7 August 2001

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

Handbook 9.3
Disclosure and Publicity


Chapter 1
Disclosure

Contents

[9.3] 1.1  (04-26-1999)
Overview

  1. Returns and return information are confidential and may not be accessed or disclosed except as authorized by the Internal Revenue Code (IRC) section 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 Service documents, including disclosure under the Freedom of Information Act and the Privacy Act, are published in Internal Revenue Manual (IRM) Part I, Disclosure of Official Information Handbook. This Chapter will only highlight some of the situations that are frequently encountered in Criminal Investigation (CI).
  3. The first section of this chapter will deal with the definition of disclosure terms. The sections after that discuss specific disclosure situations that occur in CI. The sections in this chapter are as follows:
    • Definition of disclosure terms.
    • IRC 6103 and the administrative investigation.
    • Federal Rule of Criminal Procedure (FRCrP) Rule 6(e), IRC 6103 and the federal grand jury investigation.
    • IRC 6103 and the state grand jury investigation.
    • IRC 6103 and Title 18 seizures.
    • Agent administrative information and management documents.
    • Post conviction disclosures.
    • Reporting violations of crimes outside of the jurisdiction of IRS.
    • Liaison duties.
    • Subpoenas served on CI employees and requests to testify.
    • Requests from Congressional committees, the President, or pursuant to a tax treaty.
    • Requests from other federal agencies.
    • Reports to or approval required of Congressional committees including the General Accounting Office.
    • Internal Audit, Office of Personnel Management (OPM), and disclosure.
    • IRC 6103 and foreign treaty information exchanges.
    • Protecting records from unauthorized disclosure.
    • Penalties for unauthorized disclosure.
    • Reporting unauthorized disclosures.
    • Non-disclosure laws other than IRC 6103 pertaining to CI activities.

[9.3] 1.2  (04-26-1999)
Definition of Disclosure Terms

  1. Disclosure is "the making known of returns or return information in any manner" .

[9.3] 1.2.1  (04-26-1999)
Return

  1. A "return" is any tax return or information return, schedules, and attachments, including any amendment or supplement, which is 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. Forms 1040, Schedules A, B, C, Forms W-2, and Forms 8300.
    2. A taxpayer has filed an income tax return and subsequently submits a letter to the IRS explaining an item on the original return. The letter is within the definition of return.

[9.3] 1.2.2  (04-26-1999)
Return Information

  1. The statutory definition of "return information" is very broad. It includes any information other than a taxpayer's return itself which the IRS has obtained from any source or developed through any means which relates to the potential liability of any person under the Code for any tax, penalty, interest, fine, forfeiture or other imposition or offense. It 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 Service has copies of public records maintained in its files which were secured from a county clerk's office pursuant to an investigation of a taxpayer.
  2. The distinction between "taxpayer return information" and "return information (other than taxpayer return information)" becomes an important distinction in relation to what can or cannot be disclosed and to whom. See 1.9 below.

[9.3] 1.2.2.1  (04-26-1999)
Taxpayer Return Information

  1. "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. This includes, for example, data supplied by a taxpayer's representative (e.g. , his accountant) to the IRS in connection with an audit of his return.

[9.3] 1.2.2.2  (04-26-1999)
Return Information (Other Than Taxpayer Return Information)

  1. Return information (other than taxpayer return information) relates primarily to that information gathered during the course of an investigation that did not come from the taxpayer or his representative.

[9.3] 1.2.3  (04-26-1999)
Tax Administration

  1. 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.

[9.3] 1.3  (04-26-1999)
IRC 6103 and the Administrative Investigation

  1. Special agents are authorized by IRC 6103(k)(6) (investigative disclosure) to disclose return information to the extent that such disclosure is necessary in obtaining information which may be relevant to a tax investigation, but is not otherwise reasonably available when the provisions of the 6103(k)(6) regulations are met. 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.
  2. Investigative disclosure, IRC 6103(k)(6), permits the disclosure of return information in the investigation process but does not authorize the disclosure of returns themselves. They may be disclosed during the investigation process only to the taxpayer and his or her return preparer.
  3. 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 discussions among special agents concerning investigative techniques, sources of information, etc.
  4. The following subsections will provide an overview of the investigative situations that involve investigative disclosure.

[9.3] 1.3.1  (04-26-1999)
Interviews

  1. When soliciting information from a third party other than a return preparer during a tax investigation, 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 is needed for a taxpayer's statement or records.
    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 IRC 6103(k)(6), be certain that the disclosure is consistent with the requirements of that section and the related regulation. (Treasury Regulation 301.6103(b)(6)-1).
  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 manager or the Disclosure Officer.

[9.3] 1.3.1.1  (04-26-1999)
Third Parties Accompanying the Subject of an Investigation

  1. The taxpayer's presence is not considered implied consent for disclosure when a third party accompanies the taxpayer. A written authorization from the taxpayer, consenting to or requesting such disclosure, will be required.

[9.3] 1.3.1.2  (04-26-1999)
Third Parties Accompanying Witnesses

  1. When a witness has a person other than his or her counsel present to assist him or 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  (04-26-1999)
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 agent's immediate superior. At the request of the Service or witness, which includes a principal, the IRS-CI manager may authorize the use of:
    1. A stenographer employed by the United States Attorney.
    2. A court reporter of the United States 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 Service to be qualified to take depositions for use in a United States District Court.
  2. The use of this procedure may be permissible under:
    1. IRC 6103(n)--where the Service contracts with a non-Service reporter or stenographer.
    2. IRC 6103(c)--a consent by the subject taxpayer in an investigation.
    3. IRC 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 or her expense to transcribe testimony, provided that the Service 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 Service retains the right to refuse to permit verbatim recording by a non-Service reporter or stenographer on the grounds that disclosure would "seriously impair federal tax administration" .
  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 (implied consent). If the witness objects, the interrogator will refrain from mechanically recording the statement. If the witness elects to mechanically record the conversation, the Service will make its own recording.

[9.3] 1.3.2  (04-26-1999)
Informants

  1. If a special agent finds it necessary or desirable to have an informant accompany him 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 IRC 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 or 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, in accordance with the disclosure laws and regulations. Contact the Disclosure Office for advice concerning whether such disclosure may be made under IRM 1.3.34.
  4. If federal, state or local agencies inquire as to the reliability of an individual who is an informant, the Chief, CI with the permission of the informant, may tell the other agency the extent and value of the informant's cooperation, consistent with our disclosure policies. No information protected by IRC Section 6103 may be disclosed. The special agent will advise the informant that any information submitted by him or her concerning violations not under CI's jurisdiction will be furnished to the appropriate enforcement agency in accordance with Service disclosure procedures.
  5. Whenever a Service employee learns that an IRS confidential informant, in obtaining information for the Service, has employed illegal techniques such as breaking and entry into another's premises without a search warrant, the illegal seizure of papers or other property, or the illegal overhearing of conversations, the Service employee will immediately notify the Chief, CI, who will determine the advisability of notifying the appropriate law enforcement authority using the information and criteria set forth in Sub-Sections 9.4.2.5.15, 9.4.2.5.16 and 9.4.2.5.17 (Handbook 9.4, Chapter 2, entitled Sources of Information). Notification, if deemed to be appropriate, will be in accordance with Multifunctional IRM Handbook 1.3, Disclosure of Official Information Handbook.

[9.3] 1.3.3  (04-26-1999)
Circular Letters

  1. Mail circularization is a written request to one or more third parties for information. Mail circularization to obtain third party evidence may be, under certain circumstances, the most practical means of obtaining documentary evidence in an investigation when a large number of persons, widely scattered geographically, need to be reached. If not judiciously used, mail circularization may result in unwarranted embarrassment to the taxpayer or cause unfavorable public reaction, thus subjecting the Service to criticism.

[9.3] 1.3.3.1  (04-26-1999)
Procedure for Using Circular Form Letters

  1. A special agent will not use a circular form letter without prior approval of a manager. The manger's approval must be indicated on the file copy of the letter. If the number of letters involved is ten or less, the group manager may give approval. If the number of letters involved is eleven or more, approval must be obtained from the Chief, CI.
  2. Before approving the use of a circular form letter, the manager should ensure:
    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; and
    3. the special agent has considered the requirements of IRC 6103(k)(6) and the regulations there under. That is, is the information available through other means? 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?
  3. A special agent should exercise caution not to damage the reputation of the taxpayer by making the letter either offensive or suggestive of any wrongdoing by the taxpayer.
  4. The body of the letter must not disclose the taxpayer is under investigation by the Criminal Investigation Division. Appropriate wording could be, "The Internal Revenue Service is conducting an investigation of ..."
  5. Neither the letterhead, ancillary heading , signature block, enclosures, envelope, or return envelope should contain the words "Criminal Investigation" . The heading and the return address may contain the necessary symbols for the letter to be returned to the special agent.
  6. The special agent should sign the letters. The title "Special Agent" and "Internal Revenue Service" should be included in the signature block.

[9.3] 1.3.4  (04-26-1999)
Summons

  1. Information obtained through the use of a summons is considered tax return information subject to the disclosure provisions of IRC 6103, IRC 7212A and IRC 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 involved with tax administration. This nondisclosure position does not preclude any officer or employee of the Treasury Department from disclosing material presented to obtain necessary information for investigative purpose. Any disclosure of tax information must be in accordance with the provisions of IRC 6103 as explained in this text.

[9.3] 1.3.5  (04-26-1999)
Questionable Refund Investigations

  1. IRC 6103(i)(3) permits the Service to make written disclosures of return information, (other than taxpayer return information as defined in IRC 6103(g)(3)), which may constitute evidence of a violation of federal criminal laws to the extent necessary to apprise the head of the appropriate federal agency charged with the responsibility for enforcing such laws. After a factual determination has been made by district CI that a questionable return claiming a refund is fictitious, the document is not a "return" within the meaning of IRC 6103(b)(1) but a fictitious claim and constitutes "return information" within the meaning of IRC 6103(b)(2). Therefore, the fictitious claim (for refund) and information relating to the fictitious claim may be disclosed by the Service to the appropriate federal agency head using IRC 6103(i)(3) procedures.

[9.3] 1.3.6  (04-26-1999)
High Level Drug Leaders (HLDL) Investigations

  1. During the course of an HLDL investigation, facts or information may surface concerning the commission of non-tax federal criminal offenses. This information generally may be disclosed (pursuant to IRC 6103(i)(3),only pertintent to Federal crimnal violations), but specific procedures need to be followed. See 1.9 in this Chapter for those details.

[9.3] 1.3.7  (04-26-1999)
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 IRC 6103(i)(3)only pertintent to Federal crimnal violations), but specific procedures need to be followed. See 1.9 in this Chapter for those details.

[9.3] 1.3.8  (04-26-1999)
Wagering Tax Investigations

  1. Congress has repealed IRC 6107, which allowed public inspection of certain tax records relating to wagering and has enacted IRC 4424. IRC 4424 was intended to remove any constitutional problems regarding enforcement of the wagering taxes resulting from improper disclosure of wagering tax information.
  2. The Chief, CI will meet with the United States 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 IRC 4424. The government attorney should be informed that any information gleaned from data subject to IRC 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 Multifunctional IRM Handbook 1.3.26, Disclosure of Official Information Handbook.
  3. If the United States Attorney decides to prosecute a wagering tax defendant for a substantive gambling violation after a gambling tax investigation, he or 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 IRC 4424 (See Multifunctional IRM Handbook 1.3.26, Disclosure of Official Information Handbook) which is forwarded to the United States Attorney will have the following statement on the cover sheet of each report: "THIS DOCUMENT CONTAINS WAGERING INFORMATION WHICH UNDER IRC SECTIONS 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  (04-26-1999)
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 Group Manager, 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 or her official tax administration duties.
  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.

[9.3] 1.3.10  (04-26-1999)
Disclosures to the Department of Justice for Tax Administration Purposes

  1. Approved special agent reports are referred to the DOJ under the authority of IRC 6103(h)(2) and (3). A disclosure may be made to the 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 the DOJ if such information satisfies the "item" or "transactional relationship" test provided in IRC 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. Agents contacted by a Justice attorney and asked to provide returns or return information in connection with an investigation or prosecution which was not referred by the IRS should tell the requesting attorney that the agent will seek advice from the Disclosure Office.

[9.3] 1.3.11  (04-26-1999)
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 Internal Revenue Service).
    2. The taxpayer has provided his or her representative a tax power of attorney (Form 2848, Power of Attorney, may be used for this purpose).

[9.3] 1.4  (04-26-1999)
Federal Rule of Criminal Procedure (FRCrP) Rule 6(e), IRC 6103 and the Federal Grand Jury Investigation

  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. They are Rule 6(e) of the FRCrP dealing with grand juries and IRC 6103 dealing with tax related information. This section addresses grand jury secrecy, grand jury information available for civil tax matters, IRC 6103 disclosures in the grand jury investigation and how to deal with the IRC 6103 when state and local law enforcement officers are assisting a federal grand jury.

[9.3] 1.4.1  (04-26-1999)
Grand Jury Secrecy (FRCrP Rule 6)

  1. Grand jury proceedings are kept secret to:
    1. Prevent the escape of those whose indictment may be contemplated.
    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 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 (Rule 6(d), FRCrP).
  3. Rule 6(e) of the Federal Rules of Criminal Procedure 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.
  4. Disclosure of grand jury information may be made to those government personnel deemed necessary by a government attorney to assist in the performance of his or her duty to enforce federal criminal law. With the consent of the government attorney, agents of the Service may:
    1. Examine documents and records which are before the grand jury.
    2. Inspect its minutes.
    3. Assist in the investigation of possible criminal tax violations.
  5. Federal Rule of Criminal Procedure 6(e), (referred to as Rule 6(e)) has been amended by Congress a number of times. Rule 6(e) as amended provides in pertinent part;
    • (2). General Rule of Secrecy.--A grand juror, an interpreter, a stenographer, an operator of a recording device, a typist who transcribes recorded testimony, an attorney for the government, or any person to whom disclosure is made under paragraph (3)(A)(ii) of this subdivision shall not disclose matters occurring before the grand jury, except as otherwise provided for in these rules. No obligation of secrecy may be imposed on any person except in accordance with this rule. A knowing violation of Rule 6 may be punished as a contempt of court.
    • (3). Exceptions.--(A) Disclosure otherwise prohibited by this rule of matters occurring before the grand jury, other than its deliberations and the vote of any grand juror, may be made- (i) an attorney for the government for use in the performance of such attorney's duty; and (ii) such government personnel (including personnel of a state or subdivision of a state) as are deemed necessary by an attorney for the government to assist an attorney for the government in the performance of such attorney's duty to enforce federal criminal law.
    • (B) Any person to whom matters are disclosed under subparagraph (A)(ii) of this paragraph shall not utilize that grand jury material for any purpose other than assisting the attorney for the government in the performance of such attorney's duty to enforce federal criminal law. An attorney for the government shall promptly provide the district court, before which was impaneled the grand jury whose material has been so disclosed, with the names of the persons to whom such disclosure has been made and shall certify that the attorney has advised such persons of their obligation of secrecy under this rule.
    • C) Disclosure otherwise prohibited by this rule of matters occurring before the grand jury may also be made (i) when so directed by a court preliminarily to or in connection with a judicial proceeding; (ii) when permitted by a court at the request of the defendant, upon a showing that grounds may exist for a motion to dismiss the indictment because of matters occurring before the grand jury; (iii) when the disclosure is made by an attorney for the government to another federal grand jury; or (iv) when permitted by a court at the request of an attorney for the government, upon a showing that such matters may disclose a violation of state criminal law, to an appropriate official of a state or subdivision of a state for the purpose of enforcing such law.

    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  (04-26-1999)
Witnesses Before the Grand Jury

  1. Federal rules do not impose any obligation of secrecy upon witnesses (Rule 6(e), FRCrP, Note of Advisory Committee), 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 or 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  (04-26-1999)
Defendants Before the Grand Jury

  1. After the grand jury's functions have ended, a trial court may order disclosure of its minutes to the defendant if he or she shows a "particularized need" to:
    1. Support an attack upon the indictment.
    2. Impeach a witness or refresh his recollection.
    3. Or, in a perjury prosecution, to inspect his or her own grand jury testimony.

[9.3] 1.4.1.3  (04-26-1999)
Grand Jury Investigations and Assisting Service Personnel

  1. IRS 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. Service personnel gaining access to grand jury information may not disclose this information except as authorized regarding exceptions (see 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 or 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 or her attorney's duty to enforce federal criminal law.
  3. 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 Service personnel) except as deemed necessary by the attorney for the government including attorneys in the Tax Division who have responsibility for the matters under investigation.

[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 a contempt of court.

[9.3] 1.4.2  (04-26-1999)
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 Chief should not give copies of the report to any person not 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 or her concurrence that the information is non-grand jury information and can be disclosed. The special agent will then confer with Counsel to determine whether Service policy allows the information to be given to the appropriate civil division. If Counsel concurs, the Chief, CI, will transmit the non-grand jury information to the Chief of the affected civil function by memorandum, but will not refer to the grand jury investigation nor refer to nor 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 the Service for disposition, the Service 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 Service guidelines.
    NOTE:
    Special care should be taken to document sources of information as the Service 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 exactly the same as the grand jury information, is not governed by Rule 6(e) and may be disclosed in accordance with IRC 6103. For example, information supplied to a grand jury by the Service 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 Service.

[9.3] 1.4.2.1  (04-26-1999)
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 Counsel's assistance in reviewing the information gathered for the purpose of pursuing civil action. If 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 function(s). If the court grants the Rule 6(e) order authorizing full disclosure for civil purposes, the Chief will forward a copy of the Special Agent's Report (SAR) and supporting documents to the civil function.
  2. A court order under Rule 6(e) is applied for by an "attorney for the government" . "Attorney for the government" is defined by Rule 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. This does not include District or Regional Counsel and Chief Counsel attorneys, but may include Strike Force attorneys and Criminal and Tax Division attorneys of the DOJ.

[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 the 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  (04-26-1999)
Grand Juries for Tax Administration Purposes

  1. A grand jury investigation conducted to determine if there is a violation of criminal tax law (Title 26 charges) is a grand jury for tax administration purposes. In these instances, a referral has already been made to the DOJ for IRC 6103 purposes when a grand jury request for an investigating tax grand jury was approved by the DOJ. In those situations, the Service can disclose returns and return information to DOJ on its own volition consistant with 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 Service 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 IRC 6103 purposes, is an IRS request to DOJ to 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 United States Attorney's office (USAO) for prosecution. A grand jury will review the information before determining whether to issue a true bill for indictment or it will review an information filed by the USAO to determine if an indictment should be issued. See IRC 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 return or return information can be revealed to the attorney for the government for use in the investigation, one of several procedures needs to be followed i.e. an exparte order, or a related statute call. Even then the Service can only disclose returns and return information to DOJ personnel (including U.S. Attorneys) 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. In any of these types of grand jury investigations, return 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. In this regard, any taxpayer under investigation by the grand jury is considered to be an individual who is or may be a party to the proceeding.
    NOTE:
    The Service can still disclose the information to the DOJ under IRC 6103(h)(2) and (3) as necessary in the litigation of the Service's civil tax cases. The decision to issue a Rule 6(e) order permitting the Service to use grand jury information for civil purposes is in the discretion of the court having supervision over the grand jury.

[9.3] 1.4.3.1.1  (04-26-1999)
Multi-Agency and Money Laundering Grand Jury Investigations

  1. The situation that most frequently causes confusion to a special agent arises when the agent is participation in a money laundering investigation or a multi-agency money laundering or other multi-agency 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 the Department of Justice, and for what purposes it can be used by the Department of Justice. Further, an issue arises when other agencies are participating in the investigation, 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 Tax Division of the Department of Justice, then returns and return information may be used by the Department of Justice 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. Treas. Reg. Section 301.6103(h)(2)-1(a)(2)(ii). However, if the Title 26 charges are subsequently dropped, then an exparte order under section 6103(i)(1) is required to continue using returns and taxpayer return information in the non-tax portion of the investigation.
    2. Money laundering or Bank Secrecy Act investigations are not always tax administration investigations. In money laundering and Bank Secrecy Act investigations, the special agent may access returns and return information only when there has been a "related statute call" made by the Chief, CI, or when a court has issued an order pursuant to IRC 6103(i)(1). As discussed later at IRM 1.4.3.1.1.2, the related statute call permits access by special agents to tax information for use in the money laundering investigation. That information may then be disclosed to the Department of Justice under the provisions of IRC 6103(h)(2) and (3) - but solely for use in the related statute money laundering investigations. The information may not be used or disclosed to other agencies for any purpose other than the tax-related money laundering charge. In the absence of a related statute call, a special agent may access tax information for use in a money laundering investigation only if the attorney for the government first obtains an exparte court order under section 6103 (i)(1).
    3. In a multiple agency grand jury investigation which includes money laundering charges, the attorney for the government may apply for an exparte order under section 6103(i)(1) that will permit tax information to be used by a special agent for investigation of the money laundering charges, as well as for use by the other participating agencies for investigation of the other non-tax charges. If the Chief, CI determines that the related statute test is met and makes a related statute call, disclosure to and use be a special agent and the attorney for the government of return information is permitted only for the charges under the related statute money laundering charges. Such disclosures must comply with IRC 6103(h)(2) and (3). The other agencies may access the tax information for the charges other than money laundering only if an exparte court order is obtained under IRC 6103(i)(1).
  2. There are advantages and disadvantages to special agents obtaining access to tax information in money laundering cases by an appropriate related statute call versus obtaining access pursuant to exparte court order. The related statute determination does not require action by a court - only the Chief, CI, need be involved. On the other hand, any information gathered or collected by the Service after the related statute call is made is return information protected by section 6103. This is the case whether or not the Service 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 which of the information obtained is covered by section 6103 and which is not.
  3. Moreover, in multiple-agency situations, an exparte court order will be required in any event in order to disclose tax information from the Service to the other agencies participating in the investigation. Therefore, in multi-agency investigations involving money laundering but not Title 26 charges, if tax information is sought, consideration should be given to obtaining tax information for both the money laundering and other non-tax charges via a court order pursuant to IRC 6103(i), thus obviating the need for a related statute determination. An exparte court order, however, can only be used to obtain information for non-tax administrative purposes.
  4. Indications of money laundering violations will be identified from either tax information protected by the disclosure provision of IRC 6103, including returns and return information as defined in IRC 6103(b)(1) and (2), or from sources not protected by IRC 6103. Form 8300 is a return protected by IRC 6103. A Title 31 report is generally not protected by IRC 6103 unless it is used in a tax or tax-related investigation or placed in a tax investigatory file, then it will be return information protected by IRC 6103.

[9.3] 1.4.3.1.1.1  (04-26-1999)
Ex Parte Order

  1. See the Multifunctional IRM Handbook 1.3, Disclosure of Official Information Handbook for the details concerning this type of order.
  2. If the return or return information is obtained pursuant to an exparte order requested by an attorney for the government, only the information received as a result of that ex parte order is protected by IRC 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 administration purposes i.e. not in a Title 26 case.

[9.3] 1.4.3.1.1.2  (04-26-1999)
Related Statute Test

  1. Returns and return information may be used or disclosed to initiate or conduct a money laundering investigation if the investigation is considered for tax administration purposes according to IRC 6103(b)(4). When investigation potential money laundering or Bank Secrecy Act (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 Chief, CI. This determination is also known as the "related statute call" . The Chief, CI, will make such determination in memorandum form with his or her signature for placement in the administrative investigative file. See Exhibit 9.3.1-2 for an example of a related statute request submitted by the special agent and the Chief's corresponding concurrence. Returns and return information cannot be used to evaluate information related to a money laundering 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. If this related statute call is made by the Chief, CI, then all the information received, collected and developed by the Service in that investigation is protected from disclosure under IRC 6103 regardless of whether a formal tax case is opened, and regardless of the ultimate determination with respect to any potential Title 26 charges.
  5. Once the related statute call has been made, IRC 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 call has been made, and the matter has been referred to the Department of Justice, returns and return information can be disclosed to Department of Justice employees who are personally and directly engaged in the tax administration matter. IRC 6103 (h)(2) allows for Department of Justice 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 Assistant U.S. Attorney or to the prosecuting attorney and other Justice Department personnel personally and directly engaged in the proceeding, but only for purposes of the related statute money laundering or BSA investigation when a related statute call has been made. It does not allow disclosure to all other Department of Justice employees by the investigating agents for purposes of investigating other non-tax charges. As discussed above, an exparte order under IRC 6103(i) must be obtained to use tax information for those non-tax charges (e.g. bank fraud, securities fraud). The Assistant U.S. Attorney or prosecuting attorney may further disclose returns or return information to officers and employees of the Department of Justice 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 grand jury request without Title 26 charges may be directly referred by the Chief, CI, to the local U.S. Attorney in instances where the related statute call has been made but where tax charges are not pursued. However, a subsequent expansion request for a tax grand jury must be routed through Regional Counsel.
  8. 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 grand jury request for violation of 18 USC 1956(a)(1)(A)(ii) may not use the direct referral procedure noted in paragraph (6) above.
  9. It is not necessary to establish a Title 26 violation or a numbered Title 26 investigation to meet the related statute test. Large amounts of currency being deposited and concealed from the IRS provides indications that income has been earned that has not been, or may not be, reported on an income tax return.

[9.3] 1.4.3.1.1.3  (04-26-1999)
Bank Secrecy Act (BSA) Report Information

  1. Treasury dissemination guidelines, promulgated under the authority of 31 CFR 103.43, permit IRS to disclose Bank Secrecy Act (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 federal or state investigations (including state or local prosecutors or law enforcement agencies) and to U.S. Attorneys, for use in conjunction with joint investigations or prosecutions. Suspicious Activity Reports (SARs), however, can only be disseminated in criminal matters and therefore can not be shared with Examination Division, Collection Division, or other civil enforcement divisions or agencies. Forms 8300 can be used as a tax return in Title 26 investigations; however, disclosure in non-tax investigations is limited to approved agencies by written request to the Chief, CI under the "safeguard provisions" of IRC 6103(l)(15).
  2. Disclosures must contain a warning statement on the use and further dissemination of the information. In addition, the Service must maintain a log of all such disclosure requests. Logs and warning statements are required upon dissemination. Currently, under Delegation Order 143 (as revised), the authority to release BSA report information is delegated to the Chiefs, CI.
  3. For Title 31 information on financial institutions not within the jurisdiction of the Service where the related statute test has been met, but where prosecution potential is lacking, the Chief, CI, should forward a summary of the facts on Form 5104 to the Assistant Commissioner, CI, who will advise the Director, Office of Financial Enforcement (U.S. Treasury). If tax information is disclosed, it should be noted in the summary.

[9.3] 1.4.3.2  (04-26-1999)
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 investigations are those investigations not involving tax or tax-related violations. The Title 31 reports and other information collected by the Service during the investigation are not protected by IRC 6103. In rare and unusual circumstances, certain information received during a Title 26 investigation may not be protected by IRC 6103, and thus may be used to initiate or conduct a pure money laundering investigation. For example, information from a witness in a Title 26 investigation alleging money laundering violations committed by individuals unrelated to the tax investigation may not be protected. The district Disclosure Officer should be consulted, if necessary.
  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 IRC 6103(i)(1), or the request provisions of IRC 6103(i)(2).

[9.3] 1.4.4  (04-26-1999)
Disclosure And The State And Local Law Enforcement Assisting The Federal Grand Jury

  1. Tax information obtained under specific provisions of IRC 6103 for use in a tax or a non-tax federal grand jury investigation generally may be disclosed by the Assistant U.S. Attorney or the prosecuting attorney to federal officers and employees personally and directly engaged in the investigation. However, IRC 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 under the Intergovernmental Personnel Act (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 U.S. Attorneys, Special Deputy U.S. Marshals, and other persons formally appointed as federal employees under the Intergovernmental Personnel Act. Special Deputy U.S. Marshals are deputized by the U.S. Marshals Service.
  4. State and local personnel deputized under Title 21, United States Code, Section 878 (21 USC 878) by the DEA or the U.S. 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 use and disclosure of tax information in the IRC and, therefore, subject to the penalties for unauthorized disclosures.
  6. When state and local personnel are formally appointed, they will be advised in writing of the disclosure restrictions and penalties for unauthorized disclosures. Exhibit 9.3.1-3 reflects the required content of such written notice.

[9.3] 1.5  (04-26-1999)
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, District Counsel should be consulted for legal advice prior to Service acceptance of such information.

[9.3] 1.6  (04-26-1999)
Federal Rule of Criminal Procedure (FRCrP), Rule 6(e), IRC 6103 and Title 18 Seizures

  1. IRC 6103(i)(4) permits tax information obtained under IRC 6103(i)(1) and (2) to be used in a non-tax federal prosecution. In addition, section 6103(i)(4) permits the information to be used for 18 USC. 981 or 982 civil or criminal forfeitures related to the non-tax violations of 18 USC. 1956 or 1957, or 31 USC. 5313(a) or 5324(a). In addition, if a related statute determination has been made, section 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 related 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 Test-If the matter is related to an investigation related to tax administration.
  3. Information gathered in a criminal grand jury investigation cannot be used in a Title 18 civil seizure or forfeiture without obtaining a Rule 6(e) Order.

[9.3] 1.7  (04-26-1999)
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 IRC 6103(b) and subject to the disclosure provisions. See the Multifunctional IRM Handbook 1.3, Disclosure of Official Information Handbook.

[9.3] 1.8  (04-26-1999)
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 consistently happens upon conviction. See Chapter 2 of this Handbook which goes into publicity and disclosure in detail. That Chapter will go into investigative publicity as well as requirements and criteria, including clearance procedures for speeches and proposed articles.

[9.3] 1.8.1  (04-26-1999)
U.S. Probation Officer

  1. IRC 6103(h)(4) allows disclosure of returns and return information to a U.S. Probation Officer for the purposes of informing the court of any compliance or noncompliance 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 U.S. Probation Officer must be charged with the responsibility of determining whether such taxpayer is complying with the terms of his or 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.
    4. The disclosure of the returns and return information would not identify a confidential informant or seriously impair a civil or criminal tax investigation.
    5. Any disclosure to a U.S. Probation Officer will be coordinated with the district Disclosure Officer.
  2. The special agent's report may be disclosed to a probation officer in instances where a taxpayer has pleaded guilty or nolo contendere or has been found guilty of federal tax law violations for the purpose of preparing the report contemplated by Rule 32(c) of the Federal Rules of Criminal Procedure. Inspection of the special agent's report by the Probation Officer, to the extent material and relevant, should be made at a convenient location, such as the U.S. Attorney's office. Proper care should be exercised to provide adequate security of the report and the information contained therein, to prevent unauthorized disclosure.
  3. Occasionally, U.S. Probation Officers will request tax information from the Service as part of a pre-sentence investigation in a non-tax criminal matter. Disclosures may be made to Probation Officers in these circumstances only as provided in IRC 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 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 Chief, CI, 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. IRC 6103(h)(4) permits the disclosure of information contained in Taxpayer Delinquent Account files to U.S. 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.

[9.3] 1.9  (04-26-1999)
Reporting Violations of Crimes Outside of the Jurisdiction of IRS

  1. 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 IRC 6103(i)(3)(A) by officials authorized under Delegation Order 156 (as revised). CI personnel do not have 6103(i)(3)(A) disclosure authority.
  2. All disclosures under IRC 6103(i)(3) and disclosures of non-tax 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 Chief, CI, 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. If a determination not to forward the information is made, the Chief, CI, should immediately advise the District Director of the reasons for that determination. The Chief, CI, 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 causing the decision not to disclose are still valid.

[9.3] 1.9.1  (04-26-1999)
Procedures For Reporting Information Concerning Possible Violations of Federal, State, and Local Criminal Laws

  1. Often in the conduct of tax investigations, special agents discover evidence of federal 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 1.9 above.
    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  (04-26-1999)
Type of Information

  1. What can be revealed depends if the information is taxpayer return information, return information (other than taxpayer return information) or non-tax information.

[9.3] 1.9.1.1.1  (04-26-1999)
Taxpayer Return Information And The Non-Tax Violation

  1. IRC 6103(i) requires the IRS to make the distinction between taxpayer 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. This includes, for example, data supplied by a taxpayer's representative (e.g., his or her accountant) to the IRS in connection with an audit of his or her return.

[9.3] 1.9.1.1.2  (04-26-1999)
Return Information (Other Than Taxpayer Return Information) and the Non-Tax Violation

  1. IRC 6103(i)(3) 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 the responsibility for enforcing such statutes. Information which merely indicates that a violation may have occurred is sufficient to warrant referral pursuant to IRC 6103 (i)(3). 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 for example:
    1. Local police seize the books and records of a taxpayer during a raid. The police subsequently turn over the books and records to the Service. 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 the 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 the IRM Multifunctional Handbook 1.3, Disclosure of Official Information Handbook.
  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 or she should prepare a memorandum to the Chief, CI, whether or not a court order is obtained. 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. U.S. Code sections believed 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. , U.S. 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 Chief, CI, will furnish such information to the Disclosure Officer for appropriate dissemination in accordance with the Disclosure of Official Information Handbook.
  6. In instances where the information was obtained during the course of a wagering (IRC Chapter 35) investigation, see the Disclosure of Official Information Handbook; for disclosure procedures, some information may not be disclosed in accordance with IRC 4424.
  7. If the information concerns alleged impersonations of a federal officer, see 1.9.2.6 of this Chapter. If the information indicates forgery of a United States government check is involved in an investigation within the jurisdiction of CI, see 1.9.2.4 of this Chapter.
  8. In the event that a disclosure would seriously impair a criminal or civil tax investigation or identify a confidential informant, the Chief, CI, will forward his or 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 your Disclosure Officer.

[9.3] 1.9.1.1.3  (04-26-1999)
Non-tax Crime Information (Witnessed or Received Orally or in Writing) Not Related to Tax Violations

  1. RESERVED

[9.3] 1.9.1.2  (04-26-1999)
IRS Providing the Information or Another Agency's Request

  1. This sub-section describes what can be revealed if the information is offered by the IRS or requested by another agency.

[9.3] 1.9.1.2.1  (04-26-1999)
Offered by the IRS

  1. The Service may disclose in writing return information (other than taxpayer return information) which may constitute evidence of a violation of federal criminal laws to the extent necessary to apprise the head of the appropriate federal agency charged with the responsibility for enforcing such laws. (See 1.9.1.1.2).
  2. The IRS will furnish information involving substantive narcotics violations either directly to the DEA, the FBI, or to the Assistant Attorney General, Criminal Division, DOJ, in accordance with the disclosure laws and regulations. (The Attorney General assigned jurisdiction to the FBI to investigate federal drug offenses effective January 21, 1982.)

[9.3] 1.9.1.2.2  (04-26-1999)
Requested by Another Federal Agency

  1. IRC 6103(i) also permits disclosure of return information (other than taxpayer return information) upon the written request of the head of a federal agency. See the IRM Multifunctional Handbook 1.3, Disclosure of Official Information Handbook.
  2. Pursuant to IRC 6103(i)(1), designated officials of the DOJ may obtain for the DEA or the FBI any information that the IRS has collected or obtained (for federal non-tax criminal purposes) by making application to a federal District Court for an ex parte court order.
  3. Under IRC 6103(i)(2), designated officials of the DOJ may obtain for federal non-tax criminal purposes, upon written request, tax information for the DEA or the FBI which the IRS did not obtain from a taxpayer or from someone acting on behalf of such taxpayer.

[9.3] 1.9.1.3  (04-26-1999)
Source of Information

  1. Other considerations may prohibit the disclosure of tax information for non-tax criminal administration purposes. This includes:
    1. Information which would identify a confidential informant or seriously impair a civil or criminal tax investigation.
    2. Information obtained under a tax treaty.
    3. Wagering tax information protected under 26 USC. 4424 (see IRC 6103(o)(2).
    4. Information obtained from, or on behalf of, a grand jury proceeding, unless a valid order permitting the use of the information has been issued under Rule 6(e) of the Federal Rules of Criminal Procedure (see 1.4 above).
    5. Other information that cannot be disclosed by 18 USC. 1905.

Internal Revenue Manual  

Hndbk. 9.3 Chap. 1 Disclosure

  (04-26-1999)


05/02/2001 14:29:41 EST