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Part 9. Criminal Investigation

Chapter 3. Disclosure and Publicity

Section 1. Disclosure

9.3.1  Disclosure

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.

  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:

    1. 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

    2. information returns such as Forms W-2 or 1099

    3. 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:

    1. the fact that a person has filed a return

    2. the fact that a person is under investigation

    3. 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 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.

    1. 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:

    1. when corroboration of a taxpayer’s statements and/or records is needed

    2. when missing evidence is in the hands of third parties

    3. 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:

    1. a stenographer employed by the US Attorney

    2. a court reporter of the US District Court

    3. a reporter licensed or certified by any state as a court reporter or to take depositions

    4. 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:

    1. 26 USC §6103(n)—where the IRS contracts with a non-IRS reporter or stenographer

    2. 26 USC §6103(c)—a consent by the subject taxpayer in an investigation

    3. 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 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.

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:

    1. Inquiries are being sent only to third parties who are known or potential sources of information.

    2. The information sought is important to the investigation.

    3. The letter is professional in tone and neither offensive nor suggestive of wrongdoing by the taxpayer; and

    4. 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:

    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:

    1. 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.

    2. 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).

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 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.

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:

    1. 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).

    2. 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).

    3. 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:

    1. 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;

    2. 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:

    1. prevent the escape of those whose indictment may be contemplated but is not yet certain

    2. ensure freedom to the grand jury in its deliberations by protecting its members from annoyance and undue influence

    3. prevent subornation of perjury or tampering with witnesses

    4. 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:

    1. examine documents and records which are before the grand jury

    2. inspect the minutes of a grand jury proceeding

    3. 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 before the grand jury are to be given favorable consideration. This may be done provided that such witness:

    1. explicitly waives his/her privilege against self-incrimination

    2. is represented by counsel or voluntarily and knowingly appears without counsel

    3. 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:

    1. support an attack upon the indictment

    2. impeach a witness or refresh his/her recollection

    3. 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:

    1. an attorney for the government for use in the performance of his/her duty to enforce Federal criminal law

    2. 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

  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 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 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 tax-related 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:

    1. The taxpayer whose returns and return information are to be disclosed is or may be a party to the proceeding.

    2. The treatment of an item on the return is or may be related to the resolution of an issue in the proceeding or investigation.

    3. 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 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).

    1. 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.

    2. 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).

    3. 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 tax-related 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 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:

    • 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).

  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:

    • 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?

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 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:

    1. was committed in the furtherance of a violation of the Internal Revenue laws, or

    2. 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 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 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)
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:

    1. those personnel are formally appointed as Federal employees (rather than merely detailed)

    2. are assisting in a Federal investigation

    3. 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 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 tax-related 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:

    1. Ex parte Order - If the matter is not related to tax administration.

    2. 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 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:

    1. The returns and return information must relate to a taxpayer convicted of a criminal tax violation.

    2. 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.

    3. 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

    4. 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.

  3. Occasionally, US Probation Officers will request tax information from the IRS as part of a pre-sentence 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:

    1. 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)

    2. whether the IRS offers the information or a different agency requests the information

    3. 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:

    1. 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).

    2. 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.

    3. 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 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:

    1. name, social security number, address, and aliases of subject (if known).

    2. business or occupation of subject (if known)

    3. facts and circumstances surrounding the non-tax violation

    4. US Code sections believed to have been violated

    5. specific source of information, i.e., third party, taxpayer, taxpayer’s representative, taxpayer’s return

    6. the circumstances under which the information was obtained

    7. agency that this violation would be of interest, i.e., US Attorney (Judicial District), Strike Force Attorney (location), other agency (specify)

    8. system of Records from which information was obtained

    9. 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 non-tax 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 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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