7 August 2001

See contents of full IRS Handbook of Criminal Investigation: http://cryptome.org/irs-ci/irs-ci.htm

Handbook 9.4
Investigative Techniques


Chapter 1
Information Gathering, General, Primary, and Subject Investigations

Contents

[9.4] 1.1  (03-03-1999)
Overview

  1. This chapter describes the authorized techniques for each of the CI's four types of information collecting activities.

[9.4] 1.2  (03-03-1999)
Authorization to Gather Information

  1. The Commissioner of Internal Revenue Service has been charged with the responsibility to enforce the Internal Revenue Laws through Treasury Directive 150-10. Compliance with Internal Revenue laws cannot be determined solely with reference to information on returns and documents filed with the Service, the Service will obtain information from other sources. However, only information necessary for the enforcement and administration of the tax laws which the Service is authorized and directed to enforce will be sought. P-1-1.
  2. In order to protect the public from unnecessary intrusion into their private and financial affairs, the Service has authorized the use of certain activities and techniques in the administration of the laws based on the individuals culpability.

[9.4] 1.3  (03-03-1999)
Activities Not Requiring Authorized Investigations

  1. The following actions may be undertaken to identify an individual or entity without initiating an investigation:
    1. Clip news articles.
    2. Access IRS data bases.
    3. Maintain liaison with other law enforcement agencies.
    4. *Order Tax Returns.
    5. *View tax information through command code RTVUE and/or BRTVU through IDRS.
    6. Talk to informants.
    7. Identify individuals through automobile license checks.
    8. Visually inspect a home, office, real estate, or property to identify an individual.
    9. Record the results of any activity in items a. through h.
    NOTE:
    *Special Agents working on a Financial Investigative Task Force may scrutinize tax return information only after an ex parte order has been obtained or a related statute call has been made by the Division Chief.
  2. Once an individual or entity is identified as one requiring further evaluation of potential criminal allegations, a primary investigation must be initiated.

[9.4] 1.4  (03-03-1999)
General Investigations

  1. A General Investigation (GI) is a study, survey, or canvassing activity related to a group, activity or CI Program (Sub-Program) to identify possible noncompliance with the laws enforced by Internal Revenue Service. A GI is opened to identify particular groups of taxpayers (or members thereof) that may be engaged in criminal noncompliance. Specialized GI's track special agent time in regard to specified activities.
  2. A GI normally involves those areas of noncompliance for an occupation, industry or CI Program (Sub-Program) that is of specific interest. When the focus shifts from the group to specific potential criminal activity of an identified individual or entity, a Primary Investigation will be opened. As additional information is developed which indicates prosecution potential exists, a Subject Criminal Investigation will be opened. The Primary Investigation and the Subject Criminal Investigation will be linked to the GI from which they emanated.
  3. General Investigations are also used in three other situations to specifically track special agent's time. These situations are referred to as Specialized General Investigations and are related to the following;
    1. Liaison Contacts
    2. Sub Programs
    3. Imprest Funds


    No Primary or Subject Investigations will be related to Specialized General Investigations.

[9.4] 1.4.1  (03-03-1999)
Investigative General Investigations

  1. Investigative GIs are a means of gathering, soliciting, and documenting evidence within such a category as an occupation, geographic area, or specific economic activity to identify specific individuals or entities for noncompliance with the laws. The investigative GI typically is of interest to a particular district, but may also be used by the Headquarter's Office.

[9.4] 1.4.2  (03-03-1999)
Specialized General Investigations-- Liaisons

  1. This type of GI is designed to track special agent's time used on liaison contacts and efforts with federal, state, and local law enforcement agencies.
  2. This includes time spent on multi-agency task forces such as Organized Crime and Drug Enforcement Task Force (OCDETF), High Level Drug Leader Program (HLDL), High Intensity Drug Trafficking Area (HIDTA), Strike Force and Financial Investigative Task Forces (FITF). Criminal Investigation personnel are assigned to FITFs to provide financial expertise to information-gathering efforts of the U.S. Attorney's office.

[9.4] 1.4.3  (03-03-1999)
Specialized General Investigations-- Sub Programs

  1. General Investigations should be initiated when a district participates in certain initiatives such as the Service Center Questionable Refund Program.
  2. Only time on investigative efforts that are general in nature should be charged to this type of GI. The district coordinator for these programs will be the main person charging time to these GIs. Other agents may only charge time as appropriate.

[9.4] 1.4.4  (03-03-1999)
Specialized General Investigations-- Imprest Funds

  1. General Investigations should be initiated for various authorized imprest fund purposes. Examples of imprest fund GIs are as follows:
    1. Undercover agent maintenance activities.
    2. Contact agent maintenance activities.
    3. Special use vehicles (e.g. surveillance vans.)

[9.4] 1.4.5  (03-03-1999)
Ownership of a General Investigation

  1. General Investigation ownership will always be in the office initiating the investigation. Ownership can never be transferred or changed.

[9.4] 1.4.6  (03-03-1999)
Initiating a General Investigation

  1. Usually, a special agent will initiate a GI based on alleged noncompliance problems within specific categories of individuals.
  2. A Form 4930, Criminal Investigation Division General/Primary/Subject Investigation Report, will be used to authorize all GIs. Consult the Criminal Investigation Management Information System (CIMIS) Handbook (9.9) for information concerning the items that need to be completed. When initiating a GI, the originator should describe the purpose and scope of the GI in item 12, Allegations of Non-Compliance.

[9.4] 1.4.6.1  (03-03-1999)
Purpose of the General Investigation

  1. The purpose for establishing the GI should be stated clearly. The purpose should include existing allegations and indications of noncompliance such as informant communication, previous subject investigations, referrals from other divisions, etc.

[9.4] 1.4.6.2  (03-03-1999)
Scope of the General Investigation

  1. The scope should include the following;
    1. Type of contacts anticipated outside the Service other than those authorized for a GI.
    2. Type of information to be gathered.
    3. Availability of the information/records to be gathered.

[9.4] 1.4.7  (03-03-1999)
Approving a General Investigation

  1. All GIs, except highly sensitive ones, will be approved by the Chief, CI or Director, National Operations Division. This approval authority may not be redelegated.
  2. General Investigations involving highly sensitive matters, such as inquiries relating to members of the clergy, politicians, attorneys, and accountants need the approval of the District Director or Director, National Operations Division. Specialized GIs that maintain cover documents for undercover agents and contact agents must also be approved by the District Director.

[9.4] 1.4.8  (03-03-1999)
Expansion of an Approved General Investigation

  1. If the original purpose or scope of an approved GI is expanded, the expansion needs to be in writing and signed by the approving official.

[9.4] 1.4.9  (03-03-1999)
Authorized General Investigation Techniques

  1. In making investigative inquiries, a special agent is allowed to disclose the name of a taxpayer associated with a particular group for identification purposes in a effort to secure information that is relevant and necessary to the investigation. Investigative inquiries are limited.

[9.4] 1.4.9.1  (03-03-1999)
Techniques Relating to General Investigations

  1. Techniques that are permitted for GIs are as follows:
    1. Searches within existing IRS records and databases.
    2. Inquiries at federal, state, and local governmental agencies, including state and local tax authorities.
    3. Contact with the original informant and other informants who are believed to possess pertinent information.
    4. Contact with foreign (tax treaty and other nations) government bodies similar to b. above; however, these must be coordinated through Headquarters Operations Division OP:CI:O:N.
    5. Surveillance.
    6. Consensual Monitoring.
    7. Undercover.
    8. Sources outside the government as long as there is no disclosure of a specific individual or entity and the inquiry is relevant to the investigation.
    9. Form letters, pattern letters, or circular letters to persons outside the Service for information on individuals or entities as long as no individual or entity name is disclosed. (These letters, if requesting identical information about a group of unnamed individuals, may require administrative clearance of the Office of Management and Budget under the Paperwork Reduction Act of 1980 (PRA).)

[9.4] 1.4.9.2  (03-03-1999)
Techniques Relating to Pure Title 31 General Investigations

  1. In addition to the techniques listed above, contact may be made with participants and institutions identified in a currency report to identify the source, disposition, and nature of the currency transaction.

[9.4] 1.4.9.3  (03-03-1999)
Techniques Relating to Potential Fraudulent Refund Schemes

  1. The Service Center Criminal Investigation Branch (CIB) reviews returns to detect fraudulent refund schemes. The type of activities which are permitted at this stage are as follows:
    1. Contact with employers of potentially fictitious persons is permitted, but limited to determining the validity of the employee's earnings and withholding.
    2. Limited third party inquiries are also allowed to determine the true identity of a filer of potentially false or fraudulent claims being evaluated by the service center questionable refund detection team. This includes verification of addresses used by individuals responsible for filing the fraudulent return.
  2. The Service Center Criminal Investigation Branch (CIB) will initiate refund scheme primary investigations when the scheme warrants additional investigation. CIB will prepare the Form 4930 and input it into CIMIS. A copy of the 4930 will be retained in the scheme file in CIB. CIMIS will place the PI in an appropriate district QRP case pool. These schemes must be evaluated within 30 days.
  3. Activities that are to be charged to QRP GIs at the district are:
    1. Meetings with preparers and transmitters which are designed to educate them in identifying suspicious returns which should be brought to the attention of the IRS.
    2. Contacts with the U.S. Post Office to intercept fraudulent refund checks.

[9.4] 1.4.9.4  (03-03-1999)
Techniques and Activities Relating to Organized Crime and Drug Enforcement Task Force (OCDETF) General Investigations-- Liaison

  1. The time expended by CI is being reimbursed by Department of Justice for certain expenditures incurred as a result of participation in the OCDETF. All GI time needs to be included on the Criminal Investigation Monthly Activity Report (Form 5043A). Examples of OCDETF activities in a GI include:
    1. Assisting open OCDETF investigations and/or prosecutions when CI does not have an open investigation.
    2. Evaluation and information gathering relating to an open non-CI OCDETF investigation being considered as a PI or a SI.
    3. Evaluation and information gathering time prior to the numbering of a Primary or Subject OCDETF investigation by the Core City Task Force Coordinators. This time is limited, however, to only 1 month for narcotics trafficking organizations and 3 months for money laundering organizations. All remaining time used for development of these cases should be charged to the HLDL General Investigation.
    4. Task Force Coordinator's time spent on general OCDETF duties.

[9.4] 1.4.9.5  (03-03-1999)
Techniques and Activities Relating to High Level Drug Leader (HLDL) General Investigations-- Liaison

  1. The HLDL program evolves from a Memorandum of Understanding between IRS and the Drug Enforcement Administration (DEA) which was last revised in 1980. This multifunctional program allows IRS to review DEA files in regard to Class I and II violators. The District Director, through the Chiefs, CI and Examination Division, will make the final determination as to which will be forwarded to CI and which will be audited by the Examination Division.

[9.4] 1.4.9.6  (03-03-1999)
Techniques and Activities Relating to High Intensity Drug Trafficking Area (HIDTA) General Investigations-- Liaison

  1. Districts may appoint a special agent to act as a liaison between the local CI office and the HIDTA Task Force. The liaison will work to ensure appropriate levels of cooperation between CI and the other individual agencies making up the local HIDTA Task Force.

[9.4] 1.4.9.7  (03-03-1999)
Techniques and Activities Relating to Financial Investigative Task Force (FITF) General Investigations-- Liaison

  1. Financial Investigative Task Forces are permitted to utilize the investigative tools, i.e. subpoenas, etc., authorized by the U.S. Attorney's office in assisting such task forces. However, tax return information may be used only if an ex parte order or related statute memo has been obtained.

[9.4] 1.4.9.8  (03-03-1999)
Techniques and Activities Relating to Strike Force General Investigations-- Liaison

  1. Districts that have individuals who derive substantial income from illegal activities and where the U.S. Attorney's office is active in the Strike Force/Racketeer program will initiate GIs to track time spent in this area. No additional unique techniques are authorized for this type of GI.

[9.4] 1.5  (03-03-1999)
Primary Investigations

  1. A Primary Investigation (PI) is one wherein an individual or entity is allegedly in noncompliance with the laws enforced by IRS and may have prosecution potential.
  2. A PI also relates to a group of individuals involved in a scheme which links them together and is alleged to be in noncompliance with the laws enforced by the IRS.
  3. A PI can be the parent of more than one Subject Criminal Investigation (SCI). It can also be closed without ever generating a SCI.

[9.4] 1.5.1  (03-03-1999)
Sources of Primary Investigations

  1. Primary Investigations come from many sources. Some are described below.

[9.4] 1.5.1.1  (03-03-1999)
Information Items

  1. Information which comes to the attention of a CI employee in the district is typically recorded on a Form 3949, Criminal Investigation Information Item. If the Chief elects to evaluate the information in the district, a PI will be initiated. See other Chapters in Handbook 9.4 and Handbook 9.5 and 9.8 for more information concerning information items.
  2. Information items in which a Form 211, Claim for Reward, is associated should be upgraded to a SCI or closed within 60 days. See Multifunctional Handbook, Payment to Informant--Form 211.

[9.4] 1.5.1.2  (03-03-1999)
Service Center Initiated Primaries

  1. Primary Investigations relating to Questionable Refund Program (QRP) schemes are initiated at the CIB. The district must decide within 30 days to upgrade the PIs to SCIs or return them to the Chief, CIB.

[9.4] 1.5.1.3  (03-03-1999)
Criminal Fraud Referrals

  1. Criminal fraud referrals received from Examination, Collection, or Employee Plans/Exempt Organizations forwarded through channels to CI will be numbered as PIs upon receipt.

[9.4] 1.5.1.4  (03-03-1999)
General Investigations

  1. Primary Investigations may evolve on individuals or entities from work done in the GI evaluation process. A PI should always be numbered when it appears that an identified individual or entity may have prosecution potential.

[9.4] 1.5.1.5  (03-03-1999)
Grand Jury Evaluation Requests

  1. Requests from the United States Attorney's office for IRS to participate in grand jury investigations will be numbered as PIs so that Special Agents can appropriately evaluate them and accurately record the time spent evaluating them.

[9.4] 1.5.1.6  (03-03-1999)
Direct Referrals (Prime Leads)

  1. An information item or group of information items received in CI which lacks criminal potential may be referred directly to the Examination or Collection Division when there is a firm indication of substantial civil tax potential. These direct referrals or prime leads are numbered as PIs for tracking purposes.

[9.4] 1.5.2  (03-03-1999)
Ownership of a Primary Investigation

  1. Primary Investigation ownership will always be the district office that initiated the investigation. Ownership can never be transferred.

[9.4] 1.5.3  (03-03-1999)
Initiating a Primary Investigation

  1. A Form 4930, Criminal Investigation Division General/Primary/Subject Investigation Report, will be used to authorize all PI's. The CIMIS Handbook 9.9 should be consulted to complete the form.

[9.4] 1.5.4  (03-03-1999)
Approving a Primary Investigation

  1. District Chiefs, CI approve and sign all initiating Forms 4930 for PIs. The authority to approve the initiation of a PI can be delegated through local delegation orders to the Branch Chief or Group Manager.

[9.4] 1.5.5  (03-03-1999)
Associate Identities to a Primary Investigation

  1. An associate identity to a Primary Investigation is an individual or entity that has a nexus to a scheme of alleged non-compliance identified in the Primary Investigation and in which the roles of the entities are yet to be fully determined.
  2. All associated entities will be tied to the primary investigation by completing a Form 4930A.
  3. The associated entity screen will enable each district identify if an individual or entity is tied to an investigation any where in the country. It will also assist in Freedom of Information Act requests and immunity clearance requests from U.S. Attorney's Offices.
  4. The associated entity screen will also alert the agent when closing a grand jury investigation to notify Counsel of the disposition of all related entities for which grand jury investigative authority was sought but were not numbered as a PI or SCI.

[9.4] 1.5.6  (03-03-1999)
Authorized Primary Investigative Techniques

  1. In addition to the techniques and activities approved for GIs, the following techniques and activities are approved for PIs:
    1. Contact with employers and other filers of information return documents for verification of data shown on the Forms W-2, W-4, 1099, 8300, 4789, etc.
    2. Assist other agencies in the execution of a search warrant, including interviewing subject and related individuals during the execution of the warrant. If CI is the affiant, must have a SI.
    3. Consensual monitorings.
    4. Mail covers.
    5. Discussions with the referring IRS officer.
    6. Contact with foreign (tax treaty and other nations) government bodies, including local tax authorities. These must be coordinated through Headquarters Operations Division OP:CI:O:N.
    7. Contact with the taxpayers by mail to verify their filing record using Letter 1509 (DO). This form letter will not be used to solicit an admission if there is good cause to believe that a taxpayer has willfully failed to file. Use of this form should be approved by the Chief, CI.
  2. In addition to the above activities, the following activities are permitted in QRP Primary Investigations:
    1. Contact with employers of potentially fictitious persons is permitted, but limited to determining the validity of the employee's earnings and withholding.
    2. Limited third party inquiries are also allowed to determine the true identity of a filer of false or fraudulent claims being evaluated by the service center questionable refund detection team. This includes verification of addresses used by individuals responsible for filing the fraudulent return.
  3. Special agents may disclose the name of the subject of a PI for identification purposes in an effort to secure information that is relevant and necessary to the investigation.

[9.4] 1.6  (03-03-1999)
Subject Criminal Investigations

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

[9.4] 1.6.1  (03-03-1999)
Ownership of a Subject Criminal Investigation

  1. Subject Criminal Investigation ownership may or may not be in the district office that initiated the SCI. Subject Criminal Investigation ownership can only be changed by transferring the SCI from the owning district to another district. This may not be done until approved by both Chiefs of the districts involved. An SCI and the PI to which it is associated may or may not have the same owner. Criminal Investigation Headquarters (CI hotline) must be contacted to perform the transfer of the investigation.
  2. The numbers for the CI hotline are as follows:
    • (202) 622-4260
    • (202) 622-5146 (Fax)

[9.4] 1.6.2  (03-03-1999)
Initiating a Subject Criminal Investigation

  1. A Form 4930, Criminal Investigation Division General/Primary/Subject Investigation Report, will be used to authorize all SCIs. The CIMIS Handbook 9.9 should be consulted to complete the form.

[9.4] 1.6.3  (03-03-1999)
Approving a Subject Criminal Investigation

  1. The authority to approve the initiation of SCIs rests with the Chief, CI. This approval authority can not be redelegated for a Title 18 section 1956 or 1957 charge.

[9.4] 1.6.4  (03-03-1999)
Subject Criminal Investigative Techniques

  1. An SCI is considered a full-scale criminal investigation and, therefore, can use the broad spectrum of investigative techniques which are available to the IRS Special Agent.
  2. An SCI is required for the execution of a search warrant when CI is the affiant. Agents can still assist other agencies in the execution of a search warrant, including interviewing subject and related individuals during the execution of the warrant. However, CI cannot interview third party and/or subjects after the execution of other agencies' warrants without a numbered subject investigation.

[9.4] 1.7  (03-03-1999)
Subject Seizure Investigation

  1. In order to capture time on Criminal or Civil seizure actions (Title 18-981, Title 18-982, Title 18-984, Title 26-7302 and Title 21-881), separate Subject Seizure Investigations (SSI) will be initiated apart from existing SI's. Only one SSI is numbered for a specific target. Do not number an SSI for each location or for each asset relating to the specific target.

[9.4] 1.7.1  (03-03-1999)
Ownership of a Subject Seizure Investigation

  1. Subject Seizure Investigation ownership may or may not be that of the district office that initiated the Investigation. Subject Seizure Investigation ownership can only be changed by transferring the investigation from the owner district to another district. This may not be done until approved by both chiefs of the districts involved. A Subject Seizure Investigation and the Primary Investigation to which it is associated may or may not have the same owner. CI Headquarters (CIMIS hotline) must be contacted to perform the transfer of the investigation.
  2. The numbers for the CIMIS hotline are as follows:
    • (202) 622-4260
    • (202) 622-5146 (Fax)

[9.4] 1.7.2  (03-03-1999)
Initiating a Subject Seizure Investigation

  1. A Form 4930, Criminal Investigation Division General/Primary/Subject Investigation Report, will be used to authorize all SSIs. If no PI exists, a PI and a SSI must be initiated at the same time. The CIMIS Handbook 9.9 should be consulted to complete the Form.

[9.4] 1.7.3  (03-03-1999)
Approving a Subject Seizure Investigation

  1. The authority to approve the initiation of SSIs rests with the Chief, Criminal Investigation. This approval authority can not be redelegated.

[9.4] 1.7.4  (03-03-1999)
Subject Seizure Investigative Techniques and Procedures

  1. Subject Seizure Investigations must always be associated with a Primary Investigation. Subject Seizure Investigations can be closed only when one of the following actions occurs:
    1. All the assets seized have been disposed.
    2. No assets were seized and no further action will be taken.
    3. The Subject Seizure Investigation was initiated to charge time assisting another agency's seizure investigation and no more time will be charged to the investigation.
  2. More information relating to seizure investigations and forfeitures can be found in Handbook 9.7.

Internal Revenue Manual  

Hndbk. 9.4 Chap. 1 Information Gathering, General, Primary, and Subject Investigations

  (03-03-1999)


05/02/2001 14:28:43 EST