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.

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.

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.

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.

While controlling a CI/CW, special agents will not:

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.

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.

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.

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 be condoned by the IRS or would be beneficial to an IRS investigation.

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.

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.

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.

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.

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:

For the purpose of this subsection, the term " serious crime" means any crime that is a felony under Federal or state law.

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.

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.

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:

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.

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.

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.

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.

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).

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.

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.

He/she should maintain this position pending instructions from his/her supervisors and advice from the attorney for the government.

The special agent's failure to disclose this information may have several results:

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.

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.

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.

In rare instances, the Chief, CI, will divulge the names of other confidential informants to TIGTA, Office of Audit when deemed necessary.

In the event TIGTA management determines it is essential to contact a CI to meet an audit or investigation objective, TIGTA, Office of Investigations personnel will make that contact.

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.

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.

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.

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.

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:

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.

Instructions concerning rewards for information submitted to the IRS are contained in IRM 25.2, Information and Informants Rewards.

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.

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.

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.

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.

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 made to move the prisoner to another facility to assure protection.

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.

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.

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.

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.

A similar report is required by DOJ on CI investigations that involve the participation of an IRS protected witness or Confidential Informant.

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:

Reportable results include:

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.

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.

Reports involving witnesses or CIs under Justice's Witness Security Program will be coordinated by WSC.

The US Marshals Service will be requested to provide assistance when the release or transfer of a Federal prisoner is required as it is their responsibility for safekeeping and transporting in Federal prisoners.

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.

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.

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:

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.

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.

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.

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.

State prisoners will be handled in the same manner consistent with the procedures outlined when the United States Marshal’s Service is not available.

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.

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).

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.

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.

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.

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).

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.

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 Authority.

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.

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.

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.

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.

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)).

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.

Exchange of information is permissible in pre-indictment, as well as post-indictment investigations.

Information that may be exchanged includes:

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.

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.

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.

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.

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).

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.

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).

Prosecution reports are processed in the normal fashion, subject to any additional requirements, (see IRM 9.5.12, Processing Completed Criminal Investigation Reports).

Simultaneous indictments and/or filing of charges is preferred if circumstances permit, making close coordination by the designated investigation supervisor imperative.

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).

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).

The competent authority should be alerted if any disclosure is contemplated.

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.

Publicity in simultaneous or unilateral indictments should be handled in accordance with the procedures detailed in IRM 9.3.2, Publicity and Internal Communications.