Date and Time (8) Witness (9) Date and Time (10) Witness

Exhibit 9.4.5-4 (06-30-1998) Question and Answer Statement
Testimony of John J. Jones, 115 South Street, Chester, Pennsylvania 19013, given in the office of Criminal Investigation, Internal Revenue Service, Room 200, United States Courthouse, 401 N. Broad Street, Philadelphia, Pennsylvania, at 9:30 a.m., on Tuesday, September 7, 2001, about his Federal income tax. Present:

(1)

(2)

Internal Revenue Manual - 9.4.5 Interviews (Cont. 1)

a. Mr. John J. Jones, Taxpayer b. Adam Adams, Attorney c. John Smith, Special Agent d. Alexander White, Revenue Agent e. Evelyn Green, Reporter Questions were asked by Special Agent Smith and answers (3) were given by Mr. Jones unless otherwise specified. Mr. Jones, this interview is being recorded, as we agreed, by (4) means of the tape recorder on your left. 1. Q. Mr. Jones, you were requested to appear at this office to answer questions concerning your Federal income tax for the years 20– to 20–, inclusive. First, I advise you that under the Fifth Amendment to the Constitution of the United States I cannot compel you to answer any questions or to submit any information if such answers or information might tend to incriminate you in any way. I also advise you that anything you (5) say and any documents you submit may be used against you in any criminal proceeding which may be undertaken. Do you fully understand this? (If the taxpayer requests clarification, either as to his rights or the purpose of the investigation, the special agent will give such clarification.) Do you swear that the answers you are about to give to the questions asked will be the truth, so help you God? (The special agent will stand while administering the oath). 270. Q. Mr. Jones, have I, or has any other federal agent, (6) threatened or intimidated you in any manner? (7) A. No. 271. Q. Have I, or any other federal agent, offered you any (8) rewards, or promises of reward or immunity, in return for this statement? (9) A. No. (10) 272. Q. Have you given this statement freely and voluntarily? (11) A. Yes. (12) 273. Q. Is there anything further you care to add for the record? (13) A. No. After this statement has been transcribed, you will be given an (14) opportunity to read it, correct any typographical errors, and sign it. (15) United States of (•)

Internal Revenue Manual - 9.4.5 Interviews (Cont. 1)

(16) (17)

(18)

(19) (20) (21)

America Eastern Judicial (•) SS District of Pennsylvania (•) I have carefully read the foregoing statement consisting of pages 1 to , inclusive, which is a correct transcript of my answers to the questions asked me on the day of , 20–, at the offices of Criminal Investigation, Internal Revenue Service, Philadelphia, Pennsylvania, relative to my federal income tax or other violation. I hereby certify that the foregoing answers are true and correct, that I have made the corrections shown and have placed my initials opposite each correction, and that I have initialed each page of the statement. Subscribed and sworn to before me this month/day/year. Special Agent Reporter, do hereby certify that I took the foregoing statement of - in shorthand, personally transcribed it from my shorthand pages, and initialed each page.

Exhibit 9.4.5-5 (06-30-1998) Memorandum of Interview
(1) (2) (3) (4) In re: Name and address of subject(s) being investigated Date and time of interview: Tuesday, July 20••••a.m. to p.m Place: Location of interview Present: a. Taxpayer, witness, etc. b. Internal Revenue Agent (Accompanying officer) c. Special Agent Interview conducted by Special Agent••. Note: All pertinent information relating to the interview should be in the memorandum in some logical manner, either in order of topics discussed, importance, chronological, or any other appropriate order. Special Agent Internal Revenue Agent (Accompanying officer) I (prepared) (dictated) this memorandum on , 20–, after refreshing my memory from notes made during and immediately after the interview with (taxpayer or witness name).

(5)

(6) (7) (8)

Internal Revenue Manual - 9.4.5 Interviews (Cont. 1)

Special Agent I certify that this memorandum has recorded in it a summary of (10) all pertinent matters discussed with on 20–. (11) Internal Revenue Agent (Accompanying officer)

(9)

Exhibit 9.4.5-6 (06-30-1998) Informal Notes or Diary Entries
On Wednesday July–20–at 10:00 a.m., I questioned Tom Brown of 1124 Euclid Street, NW Washington, D.C. 20017 in his office, 117 Elm Street, Washington, DC, about his purchase of a 20– sedan from Smith Motors Inc. He stated that he purchased the sedan, bearing vehicle identification number 1173945, for (1) $32,250.00 from Sam Smith, President of Smith Motors, and that he gave Mr. Smith his personal check number 117, dated 20– for $32,250.00. He agreed to submit an affidavit relating to his purchase. Internal Revenue Service Special Agent King, of Baltimore, Maryland, witnessed the interview which was concluded at 10:47 a.m. (2) Special Agent•••••••••• July–20–

Exhibit 9.4.5-7 (03-14-2002) Document 5661, Statement of Rights (Non-Custody) & (In-Custody)
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Exhibit 9.4.5-8 (06-30-1998) Form 5228, Waiver of Right to Remain Silent and of Right to Advice of Counsel
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Internal Revenue Manual - 9.4.6 Surveillance and Non-Consensual Monitoring

Chapter 4. Investigative Techniques Section 6. Surveillance and Non-Consensual Monitoring

9.4.6 Surveillance and Non-Consensual Monitoring
q q q q q q q q q q q q q q q

9.4.6.1 Overview 9.4.6.2 General 9.4.6.3 Surveillance and Undercover Distinguished 9.4.6.4 Surveillance at Public Meetings 9.4.6.5 Surveillance Checklist 9.4.6.6 Risk Assessment Guide 9.4.6.7 Electronic Surveillance 9.4.6.8 Internet-Related Investigative Activities 9.4.6.9 Video Surveillance 9.4.6.10 Aerial Surveillance 9.4.6.11 Report of Electronic Surveillance Information Received From State or Local Agencies Exhibit 9.4.6-1 2703(d) Order Exhibit 9.4.6-2 Preservation Letter Exhibit 9.4.6-3 Application for Pen Register Exhibit 9.4.6-4 Court Order for Pen Register

9.4.6.1 (09-05-2008) Overview
1. Enforcement activities include a wide spectrum of Criminal Investigation (CI) activities. Surveillance is an enforcement technique used to obtain information, leads, and evidence. Criminal Investigation surveillance techniques include the following types of surveillance: A. physical/visual B. electronic C. internet

Internal Revenue Manual - 9.4.6 Surveillance and Non-Consensual Monitoring

D. video E. aerial surveillance

9.4.6.2 (09-05-2008) General
1. The following applies to CI physical/visual surveillance techniques: A. Surveillance may be conducted as part of a subject, primary, or general investigation. B. A journeyman level special agent (GS-1811-12 and above) may conduct surveillance as deemed necessary. A special agent below the journeyman level must obtain prior approval from the Supervisory Special Agent (SSA) for all surveillance activity except under those circumstances where immediate surveillance is necessary and the SSA cannot be contacted. In such instances, the special agent should advise the SSA as soon as practicable of the circumstances that precluded obtaining prior approval. C. If, during the surveillance, the special agent must assume an identity other than his/her own requiring cover documents, approval for use of these documents must be obtained from the Director, Field Operations or his/her designee (see LEM 9.14.3, Undercover Operations). D. Surveillance conducted in a high crime area, either on foot or in a vehicle, requires the participation of at least two special agents. Surveillance requiring the use of a vehicle should be conducted in a government owned vehicle that has two-way radio equipment.

9.4.6.2.1 (09-24-2003) Documentation of Surveillance Activity
1. The following documentation is required: A. Daily notes of pertinent surveillance activity must be prepared by all participants. B. Written summary of daily notes must be prepared at the completion of surveillance.

9.4.6.2.2 (09-05-2008) Reasons for Conducting Surveillance

Internal Revenue Manual - 9.4.6 Surveillance and Non-Consensual Monitoring

1. The following are some of the reasons for conducting surveillance: A. to obtain evidence of a crime or to identify persons who have indicated they have committed or intend to commit a crime, or who may be involved in the crime being investigated B. to locate persons by watching locations and associates historically visited by the subject of the surveillance C. to obtain detailed information about a subject's activities D. to corroborate the reliability of informants E. to locate hidden property F. to obtain probable cause necessary to secure a search warrant G. to obtain information for later use in interrogations or interviews H. to develop leads and information received from other sources I. to know, at all times, the whereabouts of an individual

9.4.6.3 (09-05-2008) Surveillance and Undercover Distinguished
1. It is important to distinguish between those investigative techniques which are used in surveillance activities and those which may be utilized during certain undercover operations.

9.4.6.3.1 (09-24-2003) Surveillance Characteristics
1. The following characteristics apply to surveillance activities. A. The purpose is to observe ongoing activities and individuals. B. Interaction with subjects and third parties is usually not initiated. C. Conversations are incidental to the surveillance.

Internal Revenue Manual - 9.4.6 Surveillance and Non-Consensual Monitoring

D. Conversations are not monitored or recorded. E. The special agent has limited cover. The purpose of the cover is to protect the integrity of the surveillance. F. Local special agents are used. G. Special agents need not be trained in undercover techniques. H. See subsection 9.4.6.8 concerning internet surveillance. 2. Surveillance activity bears little resemblance to an undercover operation. The following situations indicate the surveillance activity has evolved into an undercover operation: A. reliance on cover identities increases B. contacts with subjects and other individuals are more in-depth C. agents become participants, rather than mere observers of the activities of interest 3. The SAC is responsible for ensuring surveillance activities do not evolve into undercover operations without first obtaining the authorization set forth in IRM 9.4.8, Undercover Operations.

9.4.6.3.2 (09-24-2003) Undercover Operation Characteristics
1. The following characteristics apply to undercover operations: A. The purpose is to initiate or participate in activities with identified subjects or objectives. B. Interaction with subjects and third parties is sought. C. Undercover agents or other authorized individuals initiate and direct conversations to further the objectives of the operation. D. Conversations may be monitored and recorded. E. A covert identity is required to obtain evidence. This cover is used as a basis for contacts with targets or witnesses. However, the lack of a documented cover does not mean the

Internal Revenue Manual - 9.4.6 Surveillance and Non-Consensual Monitoring

activities engaged in do not constitute an undercover operation.

9.4.6.4 (09-05-2008) Surveillance at Public Meetings
1. Attendance at public meetings that promote conduct in violation of the Internal Revenue Code is to be distinguished from attendance at peaceful demonstrations in general opposition to the Sixteenth Amendment. Treasury Department policy directs that no information should be collected at peaceful demonstrations which involve the exercise of First Amendment rights without first contacting the office of the Treasury Under Secretary for Enforcement. In such situations, the SAC, with the concurrence of the Director, Field Operations will notify the Chief, CI, who will contact the Treasury Under Secretary for Enforcement. 2. At those public meetings that actually promote conduct in violation of the Internal Revenue Code, surveillance activities will be limited to: A. identifying the leading figures at the meeting B. obtaining information concerning methods used to violate tax laws 3. Special agents may identify those individuals who attend such meetings and who admit or indicate they: A. have committed or intend to commit a tax violation or other crime B. advocate that others commit violations of the tax law or commit other crimes C. advocate the use of threats or assault tactics in dealing with IRS personnel or other Federal, state, or local law enforcement personnel 4. An example of an appropriate surveillance technique for identifying individuals who attend public meetings and either admit or advocate the violation of laws, or otherwise express an intent to do so, is as follows: An unidentified member in the audience at a public meeting states that he/she has not filed Federal income tax returns for several years and never intends to file such returns again. Special agents may observe this person enter an automobile and record the license plate number on the automobile in order to attempt to properly identify him/her. If there is a likelihood the individual is driving a borrowed or leased automobile, or is riding with someone else, the agents may continue the surveillance in an attempt to establish a positive identification.

Internal Revenue Manual - 9.4.6 Surveillance and Non-Consensual Monitoring

9.4.6.4.1 (09-24-2003) Public Meetings Defined
1. The following criteria may be considered to determine whether or not a meeting is public: A. where the meeting will be held B. if members of the press will be present or involved C. if there are any unreasonable restrictions upon entry D. if public notice of the meeting has been given

9.4.6.4.2 (09-24-2003) Recording The Proceedings Of Public Meetings
1. Recording the proceedings of a public meeting is a permissible means of surveillance. 2. Consensual monitoring authorization must be obtained pursuant to IRM 9.4.7, Consensual Monitoring.

9.4.6.5 (03-02-1999) Surveillance Checklist
1. The surveillance team leader is responsible for reviewing the surveillance checklist. If the surveillance involves an undercover operation, refer to the applicable undercover checklist.

9.4.6.6 (09-05-2008) Risk Assessment Guide
1. A risk assessment must be completed to assess the potential risk of the surveillance activity. 2. The assigned special agent should comment on each of the considerations set forth in the risk assessment guide and record the level of risk (low, medium, or high) associated with each consideration. 3. The SSA and the SAC must review the completed risk assessment guide to determine if the operation can be accomplished safely.

Internal Revenue Manual - 9.4.6 Surveillance and Non-Consensual Monitoring

4. If the operation cannot be accomplished safely, the special agent should abandon any further planning activity. 5. All approved risk assessment forms should be maintained in the investigative folder or filed electronically.

9.4.6.7 (09-24-2003) Electronic Surveillance
1. The following subsections refers to electronic surveillance and the monitoring of electronic communications.

9.4.6.7.1 (09-05-2008) General
1. The "Electronic Communications Privacy Act" (ECPA) of 1986, Pub. L. No.99-508, 100 Stat.1848, amended Title III of the Omnibus Crime Control and Safe Streets Act of 1968 (18 USC §2510 et. seq.). This legislation significantly revised Title III to reflect technological advances in electronic communications. It also added provisions: (1) specifying how government entities may obtain access to stored electronic communications; and (2) updating the provisions relating to pen registers and trap-and-trace devices. The ECPA provisions amended or modified the following statutes: A. Title I-Interceptions of Communications and Related Matters (codified in 18 USC §2510 et. seq.). As originally enacted, the wiretap statute regulated the real-time acquisition of "wire" and "oral" communications. A "wire communication" is the transmission of human voice over a "wire" (" telephone circuit" ) or other means of electronic communication. An "oral communication" is a conversation between or among individuals in circumstances in which there exists an expectation that the communication will not be "intercepted." The ECPA added " electronic communications" to the wiretap statute and provided slightly different rules for obtaining orders for the real-time acquisition of such communications. B. The ECPA provides rules for the real-time acquisition of wire, oral, or electronic communications, as well as the acquisition of stored wire and electronic communications (see subsection 9.4.6.7.3). 2. Orders for real time interceptions (i.e., "wiretaps" ) have traditionally been referred to as "Title IIIs" or "T-IIIs" because the authority to obtain such orders originated in Title lll of the Omnibus Crime Control and Safe Streets Act of 1968. This section refers to such orders simply as "wiretap" orders.

Internal Revenue Manual - 9.4.6 Surveillance and Non-Consensual Monitoring

A. Title II-Stored Wire and Electronic Communications and Transactional Records Access (codified in 18 USC §2701 et. seq.). B. Title III-Pen Registers and Trap-and-Trace Devices (codified in 18 USC §3121 et. seq.). C. On October 25, 1994, Congress enacted the Communications Assistance for Law Enforcement Act, Pub. L. 103-414, Oct. 25, 1994, which amended certain provisions of Titles I, II, and III of ECPA and became effective on January 6, 1995. The Communications Assistance for Law Enforcement Act is intended to preserve the government's ability, pursuant to court order or other lawful authorization, to intercept communications involving advanced technologies (e.g., digital or wireless transmission modes), or features and services (e.g., call forwarding, speed dialing and conference calling), while protecting the privacy of communications and without impending the introduction of new technologies, features, and services. To guarantee that law enforcement agencies can continue to conduct authorized interception in the future, the Communications Assistance for Law Enforcement Act requires telecommunications carriers to ensure that their systems have the capability to: (1) isolate the content of targeted communications transmitted by the carrier within the carrier's service area; (2) isolate the information identifying the origin and destination of targeted communications; (3) provide intercepted communications and call identifying information to law enforcement agents so they can be transmitted over lines or facilities leased by law enforcement agents to a location away from the carrier's premises; and, (4) carry out interceptions unobtrusively, so targets are unaware of the interception and in a manner which does not compromise the privacy and security of other communications. The Communications Assistance for Law Enforcement Act allows the industry to develop the standards to implement the equipment. D. On October 25, 2001, Congress passed the United Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism (USA Patriot Act) of 2001, Pub.L. 107-56, Oct. 25, 2001, which became effective on October 26, 2001. The purpose of the USA Patriot Act is to deter and punish domestic and international terrorist acts, as well as to enhance law enforcement investigatory tools. Title II (Enhanced Surveillance Procedures) of the USA Patriot Act amends certain provisions of ECPA, the Communications Assistance for Law Enforcement Act and 18 USC Chapters 119 (Wire and Electronic Communications Interception of Oral Communications), 121 (Stored Wire and Electronic Communications and Transactional Records Access) and 206 (Pen Registers and Trap and Trace Devices. 3. Interception of wire, oral, or electronic communications without the consent of a party to the communication. A. Non-consensual Monitoring of Oral and Wire Communications -

Internal Revenue Manual - 9.4.6 Surveillance and Non-Consensual Monitoring

The non-consensual interception of oral and wire communications is restricted to those investigations which involve the felonies listed in 18 USC §2516. Although, that section does not refer to tax crimes, the felonies listed therein include 18 USC §1956 and 18 USC §1957 (money laundering offenses), and certain offenses for which 31 USC §5322 provides the criminal penalties related to currency reporting offenses. IRS policy therefore restricts the use of non-consensual interception of oral and wire communications to "extremely limited situations" and only in "significant money laundering investigations." B. Non-consensual monitoring of Electronic Communications 18 USC §2516(3) authorizes the real time interception of electronic communications to investigate any federal felony. C. Access to Stored Electronic Communications -18 USC §2703 specifies the means by which law enforcement (government) may obtain access to stored electronic communications and transactional records. D. Title 18 USC §3122 authorizes the use of pen registers and trap and trace devices for investigations of all Federal felonies.

9.4.6.7.1.1 (09-05-2008) Restrictions on Electronic Surveillance Techniques
1. The permanent installation of concealed microphones, recording equipment, and similar devices in IRS offices is prohibited. Temporary installations are permitted only when authorized in accordance with the requirements for consensual and non-consensual monitoring. 2. The use of transmitters or other devices used to assist in trailing vehicles or personal property is permitted (see subsection 9.4.6.7.5 and 18 USC §3117). 3. Although mechanical devices may be used to intercept, overhear, or record conversations at public telephones, pursuant to the procedures outlined in 18 USC §2510, et seq., extreme care must be exercised to segregate conversations of innocent third parties from conversations of the identified subject(s). In each instance of monitoring, the equipment must be installed immediately prior to monitoring the identified subject and removed immediately thereafter. Due to the potential for inadvertent monitoring of innocent third party conversations and the elevated standard of probable cause required for this type of monitoring, it is rarely used; however, extreme caution should be exercised when this technique is utilized. 4. Miniature recorders and radio transmitters will not be used surreptitiously in conducting routine surveys and interviews with third parties unless consensual monitoring is authorized.

Internal Revenue Manual - 9.4.6 Surveillance and Non-Consensual Monitoring

5. Field offices may not purchase, fabricate, or arrange for the manufacture of any equipment or accessories designed to acquire communications of any type without obtaining approval from the Director, Security and Technical Operations (CI:S:STO) or his/her designee. The acquiring field office shall enter all such equipment into the Criminal Investigation Equipment Control System (CIECS). 6. Permission to employ eavesdropping devices may only be granted to special agents or to personnel acting under their direction. The approval process, prohibitions, and limitations outlined in this section apply equally to non-IRS personnel who act at the direction of special agents. 7. Title 18 prohibits the use of radio scanners to listen to transmissions on wireless telephone frequencies (e.g., mobile telephones or cordless telephones). Monitoring of wireless transmissions requires a wiretap order pursuant to 18 USC §2518. Normally, citizens band radio transmissions may be monitored unless there is reason to believe that a base station is using a wire link supplied by a common communications carrier. 8. A search warrant issued pursuant to Rule 41, Federal Rules of Criminal Procedure, is required to obtain evidence that cannot be observed from a public place with the naked eye. Federal statutes and the Supreme Court have placed restrictions on the use of sense enhancing devices. The local Criminal Tax attorney should be consulted prior to the use of such technology.

9.4.6.7.2 (09-05-2008) Real Time - lnterceptions of Communications and Related Matters
1. The "wiretap statute" , 18 USC §2510 et. seq., governs the interception of wire, oral, and electronic communications in transmission (i.e., "real-time" interceptions) through the use of electronic, mechanical, or other devices.

9.4.6.7.2.1 (09-05-2008) Definitions
1. Contents are defined by 18 USC §2510(8) to include any information concerning the substance, purpose, or meaning of any given communication. 2. A wire communication is defined as a communication that involves the human voice being transmitted through the use of a wire, cable, or similar method between the points of origin and reception. (See 18 USC §2510(1) and (18).) In addition, tone-and-voice pagers are included within the definition of a wire communication, and the interception of the human voice segment must be treated the same as a wire interception. A conversation on a telephone is a wire communication.

Internal Revenue Manual - 9.4.6 Surveillance and Non-Consensual Monitoring

3. An oral communication is "any oral communication uttered by a person exhibiting an expectation that such communication is not subject to interception under circumstances justifying such expectations, but this term does not include any electronic communication." A conversation between two or more individuals who have a reasonable expectation that the conversation will not be intercepted constitutes an oral communication. 4. An electronic communication is defined as "any transfer of signs, signals, writing, images, sounds, data, or intelligence of any nature transmitted in whole or in part by a wire, radio, electromagnetic, photo-electronic, or photo-optical system that affects interstate or foreign commerce." The term electronic communication does not include communications containing the human voice. An electronic communication includes the "real-time" point-to-point transmission of, for example, digital display pager information, electronic mail, computer-to-computer transmissions, facsimiles, transmissions, and private video transmissions (but not video surveillance). 5. Interception means "the aural or other acquisition of the contents of any wire, electronic, or oral communication through the use on any electronic, mechanical, or other device." 6. Electronic, mechanical or other device is defined by 18 USC §2510(5) to include "any device or apparatus which can be used to intercept a wire, oral or electronic communication other than." Examples of such a device or apparatus include: A. Any telephone or telegraph instrument, equipment or facility, or any component thereof (i) furnished to the subscriber or user by a provider of wire or electronic communication service and used by the subscriber or user...in the ordinary course of its business or (ii) being used by a provider...in the ordinary course of its business or by an investigative or law enforcement officer in the ordinary course of his duties. B. A hearing aid or similar device being used to correct subnormal hearing to no better than normal.

Note:
Merely overhearing a conversation by listening in on an extension telephone or using a "normal" hearing aid is outside the definition of an interception because the telephone set and hearing aid are excluded from the definition of an "electronic or mechanical device." 7. Consent is defined to mean that one or more of the parties to a wire, oral, or electronic communication has given his/her prior permission that such communication may be intercepted. In the Federal system, one party’s consent is needed, even if the other parties to the conversation are unaware that the communication is being intercepted or recorded.

Internal Revenue Manual - 9.4.6 Surveillance and Non-Consensual Monitoring

9.4.6.7.2.2 (09-05-2008) Access to "Real-Time" Oral Communication - Wiretaps
1. A "wiretap" is the acquisition of the contents of a wire or oral communication through the use of any electronic, mechanical, or other device where an expectation exists that the communication is not subject to interception. See subsection 9.4.6.7.1(3)(a) for a discussion of those offenses for which wiretaps may be authorized. 2. The following are not covered by the wiretap statute: A. use of pen registers or trap and trace devices; authority for the use of these techniques is found in 18 USC §3122 B. overhearing of conversations without the aid of electronic, mechanical, or other devices C. radio or television broadcasts readily accessible by the public D. tone-only pagers per 18 USC §2510 (12)(B) E. electronic tracking devices, also called transponders or beepers (18 USC §3117) F. marine and aeronautical communication systems per 18 USC §2511(2)(g)(ii)(IV) G. public safety radio systems H. amateur radio operator services, citizens band radio, and general mobile radio services I. electronic communications which are readily accessible by the general public J. physical/visual surveillance K. individuals’ use of telephone extensions 3. Consensual monitoring where one of the parties consents to the monitoring of the conversation or internet communication is addressed and specifically excepted out of the wiretap statute.

9.4.6.7.2.3 (09-05-2008) Disclosure and Derivative Use Orders
1. An order to intercept wire, oral, or electronic communication may be obtained only to investigate

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those offenses enumerated in 18 USC §2516 (Title 26 offenses are not included). However, if the contents of intercepted wire, oral, or electronic communications relate to other criminal acts, that evidence may be used by other law enforcement officers (including CI special agents) in furtherance of their investigations, including Title 26 offenses. Title 18 USC §2517 sets forth a statutory scheme under which the disclosure and use of intercepted oral, wire, or electronic communications is permitted. 2. Title 18 USC §2517(1) permits law enforcement officers (obtaining officers) who obtain intercepted wire, oral, or electronic communications to disclose such evidence to other law enforcement officers (receiving officers) as is appropriate in the performance of the obtaining and receiving officers’ duties. 3. Title 18 USC §2517(2) permits law enforcement officers who have lawfully obtained or received intercepted wire, oral, or electronic communications, or evidence otherwise derived from intercepted wire, oral, or electronic communications, to use the contents of that evidence to the extent such use is appropriate for the proper performance of his/her official duties. 4. Title 18 USC §2517(3) permits law enforcement officers who have obtained or received information from intercepted wire, oral, or electronic communications, or evidence otherwise derived from intercepted communications, to disclose such information while giving testimony under oath in any Federal or state, criminal, or civil proceeding. This includes testimony before a grand jury. 5. Title 18 USC §2517(5) requires that a court order, referred to as a "derivative use order," be obtained prior to any disclosure as defined in 18 USC §2517(3), of intercepted communications relating to offenses other than those specified in the order of authorization or approval to intercept. Such an order must be obtained prior to any law enforcement officer making any testimonial disclosure of information or evidence relating to intercepted wire, oral, or electronic communications, or evidence derived from such intercepted communications. Such an application should be made as soon as practicable. The derivative use order must be based upon the court's finding that the information and evidence to be disclosed was otherwise properly intercepted. Failure to obtain such an order can result in the dismissal of the case or subject the officer to liability for civil damages related to the unauthorized disclosure.

9.4.6.7.2.4 (09-05-2008) Evaluation of Wiretap Information
1. As soon as practicable, information or evidence received by CI special agents from other law enforcement officers that originated from intercepted wire, oral, or electronic communications, or evidence otherwise derived from the intercepted communications or transcripts thereof, will be referred to the SAC, or his/her designee, who should immediately evaluate the potential use for criminal and civil tax purposes.

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2. If it is apparent that the information or evidence is likely to or will be used by IRS in a criminal or civil judicial proceeding, the SAC, or his/her designee, should immediately ascertain whether an 18 USC §2517(5) order covering use by the IRS has been obtained. If an order has not yet been obtained, the SAC or his/her designee should contact and consult with the supervisory Assistant United States Attorney (AUSA) to ensure the order is obtained prior to disclosure.

9.4.6.7.2.5 (09-24-2003) Wiretap Approval Process
1. Three situations exist where approval is required for IRS CI special agents' participation in investigations where non-consensual monitoring of voice communications occurs: A. When CI special agents are present in the wire room and do NOT have the responsibility of monitoring conversations as they occur. B. Criminal Investigation monitoring of non-consensual conversations where an agent from another agency prepared the affidavit in support of an application for monitoring. C. Criminal Investigation monitoring of non-consensual conversations where an agent from CI prepared the affidavit in support of an application for monitoring.

9.4.6.7.2.5.1 (09-05-2008) Criminal Investigation Special Agents Present in the Wire Room, but DO NOT have the Responsibility of Monitoring Conversations
1. IRS CI special agents can provide valuable assistance in some investigations using the nonconsensual monitoring technique where the assistance DOES NOT involve the real-time monitoring of conversations. The duties may require a scheduled presence in the wire room and require significant resources. The duties include oversight of occurring activity, issuing surveillance assignments, reviewing previously recorded conversations, etc. 2. Approval of these situations is required in writing by the SAC and must address the significance of the investigation, any issues concerning staffing needs, and any CI equipment to be used during the operation.

9.4.6.7.2.5.2 (09-05-2008) Criminal Investigation Monitoring of Non-Consensual Conversations When Criminal Investigation IS NOT the Affiant Agency

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1. A copy of the affidavit and a memorandum from the field office through the Director, Field Operations to Special Investigative Techniques (CI:OPS:SIT) is required. The memorandum must include the following information: A. The complete background of the investigation, including the other participating Federal, state and local law enforcement agencies involved in the investigation. The name of the criminal organization and the criminal offenses which are being investigated. B. The significance of the target, organization, or compliance problem being investigated. The type of phone line, telephone number(s) to be monitored, and subscriber information should also be mentioned, e.g., telephone line, cellular telephone, etc. C. Financial information, e.g., how the organization launders proceeds (amount of money being wired, increments, and currency seized to date). D. Why CI participation in the monitoring is necessary, e.g., due to the volume of calls, or CI has the financial expertise to analyze the information as it is being received to prevent minimization of conversations that other officers or agents might not properly recognize as being material to the financial aspects of the investigation. E. The amount of CI resources needed. This number should include separate categories covering the number of special agents actually monitoring the calls and the number of special agents who will assist in surveillance or related support duties. 2. Upon receipt of the affidavit and memorandum, CI:OPS:SIT will prepare a request for the concurrence of the Chief, CI, and a routing slip seeking the approval from the Deputy Commissioner, IRS.

9.4.6.7.2.5.3 (09-05-2008) Criminal Investigation Monitoring of Non-Consensual Conversations When Criminal Investigation IS the Affiant Agency
1. A copy of the affidavit and a memorandum from the field office, through the Director, Field Operations, to Special Investigative Techniques is required prior to obtaining the court order. The memorandum must include the following information: A. The complete background of the investigation, including the other participating Federal, state and local law enforcement agencies involved in the investigation. The name of the criminal organization and the criminal offenses which are being investigated. B. The significance of the target, organization, or compliance problem being investigated.

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C. The type of phone line, telephone number(s) to be monitored, and subscriber information should be mentioned, e.g., telephone line, cellular telephone, etc. D. Financial information, e.g., how the organization launders proceeds (amount of money being wired, increments, and currency seized to date). E. The opinion and any recommendations from the field office’s Criminal Tax attorney. F. Why CI participation in the monitoring is necessary, such as CI has the financial expertise to analyze the information as it is being received to prevent minimization of conversations that other officers or agents might not properly recognize as being material to the financial aspects of the investigation. G. The amount of CI resources needed should be listed in the memorandum. This number should include separate categories covering the number of special agents actually monitoring the calls and the number of special agents who will assist in surveillance or related support duties. 2. Upon receipt of the affidavit and memorandum, CI:OPS:SIT will forward the affidavit to Division Counsel/Associate Chief Counsel (Criminal Tax) seeking their advice. Special Investigative Techniques will prepare a request for the Chief, CI’s, concurrence and a routing slip seeking the approval from the Deputy Commissioner, IRS.

9.4.6.7.2.6 (09-05-2008) Reports, Extensions, Expansions and Closing Reports Related to Wiretaps When CI Special Agents Are Actively Monitoring Conversations
1. Copies of the 10-day reports and closing reports must be sent to CI:OPS:SIT within 15 days of the completion of the report. 2. If an extension of time is required, the Director, Field Operations is the approving official. A request must be prepared by the field office providing a summary of the results obtained to date and a reason for the extension. Upon approval by the Director, Field Operations, the request will be electronically forwarded to CI:OPS:SIT. 3. If an expansion is required to add new telephone lines related to the same targets and the same offenses, the Director, Field Operations is the approving official. A request must be prepared by the field office providing a summary of the results obtained to date and a reason for the expansion. Upon approval by the Director, Field Operations, the request will be electronically

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forwarded to CI:OPS:SIT. 4. If it becomes necessary to include additional targets or additional offenses, approval by the Deputy Commissioner, IRS is required. The procedures for the expansion to add new targets or add new offenses mirrors the procedures required to initiate a wiretap request. See IRM 9.4.6.7.2.5.2 or see IRM 9.4.6.7.2.5.3.

9.4.6.7.2.7 (09-05-2008) Access to "Real Time" Electronic Communications
1. The "real time" or simultaneous interception of digital display pagers in transmission, transmission of electronic mail, computer-to-computer transmissions, facsimile transmissions, and private video transmissions (but not video surveillance) are all covered by the wiretap statute. See IRM 9.4.6.7.2.1. (Access to stored electronic communications 18 USC §2703.) 2. The interception of electronic communications can provide valuable information and evidence relating to any Federal felony under the investigative jurisdiction of CI, including Title 26 offenses. Under 18 USC §2516(3), the order authorizing such interception must conform to 18 USC §2518. However, cost, technical requirements, and encryption are all factors that can impact its actual use.

9.4.6.7.2.7.1 (09-05-2008) Approval/Authorization for "Real Time" Electronic Communications
1. Prior to seeking a wiretap order for electronic communications, the special agent must prepare an affidavit for the application and a memorandum seeking approval. Both must be forwarded from the SAC, through the Director, Field Operations, to CI:OPS:SIT. The field office Criminal Tax attorney and the Computer Telecommunications Coordinator (CTC) in the local United States Attorney’s office should be contacted for assistance in preparing those documents. The memorandum must include the following information: A. The complete background of the investigation, including the other participating Federal, state and local law enforcement agencies involved in the investigation. The name of the criminal organization and the criminal offenses which are being investigated. B. The significance of the target, organization, or compliance problem being investigated. C. Specific description of the device(s) that the field office intends to monitor. D. Financial information, e.g., how the organization launders proceeds, how tax evasion is being promoted, and/or the scope of the problem.

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E. The opinion, and any recommendations from, the field office’s Criminal Tax attorney. F. Why CI participation in the monitoring is necessary, e.g., CI has the financial expertise to analyze the information as it is being received to quickly respond to financial transactions as they occur or the details of complex transactions can only be obtained through the computer information since the financial activity is conducted offshore. G. The amount of CI resources needed should be listed in the memorandum. 2. Upon receipt of the affidavit and memorandum, CI:OPS:SIT will review the request and forward it to the Director, Operations Policy and Support (CI:OPS) for approval.

9.4.6.7.2.7.2 (09-05-2008) Reports, Extensions, Expansions and Closing Reports Related to "Real Time" Access of Electronic Communications
1. Following approval to seek a wiretap order, copies of the 10-day reports and closing reports must be sent to CI:OPS:SIT. 2. If an extension of time is required, the Director, Field Operations is the approving official. A request must be prepared by the field office providing a summary of the results obtained to date and a reason for the extension. Upon approval by the Director, Field Operations, the request will be electronically forwarded to CI:OPS:SIT. 3. If an expansion is required to add new internet sites or e-mail accounts related to the same targets and the same offenses, the Director, Field Operations is the approving official. A request must be prepared by the field office providing a summary of the results obtained to date and a reason for the expansion. Upon approval by the Director, Field Operations, the request will be electronically forwarded to CI:OPS:SIT. 4. The same procedures used to initiate a request must be followed to add targets or offenses to a wiretap order. Such expansion requests must be approved by the Director, CI:OPS.

9.4.6.7.3 (09-05-2008) Stored Wire and Electronic Communications
1. Title 18 USC §2701 et. seq., specifies how governmental entities may obtain access to stored electronic communications, transactional records, and subscriber records.

9.4.6.7.3.1 (09-24-2003)

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Stored Electronic Communication/Transactional Information/Subscriber Information
1. Stored electronic communications (defined in 18 USC §2510) includes those electronic messages temporarily stored by an electronic communications service provider prior to delivery to the intended recipient or stored as a backup. The term also includes information stored with a " remote computing service" . The term includes display data stored in digital-display pagers and cell phones, stored electronic mail, stored computer-to-computer transmissions, stored telex transmissions, stored facsimile data, and private video transmissions. 2. The statute applies only to data stored with an electronic communications service provider. The real-time interception of transmissions to tone-and-voice-pagers is governed by the wiretap statute. (A tone-and-voice-pager enables callers to transmit short voice messages to a subscriber's pager). The acquisition of transmissions to or from display pagers and facsimile transceivers during the transmission(s) requires the approval of the Deputy Commissioner, IRS, an affidavit, an application (which must be approved by the Department of Justice), and a court order obtained in accordance with 18 USC §2516 and §2518 (see IRM 9.4.6.7.2.7).

9.4.6.7.3.2 (09-05-2008) Disclosure of Stored Communications
1. Title 18 USC §2702 prohibits disclosure of electronic communications by providers of electronic communication services or remote computing services unless one or more of the following conditions is met: A. the information is given to its intended recipient or addressee B. the information is given to the government pursuant to a court order, search warrant, or subpoena C. the subscriber/customer gives consent D. the disclosure is to a facility used to forward the communication E. the disclosure is incident to testing equipment or quality of service F. the information was obtained inadvertently and specifically refers to a crime 2. Title 18 USC §2702(c)(4) permits, but does not require, a service provider to disclose to law enforcement either content or non-content customer records in emergencies involving an eminent act which could result in the death of or cause serious physical injury to any person as provided

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by the USA Patriot Act.

9.4.6.7.3.3 (09-05-2008) Judicial Process for Obtaining Stored Electronic Communications, Transactional Information, and Subscriber Information
1. Title 18 USC §2703 specifies the means by which a governmental entity may obtain access to stored electronic communications. The statute prohibits electronic communications providers from voluntarily providing information to a governmental entity, and requires law enforcement to use either a search warrant, court order, or subpoena (as described below in paragraphs 2, 3, 4, and 5) in order to obtain the following classes of information: A. The contents of electronic communication in electronic storage with an electronic communication service (such as unopened e-mail) or with a remote computing service (such as records in off-site archives). B. Basic subscriber information; including the name, address, local and long distance telephone toll billing records, telephone number or other subscriber number or identity (such as temporarily assigned Internet Protocol (IP) addresses); length of service; and types of services the customer or subscriber utilized. C. Transactional information, which includes all other records or information pertaining to a subscriber or customer that are not included in a) or b). 2. If the contents of a wire or electronic communication have been in storage for 180 days or less, the government must obtain a search warrant, based on probable cause, to obtain access to the contents. Notice to the subscriber or customer is not required. Because the statute requires the use of a search warrant to obtain this class of information, it is not necessary to prepare an Enforcement Action Approval Form or to justify the use of the warrant as the least intrusive means to obtain the Information. Form 9809, Request for Stored Electronic Information is used to obtain the appropriate authorization for the search warrant application and execution. A. The government may obtain the contents of an electronic communication that has been in storage for more than 180 days using a search warrant, a court order issued under 18 USC §2703(d), or a grand jury subpoena or administrative summons. B. Notice need not be given to the subscriber if a search warrant is used to obtain the information. The statute requires that the customer or subscriber to whom the information pertains be notified if the government obtains a court order or issues a subpoena or summons for the information. That notice may be delayed for up to ninety days pursuant to 18 USC §2705. (This initial 90-day period can be extended for an additional 90-day period

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upon application to the court for an extension under 18 USC §2705(4).) Exhibit 9.4.6 - 1 is a sample of a 18 USC §2703(d) Order. 3. The above-stated transactional information may be obtained, without providing notice to the subscriber, by any of the following means: A. a search warrant B. a court order for disclosure per 18 USC §2703(d) C. consent from the customer or subscriber of the service D. submission of a formal written request, pursuant to a law enforcement investigation concerning telemarketing fraud, for the name, address, and place of business of a subscriber or customer of such provider, when a subscriber or customer is engaged in telemarketing as defined in 18 USC §2325 4. Basic subscriber information may be obtained with any of the means described in (3) above or with a grand jury subpoena or administrative summons, without providing notice to the subscriber. 5. Title 18 USC §2703(f) imposes on the provider of wire or electronic communication services or a remote computing service the obligation, upon the written request of a governmental entity, to take all necessary steps to preserve records and other evidence in its possession pending the issuance of a court order or other process. Exhibit 9.4.6-2 is a sample of a 18 USC §2703(f) "Preservation Letter" . A. The Preservation Letter requires providers of wire or electronic communication services or remote computing services to retain records for a period of 90 days. This initial 90-day period can be extended for an additional 90-day period upon a renewed request by the governmental entity.

9.4.6.7.3.4 (09-05-2008) Approval/Authorization for Stored Electronic Communications, Transactional Information, and Subscriber Information
1. The investigating special agent should consult with the local Computer Investigative Specialist (CIS) and Criminal Tax attorney about access to stored electronic or wire communications to determine the proper method of obtaining the desired information. The use of court orders and search warrants to obtain stored electronic information, transactional information, or subscriber information requires approval by the SAC on Form 9809. After SAC approval, the Form 9809

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must be forwarded electronically to CI:OPS:SIT for filing. The SAC must seek the endorsement of the United States Attorney to apply for a court order to obtain stored electronic communications. Local procedures must be followed to obtain the court order. If preparation of an affidavit is necessary, the local Criminal Tax attorneys opinion regarding the affidavit’s legal sufficiency and form should be obtained. The SAC approval is not required when a subpoena is used for obtaining the information.

9.4.6.7.3.5 (09-05-2008) Closing Reports for Stored Electronic Communications/Transactional Information/Subscriber Information
1. In situations where a court order or search warrant was used, a memorandum will be submitted to CI:OPS:SIT. The memorandum is due 15 working days after receipt of the information by the field office. The memorandum should contain information identifying the investigation name and number, the allegations involved, the reason the information was acquired, and a description of the information obtained.

9.4.6.7.4 (09-05-2008) Pen Registers and Trap and Trace Devices
1. Devices connected to telephone circuits may be used to obtain the telephone numbers dialed by a target telephone (pen register) or the telephone number dialing the target telephone (trap-and-trace devices). The acquisition of dialed numbers is governed by 18 USC §3121 thru §3126. Title 18 USC §3121 was amended by the USA Patriot Act to prohibit obtaining contents of any wire or electronic communication via pen register or trap and trace device. 2. Pen registers and trap-and-trace devices are subject to Fourth Amendment requirements when physical intrusion is needed for the installation of such devices. Limited entries to install this equipment are permitted provided they are done pursuant to a valid search warrant.

9.4.6.7.4.1 (09-05-2008) Use of Pen Registers
1. A pen register, which is more appropriately called a "Dialed Number Recorder" (DNR), is a mechanical instrument attached to a telephone line, usually at a central telephone office. A pen register: A. records the outgoing numbers dialed on a particular telephone B. registers incoming calls

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C. does not identify the telephone number from which the incoming call originated unless caller identification (ID) service is present, the service is on, and no one has blocked the caller ID service 2. Use of pen registers is restricted to recording the area code, telephone number, and extension dialed. Pen registers may not be utilized for gathering transactional data input by a touch-tone phone (i.e., account numbers, amounts, etc.). 3. If possible, equipment that does not record transactional data should be used. Gathering transactional data input by touch-tone phone constitutes interception of electronic communication in transmission and requires a wiretap order that must be obtained under the procedures in subsection 9.4.6.7.2. 4. Pen registers and other types of telephone number recorders can be utilized only when authorized by court order, except as provided by 18 USC §3121(b). They may be used in both tax and nontax investigations where CI has the authority to investigate and locate fugitives from justice who are the subject of a CI investigation. A fugitive from justice is defined as a person against whom criminal action (e.g., return of an indictment, filing of a complaint or information, or a conviction) has been taken, and who has fled the jurisdiction to escape prosecution or to avoid serving a sentence. Requests for pen registers to locate fugitives will be considered only for fugitives who are charged with felony violations. 5. Unless an exception is approved by the SAC, only IRS-owned pen registers and accessory equipment may be used in CI investigations. 6. The USA Patriot Act amended 18 USC §3121, §3123, §3124, and §3127 to clarify that the pen register and trap and trace statute applies to a broad variety of communication technologies. As a result, law enforcement may use pen registers and trap and trace device orders to trace communications on the Internet and other computer networks. 7. The USA Patriot Act added 18 USC §3123(a)(1) which gives Federal courts the authority to compel assistance from any provider of communication services in the United States whose assistance is appropriate to effectuate the order. 8. The USA Patriot Act added 18 USC §3123(a)(3) whereby law enforcement authorities are required to file a special report with the court whenever it is necessary to install a separate device, such as Etherpeek or the FBI’s DCS 1000, to collect the information sought. The special report must include: the identity of the officers who installed or accessed the device; the date and time the device was installed, accessed, and uninstalled; the configuration of the device at installation with any subsequent modifications; and the information collected by the device.

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9. The USA Patriot Act added 18 USC §3123(b)(1)(C) such that there are no geographic limitations placed upon pen registers and trap and trace devices; thus, pen register and trap and trace orders extend nationwide and are not limited to the jurisdiction in which the order was issued. The issuing court must, however, have jurisdiction over the crime under investigation

9.4.6.7.4.2 (09-05-2008) Request for Approval
1. The SAC, or his/her designee, will seek the endorsement of the US Attorney to apply for a court order pursuant to 18 USC §3123. Pen registers require approval by the SAC on Form 9170, Request for Pen Register and/or Trap and Trace Devices. After SAC approval, the Form 9170 must be forwarded electronically to CI:OPS:SIT for filing. 2. Upon final approval by the SAC, the investigating special agent should promptly contact the US Attorney for the purpose of obtaining a court order based upon an application by the AUSA pursuant to 18 USC §3122. (Exhibit 9.4.6-3 Application for Pen Register; Exhibit 9.4.6-4, Court Order for Pen Register). After approval by the magistrate or judge, the SAC, or his/her designee, will arrange for the timely shipment of a pen register(s) and other requested accessory equipment. 3. Orders pursuant to 18 USC §3123 which authorize the installation of pen registers or trap and trace devices shall also authorize the use of such devices for a period not to exceed 60 days. Extensions for a period not exceeding 60 days are available upon application for another court order pursuant to 18 USC §3122 and 18 USC §3123(C)(1) and (2).

9.4.6.7.4.3 (09-05-2008) Oral Requests
1. If time does not permit the completion of Form 9170, the information may be orally transmitted to the SAC. An oral request for approval must be confirmed in writing and submitted within 2 working days after the oral request is made. After the oral approval has been obtained, the investigating special agent will contact the US Attorney to apply for the necessary court order. The previously discussed approval process and routing of the Form 9170 applies. 2. Title 18 USC §3125 addresses emergency pen register installation prior to obtaining a court order and relates only to those situations involving the immediate threat of death or serious bodily injury, or conspiratorial activities characteristic of organized crime. The local Criminal Tax attorney and AUSA should be consulted to ensure the statute is followed.

9.4.6.7.4.4 (09-05-2008) Installation of a Pen Register

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1. The intentional installation or use of pen registers or trap and trace devices without first obtaining a court order under 18 USC §3123 is prohibited. In compliance with the prohibition, the following procedures must be completed in order to install a pen register. 2. Contact the telephone company to identify the line to which the pen register is to be attached. 3. If the telephone company does not have the personnel available to confirm the correctness of the line at the appearance point, the tech agent will do the following: A. A voltmeter must be attached to the identified line to determine if the telephone is in use. B. If the telephone is not in use, attach the telephone test set to the line and confirm that the line is the correct line. If someone attempts to use the line while the butt set is attached to the line, the butt set will be immediately disconnected and not be reconnected until it has been determined (using the voltmeter) that the line is not in use. C. Note that if physical intrusion is necessary for installation, a search warrant or consent is required. 4. After the pen register has been activated, the SAC will ensure that installers and operators are competent to operate the equipment. Adequate precautions will be taken to limit access to the pen register only to its operator and other necessary personnel. Upon completion of use, pen registers must be immediately returned to the issuing office. 5. Pen registers may not be utilized for gathering any transactional data inputted by a touch-tone phone (i.e., account numbers, amounts, etc.). 6. If the authorization is not utilized, a memorandum will be submitted to the SAC setting forth the reasons for not using the pen register. The memorandum will include the name of the investigations pursuant to which authorization was sought. 7. If an extension is necessary, submit a request per Form 9170 to the SAC for consideration. The request must summarize the information that has been obtained to date, and set forth the number of days the extension is sought. The extension may not exceed 60 days. 8. Requests to add additional phone numbers or equipment not specified in the original order must be made per Form 9170 and must set forth the reasons supporting the issuance of another order under 18 USC §3123. Include in the request the new telephone numbers to be monitored and the name(s) and address(es) of the subscribers. The request for an extension of time can be combined with this request where appropriate.

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9.4.6.7.4.5 (09-05-2008) Trap and Trace ("Grabber" )
1. A trap and trace device is also called a "grabber". It records the telephone numbers from incoming calls to a particular telephone. The device used by the telephone company is a TTS-176 device, an electronic switching system (ESS), or a cross bar switching facility. Like a pen register, no conversations will be recorded. Trap and trace procedures are necessary when attempting to monitor call forwarding. 2. Call forwarding is part of the trap and trace procedure. It requires a telephone company to identify which facility or number telephone calls are being forwarded. Historically, telephone companies have been reluctant to assist in trap and trace procedures or call forwarding monitoring unless the situation concerns threats to the President of the United States and/or involves a kidnapping. The statute now protects companies from any liability resulting from the use of such devices (see 18 USC §3124(d)). 3. The telephone company may be able to provide a record of incoming calls to the telephone of a subject under investigation. This depends on the type of switching facility (exchange) involved. This information can be as useful as a pen register/DNR. 4. Trap and trace service requires the same approval as pen registers/DNRs. Requests, extensions, and any deviations from requests must conform to the same procedures governing pen register requests and will be considered in the same manner. 5. Consider the availability and use of "caller ID" to obtain desired information prior to applying for a trap and trace authorization. 6. A court order under 18 USC §3123 is required. This order requires the same application and the same information as the order for installation of pen registers. 7. Whenever possible, before obtaining an order to trace incoming calls to a particular line, review the proposed trace with the local telephone company's security officer. The security officer should be able to advise of foreseeable problems in the execution of the proposed order. 8. Except in very rare instances, orders should be limited to Electronic Switching System (ESS) or No. 5 cross-bar facilities. The likelihood of successfully tracing telephone calls through a system using less sophisticated equipment is extremely low and requires an inordinate amount of time and equipment. 9. Where possible, all orders should also be limited with respect to the following:

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A. Scope: An order should minimize the number of lines on which trap and trace service is requested at a given switching facility. B. Geography: It is preferable that the order limit traces to "all calls originating in X city" or "all calls originating within a y-mile radius of Z town." C. Duration: Orders must limit the trace to 60 days, subject to an extension of an additional 60 days if the supervising attorney determines it to be necessary. D. Hours: If it is possible to anticipate when calls will come into a target phone, tracing should be limited to these hours. 10. Seek the tracing information from the telephone company no more than once a day and, except in unusual circumstances, only during regular business hours. 11. Each order should contain a clause forbidding the telephone company to disclose that a trace is or has been in progress as provided by 18 USC §3123(d). A telephone company should be given the opportunity for a closed hearing before the issuing judge to seek limitations of any proposed order if the telephone company feels the order is too burdensome. 12. The SAC's approval of a Form 9170, Request for Pen Register and/or Trap and Trace Devices, is required to obtain authorization to use trap and trace devices. After SAC approval, the Form 9170 must be electronically forwarded to CI:OPS:SIT.

9.4.6.7.5 (03-04-2009) Use and Approval of Electronic Tracking Devices
1. The use of electronic tracking devices without a court order is permitted in those tax and non-tax investigations that CI has authority to investigate, if either of the following conditions are met: A. The person in lawful possession of the vehicle or personal property consents to the installation. B. The vehicle is accessible without violating the owner's/driver's reasonable expectation of privacy (e.g., a vehicle is parked on a public street rather than in the owner's closed garage). C. The tracking device will be installed on the vehicle in a manner that would not violate a reasonable expectation of privacy (e.g., installed by a magnetic attachment to a portion of the vehicle that can be reached without entering the vehicle or any closed compartment such as the latched engine compartment or the locked trunk).

Internal Revenue Manual - 9.4.6 Surveillance and Non-Consensual Monitoring

2. A Court Order is required if the vehicle is located where a reasonable expectation of privacy exists or the tracking device will be installed on the vehicle in a manner that infringes on a reasonable expectation of privacy. 3. The use of an electronic tracking device requires approval by the SAC on Form 9854, Request for Electronic Tracking Devices. After SAC approval, the Form 9854 must be forwarded electronically to Special Investigative Techniques for filing. Approval by telephone may be obtained in situations requiring immediate action. The above approval process must be completed and the form submitted within two working days after the oral request is approved. In situations requiring a court order, as described above, the SAC should consult with the local Criminal Tax attorney concerning the legal sufficiency and form of affidavits in support of an application for a court order authorizing the installation and use of an electronic tracking device(s) prior to contacting the US Attorney’s office.

9.4.6.8 (09-05-2008) Internet-Related Investigative Activities
1. The Internet provides a wealth of information that may be relevant to CI investigations because it has become a widely used means to communicate and to conduct business. Records of Internet transactions may also be important evidence to investigators. As a general rule, the same policies and procedures that govern investigations in the physical world apply to investigations in cyberspace. Agents should therefore apply the most analogous real-world rules and procedures to each online investigative technique they seek to use. For example, law enforcement officials may obtain information from publicly accessible online sources and facilities (web sites, listservs, news groups, chat rooms, etc) under the same conditions they may obtain information from other sources generally open to the public (e.g., newspapers, libraries, etc.). Similarly, the same policies, procedures, and restrictions that apply to physical world investigative activities (for example, restrictions on access to private places, agent identification, and undercover activities) apply equally to online investigative activities. 2. Special rules apply to the interception of online communications and the gathering of information kept by online service providers (see subsections 9.4.6.7.2; 9.4.6.7.3; and 9.4.6.7.4). 3. Special agents should consult with the CIS in the local field office, the Electronic Crimes Program in HQ or the Computer and Telecommunications Coordinator in the local US Attorney’s office for advice on conducting online investigations or with questions on using the Internet for investigative purposes. 4. The CIS of the Electronic Crimes Program can also provide technical support in the use of techniques, tools, and non-CI network computer equipment needed to conduct many online investigative activities.

Internal Revenue Manual - 9.4.6 Surveillance and Non-Consensual Monitoring

9.4.6.9 (09-05-2008) Video Surveillance
1. The wiretap statute does not prohibit the use of video equipment to record or monitor a public meeting. Any attempt to acquire the participants’ conversations by the video equipment or with other devices, however, must be done in accordance with the provisions of the wiretap statute. The local Criminal Tax attorney should be consulted for advice on the application of the wiretap statute. 2. A journeyman level special agent has authority to conduct video surveillance. 3. A search warrant pursuant to 18 USC §3102 and Rule 41(a) of the Federal Rules of Criminal Procedure (Fed. R. Crim. P.) is required to obtain evidence that cannot be observed from a public place with the un-aided eye. If video surveillance from a place not accessible to the public, or if sense enhancing technology is contemplated, the local Criminal Tax attorney should be consulted prior to using this technique.

9.4.6.9.1 (09-05-2008) Video Surveillance of Public View Areas
1. Use of a video camera to observe activity that is viewable by the public (either because members of the public can lawfully access the area where this activity occurs or can see the activity from a lawful vantage point) does not generally constitute an intrusion into a constitutionally protected private interest. A warrant is generally not required to visually record activities that occur in publicly accessible areas such as public parks, sidewalks, streets, open fields, and other areas outside the curtilage of a house that is not commonly accessible to the public. 2. The Fourth Amendment does not require law enforcement officers to shield their eyes when passing a home on a public thoroughfare. Officers may, without a search warrant, use video surveillance to assist them in observing certain areas even when the areas are within the curtilage of a house if others can observe these same areas from a place they are lawfully entitled to be (i.e., from the street, sidewalk, or an open field). This would include unobstructed video surveillance of driveways, front doorways, and yards of businesses or houses. 3. Special rules apply to the video surveillance of the workplace. In general, video surveillance of an area of the workplace that is accessible and viewable by others during work hours may be done without a search warrant. Video surveillance of employee work areas that are not publicly accessible or viewable usually may not be undertaken without a search warrant. The local Criminal Tax attorney should be consulted when there is any question whether a particular area is publicly accessible.

Internal Revenue Manual - 9.4.6 Surveillance and Non-Consensual Monitoring

9.4.6.9.2 (09-05-2008) Public Access and Other Areas Entitled to Fourth Amendment Protection
1. Video surveillance into public areas, e.g., a rest room, where one would reasonably expect his/her actions to be private, must comply with Fourth Amendment standards and may require a warrant.

9.4.6.9.3 (09-24-2003) Video Surveillance When Consenting Party is Present
1. Special agents may also observe and record (video) private meetings between undercover officer(s) or cooperating witness(es) and subjects if the premises are controlled by the special agent or witness.

9.4.6.10 (09-05-2008) Aerial Surveillance
1. Aerial surveillance is not subject to the wiretap statute and is generally not considered to constitute a search within the meaning of the Fourth Amendment. 2. Supreme Court rulings are based on whether or not a person has a constitutionally protected reasonable expectation of privacy. This involves: A. whether the person had an actual exception of privacy B. whether society recognizes that expectation as being reasonable 3. The Supreme Court has held an individual taking measures to restrict views of his activities does not preclude an officer's observation from a public vantage point where he/she has a right to be and which renders the activities clearly visible. In these cases, the police observations takes place within public navigable airspace, in a physically non-intrusive manner, and any member of the flying public in the airspace who cared to glance down could have made the same observations. The Fourth Amendment does not require a search warrant in order to observe what is visible to the un-aided eye. If, however, some enhancement device is used during the overflight, the general rule may not apply. 4. The SAC will approve, in writing, the use of aerial surveillance. The request must include a summary of the investigation, the reason why other surveillance techniques will not work, the budget issues, and the minimum requirements of the pilot/crew.

Internal Revenue Manual - 9.4.6 Surveillance and Non-Consensual Monitoring

9.4.6.10.1 (09-05-2008) Use of Aircraft
1. An aircraft may be used in investigative situations such as: A. surveillance B. electronic tracking C. communications relay D. aerial photography E. undercover support F. expeditious transport of special agents or equipment in emergency situations 2. Federal, state, and local government aircraft should be used where available. When not available, aircraft may be rented or leased from a local aviation service. When a decision is made to rent or lease an aircraft, the following procedures should be used: A. prepare and forward a requisition to the appropriate payment office; or B. establish an imprest fund in support of the operation 3. To pilot an aircraft, special agents must meet the following minimum standards: A. 500 hours flight time B. 100 hours cross-country flight time C. 100 hours of actual or simulated instrument flight time D. FAA Commercial Pilot certificate (appropriate category) E. current FAA instrument ratings F. current FAA Second-Class Medical certificate 4. The minimum crew for aircraft surveillance will be a pilot and an observer. Except for the pilot,

Internal Revenue Manual - 9.4.6 Surveillance and Non-Consensual Monitoring

only special agents or other Federal, state, or local law enforcement agents or officers will conduct surveillance. 5. All aircraft will be operated under Federal Aviation Administration (FAA) certification and Federal Aviation Regulations. Aircraft will be flown in accordance with the applicable flight manuals and performance limitations. Any deviation shall be approved in advance by the local FAA office. Aircraft accidents or incidents shall be reported to the National Transportation Safety Board (NTSB) in accordance with NTSB Regulations.

9.4.6.11 (09-24-2003) Report of Electronic Surveillance Information Received From State or Local Agencies
1. The SAC will submit a report through proper channels, including the Director, Field Operations to the Chief, CI, concerning electronic surveillance information received from state or local agencies. The report must be submitted within 30 days after the information is received. 2. The report of electronic surveillance information received from a state or local agency shall contain the following information: A. the investigation name and number (if applicable) B. the names of the persons whose conversations were monitored, if applicable C. a summary of the information obtained, including the names of all individuals mentioned in the monitored conversations D. the locations (address) where any monitored conversations took place and, if applicable, the telephone number of the telephone on which the monitoring equipment was installed E. the name of the agency that conducted the electronic surveillance F. the periods of time that the equipment was used (dates and times) G. the name of the IRS employee who has custody of the records relating to the monitoring, or the name and location of the IRS activity to which the information was transmitted

Exhibit 9.4.6-1 (09-24-2003) 2703(d) Order

Internal Revenue Manual - 9.4.6 Surveillance and Non-Consensual Monitoring

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Exhibit 9.4.6-2 (09-24-2003) Preservation Letter
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Exhibit 9.4.6-3 (09-24-2003) Application for Pen Register
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Exhibit 9.4.6-4 (09-24-2003) Court Order for Pen Register
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Internal Revenue Manual - 9.4.7 CONSENSUAL MONITORING

Chapter 4. Investigative Techniques Section 7. CONSENSUAL MONITORING

9.4.7 CONSENSUAL MONITORING
q q q q q q q q

9.4.7.1 9.4.7.2 9.4.7.3 9.4.7.4 9.4.7.5 9.4.7.6 9.4.7.7 9.4.7.8

Overview Consensual Monitoring Defined and Distinguished Consensual Monitoring of Telephone Conversations Consensual Monitoring of Non-Telephone Conversations Extensions Consensual Monitoring Closing Report(s) Preparation Submission Safeguarding Records of Consensual Monitoring Special Responsibilities for Sensitive Type Investigative Equipment

9.4.7.1 (09-19-2001) Overview
1. This section contains policy and procedural information concerning the investigative use of electronic or mechanical monitoring devices with the consent of one or more parties to conversations. For procedural reasons, conversations are categorized as either telephone or nontelephone.

Note:
Before any monitoring may take place, there must be no question as to whether the use of any investigative device is legal under the circumstances.

9.4.7.2 (09-24-2007) Consensual Monitoring Defined and Distinguished
1. The term consensual monitoring, as used herein, means the investigative interception, overhearing, or recording of a private conversation by the use of mechanical, electronic, or other devices with the consent of at least one, but not all, of the participants (as contrasted to nonconsensual monitoring, where no participant consents). Consensual monitoring may be used in

Internal Revenue Manual - 9.4.7 CONSENSUAL MONITORING

general, primary, and subject investigations. 2. Supervisory approval is not required for monitoring conversations with the consent of all parties to the conversation. 3. The monitoring of conversations with the consent of one of the participants may be used whenever it is both appropriate and necessary to gather evidence related to a criminal offense. However, this technique is subject to careful oversight in order to avoid any unwarranted invasion of privacy or perception of impropriety. 4. To protect the integrity of all consensual monitoring activities: A. Recordings must be preserved in their entirety, including information unrelated to the investigation. B. A record of all contacts with the subject of the monitoring request must be maintained. The record must reflect all contacts with the subject, including those that were not recorded. This record will include the consensual monitoring authorization number, the case number, date of contact, and the subject of that contact. An explanation as to why a contact was not monitored must also be included.

9.4.7.3 (09-24-2007) Consensual Monitoring of Telephone Conversations
1. This section contains policies and procedures concerning consensual monitoring of telephone conversations.

9.4.7.3.1 (09-24-2007) Authorization of Telephone Consensual Monitoring
1. Generally, the Special Agent in Charge (SAC) has authority to approve telephonic consensual monitoring requests. However, in the following situations, additional authorization is required: A. The Director, Field Operations is the approving official for telephonic and non-telephonic consensual monitoring requests when the request relates to an undercover operation and the undercover operation does not involve the circumstances described in paragraphs (b) or (c) below. B. The authorization of the Chief or Deputy Chief, Criminal Investigation (CI), is required for consensual monitoring of telephone conversations where the recording device is to be installed in a place or manner that will create the risk of an inadvertent prohibited non-

Internal Revenue Manual - 9.4.7 CONSENSUAL MONITORING

consensual monitoring. The request for approval must contain sufficient information to apprise the authorizing officials of the need for installing the recording device in the manner proposed and the precautions that will be taken to prevent non-consensual monitoring. C. The approval of the Director, Operations Policy and Support (CI:OPS), and the Director, Office of Enforcement Operations, Criminal Division, Department of Justice (DOJ), is required for monitoring telephonic conversations when:
q

The monitoring relates to an investigation of a member of Congress, a federal judge, a member of the Executive Branch at Executive Level IV or above, or a person who has served in such capacity within the previous two years. The monitoring relates to an investigation of the Governor, Lieutenant Governor, or Attorney General of any state or territory, or a judge or justice of the highest court of any state or territory, and the offense investigated is one involving bribery, conflict of interest, or extortion relating to the performance of his/her official duties. Any party to the communication is a member of the diplomatic corps of a foreign country. Any party to the communication is/has been a member of the Witness Security Program and that fact is known to the agency involved or its officers. The consenting or nonconsenting person is in the custody of the Bureau of Prisons (BOP) or the United States Marshals Service (USMS). The Attorney General, Deputy Attorney General, Associate Attorney General, any Assistant Attorney General, or the United States Attorney in the field office where an investigation is being conducted has requested the investigating agency to obtain prior written consent before conducting consensual monitoring in a specific investigation.

q

q

q

q

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Internal Revenue Manual - 9.4.7 CONSENSUAL MONITORING

2. Form 8041, Request for Authorization to Use Electronic Equipment and Consensual Monitoring, will be used to request approval. For monitoring authorizations not associated with an undercover operation, the request should state the exact number of days for which the authorization is sought, not to exceed 60 days, and the date the monitoring will begin. Expiration of a consensual monitoring authorization associated with a Group I or II undercover operation will coincide with the expiration of the undercover authorization period, unless the monitoring involves a circumstance described in paragraph 1(c) above. Monitoring authorizations associated with these situations are limited to 90 days, but may be renewed upon submission of a written request to the DOJ, Office of Enforcement Operations. A. When the recording device will be concealed, the request must include an explanation of the precautions taken to ensure that non-consensual monitoring will not occur. For example, the monitoring device will be removed or disconnected after each authorized recording; or the monitoring device and telephone will be in a secure area with access limited to those individuals involved in the monitoring. This information should be included in Item 20 on Form 8041. B. IRM 9.11.3, Investigative Property, contains information on the types of equipment that can be used and specific restrictions and responsibilities regarding the use of sensitive-type investigative equipment. C. The Form 8041 related to telephonic consensual monitoring approved by the SAC is not forwarded to the Special Investigative Techniques Section, (CI:OPS:SIT) until after the monitoring has concluded (see paragraph (6) below). All other approved consensual monitoring requests are forwarded to CI:OPS:SIT at the time the request is approved. 3. In grand jury investigations, the officials approving the monitoring requests must be added to the grand jury access list. 4. A Confidential Informant or Cooperating Witness consenting to the monitoring of a conversation must be established as such pursuant to IRM 9.4.2, Sources of Information. 5. At the discretion of the approving official, the request may be oral, provided Form 8041 is submitted within 5 working days. 6. Within 15 working days after the completion of the monitoring activities (or attempted monitoring activities) for each specific authorization, Form 6795, Consensual Monitoring Report, will be submitted to the approving authority. This report should include a copy of the approved Form 8041. The completed Forms 6795 and 8041 must be submitted electronically to CI:OPS:SIT. If no monitoring occurred, the report is due within 15 working days of the authorization's expiration date.

Internal Revenue Manual - 9.4.7 CONSENSUAL MONITORING

9.4.7.4 (09-24-2007) Consensual Monitoring of Non-Telephone Conversations
1. This section contains policies and procedures concerning consensual monitoring of non-telephone conversations.

9.4.7.4.1 (09-24-2007) Authorization for Non-Telephone Consensual Monitoring
1. The Director, Field Operations is the approving official for telephonic and non-telephonic consensual monitoring requests when the request relates to an undercover operation and the undercover operation does not involve the circumstances described in paragraphs (2) or (3) below. The Director, Field Operations is also the approving official in non-telephonic consensual monitoring not related to an undercover operation and the circumstances described in paragraphs (2) or (3) are not present. 2. The authorization of the Chief or Deputy Chief, CI, is required for consensual monitoring of nontelephone conversations where the recording device is to be installed in a place or manner that will create the risk of an inadvertent prohibited non-consensual monitoring. The request for approval must contain sufficient information to apprise the authorizing officials of the need for installing the recording device in the manner proposed and the precautions that will be taken to prevent non-consensual monitoring. 3. The approval of the Director,