Contents

• [109.1] 9.1 Overview

• [109.1] 9.2 Witness Fees and Travel Expenses

• [109.1] 9.3 Payments for Costs in Complying with Summons
  • [109.1] 9.3.1 Definitions
  • [109.1] 9.3.2 Delegation of Authority
  • [109.1] 9.3.3 Basis for Payment
  • [109.1] 9.3.4 Payment Procedures

[109.1] 9.1  (04-30-1999)
Overview

1. IRC 7610 provides for the payment of witness fees and mileage to summoned witnesses and the payment of search, reproduction and transportation costs to certain third-party witnesses. Third parties complying with a summons will be paid under the terms and conditions set forth below.
2. Search, reproduction, and transportation cost payments are in addition to and not a substitute for a summoned witnesses' right to witness fees and travel expenses.
3. This chapter contains the following sections:
   • Witness Fees and Travel Expenses
   • Payments for Costs in Complying with Summons

[109.1] 9.2  (04-30-1999)
Witness Fees and Travel Expenses

1. Witness fees and travel expenses are payable upon request to witnesses who are required to appear to give testimony or produce records before Service personnel in compliance with administrative summonses issued under IRC 7602, 6420(e)(2), 6421(g)(2), or 6427(j)(2). Amounts for fees are prescribed in 28 USC 1821. This includes a per diem rate and a rate per mile for associated travel. The procedures and conditions for payment of witness fees and mileage are not modified by requirements for reimbursement of third parties for search, transportation and reproduction costs as provided for in this chapter at section 9.3. Witness fees and payments for mileage may be made to all summoned witnesses, whether a third-party witness, the taxpayer, or the taxpayer's representative. Payment may be made whenever a summons (Form 2039) is issued, regardless of the investigative state of the matter involved.
2. Procedures for payment of witness fees and expenses are detailed below. Use Standard Forms 1156 (Public Voucher for Fees and Mileage of Witnesses) (Original), 1156a (Memorandum copy of SF 1156), and 1157 (Claim for Fees and Mileage of Witnesses) (Original) for this purpose.
   1. The witness should prepare SF 1157, with the assistance of the Service employee, if necessary, and signed by the payee. In the Investigation No. space in the upper right corner, the notation "Form 2039" should be inserted.
   2. The Service employee before whom the summoned party appears should review the claim and complete the lower portion of the form to indicate approval for payment.
   3. The Service employee should also complete the upper portion of SF 1156 and 1156a, including the Summary of Payments section. On the line provided for showing the name of court or board, enter Testimony before...name and title of agent...
   4. Forward all of the above forms through channels to the appropriate Regional Fiscal Management Branch, Accounting Section, for processing and payment. A check will be issued to the claimant by the Regional Disbursing Office.
   5. When the person summoned demands assurance or guarantee that payment will be made, prepare an additional copy of SF 1157 and give the copy to the person. Insert the following statement: Payment of witness fees and travel expenses as stated above are guaranteed by the Internal Revenue Service immediately above the space for approval.
3. If the person summoned cannot comply unless travel expenses are provided, then make an advance payment, not to exceed the amount allowable. Use the following procedures:
   1. Prepare SF 1157 in the name of the witness, complete the upper portion of SF 1156 and 1156a, and enter the date scheduled for testimony on the line provided. Mark all formsAdvance Payment and forward through channels to the appropriate Regional Fiscal Management Branch, Accounting Section, for processing and payment.
   2. After processing, the Fiscal Management Branch will forward the check to the claimant by certified mail, noted For Delivery to the Addressee Only. The certified mail return receipt will be associated with SF 1157 and retained in the Fiscal Management Branch.
   3. When the advance payment covers only a part of the allowable fees and travel expenses, the SF 1157 submitted for the remainder of the allowance will bear a reference of the SF 1157 covering the advance payment.

[109.1] 9.3  (04-30-1999)
Payments for Costs in Complying with Summons

1. IRC 7610 provides for payments to third parties who request reimbursement for costs incurred in complying with a summons. Payments may be made to third parties without the issuance of a summons for records needed in an investigation which are available to the general public, under IRC 7801.
2. The procedures and rates of payment contained herein take their authority from:
   1. 26 USC 7610, as enacted by Public Law 94-455, October 4, 1976 (Tax Reform Act of 1976).
   2. 26 USC 7801 with regard to public records where no summons is issued.
   3. Treasury Department Order No. 150-10, dated April 22, 1982; and
   4. IRS Delegation Order No. 178 (as revised).

[109.1] 9.3.1  (04-30-1999)
Definitions

1. Taxpayer The person with respect to whose liability the summons is issued.
2. Third Party Any person served with a summons other than:
   1. a taxpayer; or
   2. an officer, employee, agent, accountant, or attorney of a taxpayer who, at the time the summons is served, is acting as such.
3. Third Party Records Books, papers, records, or other data in which the taxpayer does not have a proprietary interest at the time the summons is served.
4. Directly Incurred Costs Costs incurred solely, immediately and necessarily as a consequence of searching for, reproducing or transporting records in order to comply with a summons. Proportionate allocation of fixed costs (overhead, equipment depreciation, etc.) is not considered to be directly incurred. However, where a third party's records are stored at an independent storage facility that charges the third party a fee to search for, reproduce, or transport particular records requested, such fees are considered to be directly incurred by the summoned third party.
5. Search Costs include only:
   1. the total amount of personnel direct time incurred in locating and retrieving records or information; and
   2. direct costs of extracting information stored by computer. Salaries of persons locating and retrieving summoned material are not includible in search costs. (Persons are paid a set amount for direct time regardless of their salary or wage.) Also, search costs do not include salaries, fees, or similar expenditures for analysis of material or for managerial or legal advice, expertise or search, nor does it include time spent for such activities.
6. Reproduction Costs Costs incurred in making copies or duplicates of summoned documents, transcripts, and other similar material.

[109.1] 9.3.2  (04-30-1999)
Delegation of Authority

1. The Commissioner of Internal Revenue has delegated to the Regional Commissioners, and to such persons as the Regional Commissioners deem appropriate, the authority to obligate appropriated funds for making payment for search costs, reproduction costs and transportation costs in connection with complying with a third-party summons. See Delegation Order 178 (as revised). Because of this delegation, this matter is governed by Regional or District delegations of authority.
2. Make an estimate of the obligational authority level required for payment of the cost of compliance with the summons, and initiate the necessary administrative action to obtain the required level of approval authority under Regional or District Delegation Orders.

[109.1] 9.3.3  (04-30-1999)
Basis for Payment

1. Payment for search, reproduction and transportation costs will be made only to third parties served with a summons to produce third party records or information and only for material requested by the summons, unless the records are available to the general public.
2. Make payment only for search, reproduction and transportation costs that are both directly incurred and reasonably necessary. To determine whether costs are reasonably necessary, it is essential to consider search, reproduction, and transportation costs separately.
3. Do not make any payment until the third party satisfactorily complies with the summons.
4. Do not make any payment unless the third party submits an itemized bill or invoice showing specific details concerning the search, reproduction and transportation costs.

[109.1] 9.3.4  (04-30-1999)
Payment Procedures

1. First make as reasonable an estimate as possible of the obligational authority level required for payment of the costs of compliance with the summons. Then initiate the necessary administrative action to have that official approve the estimated costs of compliance prior to issuance of the summons.
2. Consider the need for the information sought in relationship to the anticipated payable costs of compliance.
3. Ensure that Form 2039-B, Notice to Third Party Recipient of IRS Summons, accompanies the summons.
4. Upon full or satisfactory compliance with a summons, notify the third party that an itemized bill or invoice may be submitted for payment and provide your office address for that purpose. If the witness prefers, use Form 6863 (Invoice and Authorization for Payment of Administrative Summons Expenses) to request payment.
5. A third party invoice resulting from compliance with a summons which is $25 or less ($100 or less for revenue officers) may be paid in cash by the issuing employee. This threshold does not include amounts which are claimed separately as witness fees and mileage. Claim reimbursement on your travel voucher (with the third party invoice attached) under Miscellaneous Expenses, or submit the receipted bill to the Small Purchases Imprest Fund Cashier for cash reimbursement. Under either procedure, charge the expense to SOC 2509, Administrative Summons Expense.
6. Certify and forward claims for more than $25, or $25 or lesser amounts when direct payment procedures are not used, to the appropriate Fiscal Management office for payment.
   1. Ensure that the bill for payment itemizes the specific details of search, reproduction and transportation costs and that charges are at rates which Form 2039-B, Notice to Third Party Recipient of IRS Summons, Part B of the five part snapset assembly of Form 2039, Summons authorizes. Forward the bill through line managers to the official who initially approved the obligation or the official with obligation authority appropriate to the amount of the bill.
   2. The obligating official, usually the Group Manager, will evaluate the charges in terms of accuracy and reasonableness and certify the bill for payment processing by signing the following statement: "Payment is approved and is within my delegated obligational authority," along with his or her title and organizational identification.
   3. Forward the certified bill through appropriate channels to the regional Fiscal Management office for payment processing.
7. Special procedures apply when the summonses are inter-regional or inter-district.
   1. Where one district requests a summons to be served by another district, the official of the initiating district with authority will obligate funds for the payment of that summons. The requesting district will forward a completed Summons except for the time and place for appearance and the agent before whom the witness is to appear. The transmittal letter accompanying the summons should indicate the level of obligation authority.
   2. If the anticipated costs exceed the obligational amount, the official of the receiving district will advise the requesting district of the need for the approval of an official with higher obligational authority.
   3. When the Service employee of the district serving the summons and the issuing official of the requesting district determines that the summons has been complied with, the summoned materials will be submitted to the requesting district.
   4. The third party will then submit its bill. If the bill exceeds the obligational authority of the approving official, the official of the initiating district must obtain subsequent approval at the required level.
   5. The issuing official will review, certify it for payment, and then forward it to Fiscal Management for payment processing.