Handbook 9.5
The Investigative Process
Chapter 8
Investigative Reports
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Contents
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This chapter relates to special agent investigative reports. This chapter
will provide guidance necessary to write a clear and concise investigative
report. The following will be discussed in this chapter:
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Purpose and Importance of Reports
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Planning and Writing Reports
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Types of Final Reports
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Notification Letter to Principal in Prosecution Investigations
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Sample Reports, Tax Fraud Investigations
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Reports on Wagering Tax and Coin-Operating Gaming Device and Seizure
Investigations
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Miscellaneous Criminal Law Violations
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Reports on Discontinued Investigation
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Supplemental Reports
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Closing Investigations by Survey
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Collateral Reports
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Claim for Reward Report
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The results of all completed investigations together with conclusions and
recommendations are expressed in written reports. The purpose of a report
is to present all pertinent facts relating to a matter in order to support
appropriate action to be taken.
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To have value, a report must be written so that the reader comprehends the
full significance of its contents, is convinced of its thoroughness, and
is willing to take action based on the facts presented.
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It is an official document and may not be furnished to any person outside
the Service without proper authorization. In a criminal investigation, a
report ultimately serves as the basis for the preparation and presentation
of the investigation for trial.
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It is not an easy matter to write a report which will clearly convey the
essential facts disclosed as the result of an investigation. Report writing
is an art which requires study, practice, and persistent effort. Since there
are no hard and fast rules uniformly applicable to reports, agents must use
their experience and common sense to develop the facts necessary to support
complete reports. The essentials of a good report are fairness, accuracy,
completeness, uniformity, conciseness, and logical presentation.
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Reporting the facts with fairness is as important as procuring them with
impartiality. A special agent should always be an unbiased fact-finder and
not a partisan to a particular cause or action. All material facts and evidence
should speak for themselves and require little or no explanation of their
significance. Any distortion of the significance of the evidence materially
diminishes the value of the report.
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The subject's explanations should be presented fairly. When a special agent
quotes, he or she should quote exactly. Hearsay and rumors, properly identified
as such, may be included in the report, but only if relevant and material
to the matter being discussed.
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Reports should reflect an impersonal attitude and should contain no offensive
remarks regarding the subject.
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Reports are the basis for administrative and legal actions of the utmost
importance, including the assessment of substantial amounts of tax and penalties
and criminal action which may result in imprisonment. Accuracy is essential,
therefore, facts must be reported with exactness.
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The writer should present facts in such a manner that he or she will not
have to state opinions and conclusions except in the portion of the report
provided for that purpose.
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The distinction between fact and opinion should be clearly shown when it
is necessary to explain the theory of investigations based largely on
circumstantial evidence. Avoid using statements such as: The taxpayer
could give no plausible explanation. That is a conclusion, and others may
find that the explanation is plausible. State what the taxpayer said and
let the evidence show whether the statement is worthy of belief.
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Avoid the phrase conclusively proved. Do not allow conclusions to surpass
the evidence. A conservative statement that is consistent with the facts
is stronger than an exaggeration. Exaggerations tend to raise doubt against
all the evidence presented in the report.
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Inaccuracies, carelessness in detail, errors in computation, and incorrect
dates materially affect the value of a report. Discrimination in the choice
of words, punctuation which clarifies the meaning, and a correct application
of the rules of grammar are essential to accurate reports. Errors in these
essentials have an unfavorable effect on the mind of the reader.
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Avoid using slang and technical terms, including those used in accounting.
However, in some instances, slang terms may be necessary for clarity in reporting
the results of investigations, particularly those involving taxpayers in
illegal pursuits. In such instances, the meaning of the term should be explained
when it is first used in the report. For example, it may be advantageous
in a report concerning a numbers lottery to describe the nature of operation,
including the slang terms used therein, before presenting evidence of the
violation. If numerous slang or technical terms are necessary, it may be
advisable to prepare a glossary.
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A special agent should present the material in a report from the viewpoint
of a reader having no knowledge of the investigation. The agent must exercise
good judgment in selecting the facts that are material to the matter and
take care that nothing essential to a complete understanding of the investigation
will be omitted. All statements of material facts bearing on the proof of
alleged violation should be supported by the evidence necessary to establish
its truth and accuracy. The source of the evidence should also be reported.
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Likewise, explanations from the subject and important facts developed by
the investigation that point to weaknesses in the investigation should not
be omitted. Subsequent disclosure of facts indicating weaknesses that were
known to the report writer reflects unfavorably on him or her. Moreover,
any weaknesses in a investigation should be made known before action is taken
relative to criminal prosecution or settlement of the civil liability in
order to prevent surprise in the course of conferences or legal actions and
to give reviewers an opportunity to suggest means of overcoming the weak
points.
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However, speculation and conjecture of agents concerning possible defense
theories have no place in a factual report. The reader is primarily interested
in knowing what happened and how the events can be proved. The difficulties
met by the special agent in securing the information, or in the ingenuity
used in making the investigation, are of no interest.
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The writer should always remember that the report is about a violation or
other obscured situation and not about the investigation. However, where
certain pertinent evidence was not obtained, the special agent should state
the avenues of inquiry pursued in attempting to procure the evidence in order
that no doubts may arise in the reader's mind regarding whether the investigation
was thorough.
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Important matters in exhibits generally should be narrated briefly in the
report unless the exhibits are adequately described in an appendix and do
not require any further explanation. The use of an appendix is discussed
in text 8.3.5 of this chapter.
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Finally, in order to ensure completeness, the report should be read and revised
as often as necessary before it is submitted for review. A special agent
should strive to submit a report in final form for initial review. The agent
should not rely upon reviewers to complete the report by resolving the
difficulties encountered in the investigation.
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Reports should be as uniform as possible for each type of investigation
investigated by Criminal Investigation (CI). A special agent in one district
should report the results of an investigation in the same sequence as a special
agent in another district who has conducted an investigation of the same
type. In order to promote uniformity, text 8.4 of this chapter contains
suggestions and sample reports for guides in report writing.
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Conciseness suggests the removal of all that is elaborate or not essential.
If a report contains a mass of irrelevant data, the important matters will
not be clear to the reader.
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When you have something to say, say it in as few words as you can. The rule
of conciseness applies to individual sentence construction as well as to
the whole report. Repetition and unnecessarily lengthy descriptions of documents
should be avoided. It is not necessary to copy into the report entire statements,
letters, and exhibits when concise reference to the principal points and
brief explanation will suffice.
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Tabulations and schedules in the form of appendices to the report frequently
may be used to reduce narrative and emphasize important facts relative to
matters such as summaries of net worth or omitted sales and analyses of bank
accounts.
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A special agent should not indulge in attempts to use wit or sarcasm; neither
should he or she refer to himself or herself as the undersigned, the writer,
or your agent. Do not hesitate to state the taxpayer informed me that, or
the taxpayer gave me (documents or books), if that information is material.
However, in view of the necessity for maintaining an impersonal attitude,
the personal pronouns I and we should be used sparingly.
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Avoid superfluous statements such as: The following report is submitted,
or as the result of investigation, I have to report as follows. The phrase,
This investigation relates to an investigation of an alleged evasion of income
tax by John Jones may be better stated as, This report relates to the alleged
evasion of income tax by John Jones. The statement attached hereto as Exhibit
6 is a sworn affidavit of John Jones wherein he testified. . .contains
unnecessary words. Merely say, John Jones stated that. . .(Exhibit 6, affidavit).
Avoid trite and superlative phrases, and use the word very only on rare
occasions.
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Use of the active voice promotes conciseness and accuracy in writing. It
is also more forceful. For example, the statement, Information obtained from
Mr. Witness disclosed that the proceeds of the sale were given by him to
the taxpayer on May 14, 19 , may be reduced in length and made
more forceful by revision to, Mr. Witness said that he gave the proceeds
of the sale to the taxpayer on May 14, 19 . Use of the active
voice also will eliminate the possibility that the report writer will omit
stating who gave the proceeds to the taxpayer.
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A report otherwise well written may lose its effectiveness for want of logical
arrangement. A mass of data thrown promiscuously into the report is an imposition
on the reader and an adverse reflection upon the writer. Effective presentation
is largely dependent upon adherence to the principles of style, namely unity,
conference, and emphasis.
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The principal of unity requires adherence to the single main idea or proposition
and exclusion of all matter that does not tend to prove that idea or proposition.
Each sentence, paragraph, and division should help to establish the main
point of the report.
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Coherence is defined as sticking together. This principle counsels logical
sequence of thought. No one is likely to achieve coherence by chance or
inspiration. It demands careful planning, critical review, and frequent revision
by the report writer. Words, phrases, and clauses should be so placed in
a sentence that their relationship is clear and the meaning of the sentence
is obvious.
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Sentences should be so arranged so that the progress of thought is clear
and continuous from beginning to end. Each paragraph must bear an unmistakable
relation to the whole composition, especially to the paragraph immediately
preceding it.
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The most common fault in the presentation of evidence is the failure to show
precisely what part it plays in the whole argument. This failure is sometimes
due to the fact that secondary matters are not properly subordinate to the
principal facts. Much evidence has only a casual connection with the main
proposition, but the connection must be made evident. If the bearing of the
evidence is not felt at the point where it is presented, it usually is not
felt at all. Each violation, event, or circumstance, and all facts in support
thereof should be narrated in full before passing on to the next feature
of the report.
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Phrases and sentences which merely introduce an exhibit may interrupt the
reader's train of thought. In many instances, that difficulty may be avoided
by parenthetical insertion of exhibit numbers during discussion of the contents
of the exhibit. Insofar as possible, references to other sections of the
report should be avoided because the arrangement of the report will show
the relationship between the various facts and events.
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Emphasis requires careful placement of words, phrases, and sentences for
he purpose of calling attention to the important facts. If the writer does
not emphasize the more significant information, the reader will not retain
the essential facts.
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Important words or phrases should be placed in important positions, usually
at the beginning of a clause or sentence, or at the end. The same rule applies
to the arrangement of sentences within a paragraph. A new topic or idea should
be the subject of a new paragraph. A sentence or short passage requiring
special emphasis may be paragraphed separately. Important matters can be
emphasized by using concrete terms and terse sentences, by numbering and
indenting a series of important and related facts, and by using schedules
and tabulations. The last mentioned technique is particularly valuable in
showing comparisons.
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Before a special agent starts to write a report, he or she should have in
mind a definite outline of the arrangement in which the facts and evidence
may be presented in the most effective manner. The best arrangement rarely
is the order in which the facts were developed during the investigation.
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A good general plan is to state the problem, present the results of the
investigation, and set forth the conclusions and recommendations.
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Details under the various headings should be arranged in paragraphs, each
confined to a particular topic. Special agents may use the method of assembling
the facts and evidence into a coherent and logical presentation which he
or she finds most effective. Keep in mind the witness who will produce, identify,
and/or testify about each item of evidence. The use of either an outline
or an arrangement based on appendices and exhibits is suggested to assists
in assembling material for the report.
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In using the above method, prepare an outline of the topics or events considered
essential to prove the violation, or, with respect to reports not relating
to violations, to accomplish the purpose of the report. List under each topic
the pertinent facts and evidence. New agents may find it helpful to list
the evidence in detail. The amount of detail can be reduced with the acquisition
of experience and facility in writing reports. When the outline is finished,
study it and make any revisions necessary to ensure compliance with the
principles of completeness, conciseness, unity, coherence, and emphasis.
Since each topic ordinarily will be the subject of a paragraph, the special
agent can direct his or her attention to the writing of each paragraph on
the basis of the topical outline.
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In lieu of an outline, effective presentation can be accomplished by arranging
appendices, exhibits, and work papers in logical order based on the
above-mentioned principles of good writing and discussing each fact and event
in that order. Consideration also should be given to the order desirable
for presentation of the evidence in court.
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One of the first steps in getting ready to write a report regarding a fraud
investigation is to prepare the summaries of income, tax, penalties, and
adjustments.
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In investigations based on specific items, the criminal items should be
segregated from the civil items. The civil items are technical adjustments
based upon:
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Mere clerical errors.
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Mistaken ideas relative to some regulation or requirement of the Internal
Revenue Service.
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Adverse decisions on controversial questions.
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Erroneous legal or accounting advice on which the taxpayer honestly relied.
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Items which the taxpayer is unable to substantiate.
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The civil items could also include unreported income and other adjustments
which pertain to a year or years for which prosecution is not being recommended.
When appropriate, technical adjustments should be grouped into summary topics.
With respect to criminal investigations, the special agent should determine
before beginning the report which criminal items are to be proposed for use
in the criminal proceedings and whether there are any technical adjustments
favoring the taxpayer that should be offset against additional income.
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During all stages of an investigation, from planning the investigation through
conducting a final review of the report, the special agent should be familiar
with the expectations of the Group Manager and other reviewers of the report.
The special agent may refer to the Compliance and Customer Service Manager
Handbook number 114.1, Chapter 6, Section 6. Awareness of these guidelines
should assist the special agent in submitting a report that receives greater
success in the review process.
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As a general rule, a separate report shall be written for each investigation.
However, if the facts and events concerning two or more related taxpayers
or investigation classifications are the same or are intermingled, the results
of the related investigations shall be set forth in the report regarding
the principal violator or classification. For example, when an investigation
discloses evidence of tax evasion by a corporation and its principal officers,
the report on the president of the corporation may serve as the focal point
for assembling and presenting the facts and evidence regarding all taxpayers
involved, including thecorporation.
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Similarly, violations of the excise and occupational taxes on wagering, involving
one taxpayer or several closely related taxpayers, should be discussed in
one report. Regional guidelines will be followed in all investigations in
which there is any uncertainty as to the need for separate reports.
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When consolidating two or more defendants in one report, consideration should
be given to ensuring that a sound basis for a joint trial exists. The absence
of evidence of a conspiracy to violate tax laws, lack of a common violation
to be charged, problems of venue, or other factors may indicate that the
defendants are entitled to separate trials. If so, separate reports should
be written with duplication of exhibits where appropriate.
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Reports shall be addressed as follows:
District Director, Internal Revenue Service,
Attention: Chief, CI,
Name of District (city and state).
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The address of the originating office will be shown on the first page of
each report.
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Grand jury reports should be addressed to the appropriate United States
Attorney's office (see IRM Handbook 9.5 Chapter 2).
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The subject of the report consists of the name, the current address, and
the taxpayer identification number of the principal person or legal entity
in whose name the investigation concerned. The address will consist of the
street address, city, and state where an individual resides or a corporation
has its principal office. If the facts and evidence concerning related
investigations are included in one report, the subjects of the related
investigations, properly identified as such, shall be shown below the subject
of the principal investigation. Related investigations not discussed in the
report will be mentioned in the introduction but will not be included in
the subject heading. Text 8.3.4.3 of this chapter and the sample reports
contain suggested forms for presenting the subject of a report. The name
and current address (including street address, city, state, and zip code)
of the taxpayer's representative should be listed below the subject.
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In order to provide uniformity, the investigation number should be typed
a single space below the subject on the first page of all reports and
intra-Service communications. The investigation number also should be typed
in the upper left corner of each succeeding page of a report. When a report
covers more than one person or classification, only the number relating to
the principal violator will appear on the succeeding pages.
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A designation indicating the nature of the report should be placed on the
initial page immediately under the investigation number. Reports should bear
a designation of Final for those closing an investigation, and Supplemental
for those submitted after the investigation is closed. The designations Parole,
Jeopardy Assessment, Inadequate Records, Arrest, Claim for Reward, and Special
Investigation should be used where appropriate. Correspondence relating to
collateral inquiries should bear the designation Collateral Request or Collateral
Reply below the investigation number.
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Assume that an investigation disclosed evidence of tax evasion by a corporation
and two of its officers, and that the evidence is to be presented in the
report relative to the president, who is the principal violator. The subject
should be shown as follows:
In re: I.M.BIG SSN: 000-00-0000
010 Blank Street
Chicago, Illinois 60647
36730321B
Final
Related Investigations:
JOHN R. MINUTE SSN: 000-00-0000
4321 South Quincy Street
Chicago, Illinois 60635
36730296E
BIG CORPORATION, INC. EIN: 00-0000000
4354 North State Street
Chicago, Illinois 60632
36730325B
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Assume that an investigation disclosed evidence of tax evasion by three
individuals who reside and conduct business as a partnership in Boston,
Massachusetts, and that John Doe, the partner who is responsible for maintenance
of the records, is the principal violator. The subject of the report should
be shown as follows:
In re: JOHN DOE SSN: 000-00-0000
4533 High Street
Boston, Massachusetts 02135
04730322C
Final
Related Investigations:
JAMES ROE SSN: 000-00-0000
8346 Main Street
Boston, Massachusetts 02164
04730324D
JOSEPH MOE SSN: 000-00-0000
2538 Elm Street
Boston, Massachusetts 02134
04730326F
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The name and address of the taxpayer's representative should be shown as
follows:
Representative:
C.W. LAW, Attorney
100 Ewe Street
Chicago, Illinois 60651
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Approvals should be reflected as signature blocks on the last page of the
report.
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A report should be assembled in the following manner, although it is recognized
that all reports will not include each of the listed parts:
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Table of Contents.
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Body of Report.
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List of Witnesses and Exhibits.
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Appendices.
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Exhibits.
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The page number shall be in the center at the bottom of each page.
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The names of the targets of the investigation will be typed in capital letters
when and wherever used in reports of investigations as well as in correspondence
between CI offices relating to investigations.
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In investigations involving a detailed computation of net worth, bank deposits,
or expenditures, or numerous fraudulent items, clarity in reporting may best
be accomplished by presenting the details in appendices and including in
the body of the report only brief summaries thereof, together with a general
discussion of the related evidence.
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Narrative in the report may be reduced by including on the appendix, in addition
to the pertinent figures, a brief description of each item, a reference to
exhibits containing the documents supporting each item, and the name of any
witness who will produce documents and testify regarding each item.
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It is not necessary to discuss in the body of the report each item on the
appendix. However, the report shall contain a description of the appendix;
a brief summary or restatement of totals, if such is applicable; and an
explanation of any significant particulars or details that are not made evident
by inspection of the appendix.
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Since appendices are essential to a complete understanding of any investigation
wherein they are used, they shall be typed or reproduced in sufficient quantities
for inclusion with each copy of the report. With respect to investigations
involving the tabulation of numerous items which can be assembled into groups,
a clear and concise presentation may require placing on the basic appendix
only the total amount for each group and tabulating the items comprising
the group on supporting appendices or schedules. For example, in a net worth
investigation embracing numerous bank accounts and holdings of stocks and
real estate, the computation of net worth on the basic appendix should show
the aggregate cost or other value of the bank accounts, the stocks, and the
real estate, and the various items included in each total should be set forth
on separate appendices or schedules.
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The appendices should be attached as part of the report and should be listed
in the table of contents. Form 4526-B (6-position tab dividers) may be used
to identify appendices.
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Samples of appendices are provided in Exhibits 9.5.8-2 through 9.5.8-4.
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Exhibits are an essential part of a report. They may consist of originals
or copies of statements and documents, such as:
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Affidavits
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Transcripts of interviews
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Contemporaneous memorandums
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Canceled checks
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Invoices
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Bank records
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Books of account
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Transcripts or analyses of accounts and records and related workpapers
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It generally is not feasible to provide extra copies of exhibits consisting
of checks, invoices, bank records, account books, long detailed transcripts,
and similar documents. However, the copy of the report which is retained
at the office having responsibility for the conduct of the investigation
should include a copy of each exhibit if such is available. Original documents
not easily retrievable, such as affidavits, memoranda of interview, and
workpapers, should be maintained in the investigation agent's files with
a copy of the report. Only copies of these documents should be forwarded
for review to prevent the loss of these records in transit.
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The body of the report should contain reference to the exhibits and appendices,
and the appendices should contain reference to exhibits which consist of
supporting documents. Such reference may be to individual exhibits or groups
of related exhibits. For example, the report may state; Appendix A is a summary
of the unreported receipts from sales, and Exhibits 8 through 25 are copies
of documents in support thereof, including canceled checks, invoices and
affidavits.
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Important matters in exhibits generally should be explained in the report.
However, in many instances, documents, such as invoices, checks, and bills
of lading require only a brief description. If a document of that nature
is adequately described on an appendix, no further explanation may be necessary.
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When mentioning or referring to a document that is submitted as an exhibit,
including the written statement of a witness, insert the exhibit number in
parentheses immediately following the reference. In most instances, it is
unnecessary to state that the document is submitted as Exhibit 1. The page,
paragraph and line numbers should be included when citing multi-page exhibits.
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An exhibit is underlined (the exhibit number only, not the description) the
first time it is mentioned in the report so the reader will know when he
or she sees an exhibit number whether it is being discussed for the first
time or has previously been referred to.
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It is suggested in text 8.3.2 of this chapter that the special agent, before
beginning a report, arrange the proposed appendices and exhibits in the order
of planned presentation of facts and evidence, and that he or she prepare
the report by discussing the appendices and exhibits in that order. In many
instances, the agent will find it necessary to rearrange those documents
for a more effective presentation.
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When the report is completed, the exhibits should be assembled in the order
in which they are originally mentioned in the report, and they should be
numbered for easy reference. If a number of documents, such as canceled checks,
are included in one exhibit, give each document a sub-exhibit number. For
example, if Exhibit 11 consists of 16 canceled checks, the checks should
be numbered from 11-1 to 11-16, or the page should be numbered if multiple
checks are exhibited on a page.
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Each exhibit should be properly authenticated. The exhibits may be assembled
in binders, put in folders, or any other method which is practical so long
as the exhibit is identified so it can be associated with the pertinent folder
should it be removed. Index tabs may be used to facilitate reference.
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The report should include a list of exhibits containing the number and a
description of each exhibit. The content and arrangement of a list of exhibits
is illustrated in the sample report on a specific item investigation (Exhibit
9.5.8-2). It is suggested that a copy of the list of exhibits be mounted
immediately under the cover sheet for the exhibit file itself. This will
eliminate having to use the special agent's report as the index.
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Where the statement of a witness or subject is lengthy, it may be helpful
to prepare a synopsis of the important answers and attach this as a cover
sheet to the exhibit. The summary should be quite brief, desirably not more
than one line for each point and should be referenced to the appropriate
question or page and line numbers.
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The list of witnesses is an essential part of a report on a criminal
investigation. It is especially important to the United States Attorney and
to any agent who assists in the preparation of the investigation for trial,
particularly in instances where the special agent who conducted the investigation
and wrote the report is not available. The list of witnesses frequently is
used by the United States Attorney as the basis for issuing subpoenas.
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The witnesses should be listed in the order in which they are mentioned in
the report. The name, address, telephone number, and title or other
identification of each witness should be set forth, together with a reference
to any exhibit or appendix that is pertinent to his or her testimony and
to the records and other evidence he or she may be expected to produce or
identify. The use of such references will eliminate the need for a summary
of each witness's probable testimony as part of the list of witnesses.
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In some instances it may be necessary to list one witness who will produce
and identify certain records and another who will testify relative thereto.
Listing the name of a person who can be expected to appear as a witness is
preferable to showing only the name of a corporation, bank, or other
organization, especially where an individual has custody of records or has
an intimate knowledge of the records and transactions involved.
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The special agent may prepare the list of witnesses as the report is written.
The use of appendices containing names of witnesses and the procedure of
capitalizing names of witnesses, as explained in 8.3.4.6 of this chapter,
will assist in the preparation of a complete list of witnesses. When the
report has been written, the special agent should review the facts and evidence
to determine whether a witness has been listed for each item of evidence.
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A table of contents showing subject matter and page numbers should be submitted
with any report exceeding ten pages. It should be designed to provide quick
reference to important features of the investigation, and the amount of detail
will be determined by the length of the report and the circumstances of the
investigation. Any appendices to the report should be listed and described
in the table of contents.
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This text in this chapter relates to reports on investigations relating to
fraud and miscellaneous criminal law violations. The following suggestions
and samples are provided, not as inflexible rules which must be followed
in all reports, but as guides to assist special agents in writing reports.
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Whenever a prosecution recommendation is contemplated, the special agent
should discuss findings and proposed recommendations with the immediate
supervisor prior to preparing the final report. The agent should obtain the
supervisor's opinion as to the sufficiency of the investigation conducted.
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In writing the report, the special agent is responsible for using clear and
correct language, for its mathematical accuracy, for proper descriptions
of each exhibit and for presenting all material facts in an impartial manner.
An experienced special agent is expected to attain report writing proficiency
which will permit him or her to submit prosecution reports in final typed
form to the supervisor for review and processing.
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In non-prosecution investigations, the special agent is expected to submit
the report in final typed form.
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The report is a witness-oriented report, for example: Witnesses are
numbered chronologically as they are introduced W1, W2, W3, and so forth.
Each exhibit pertaining to a given witness is likewise numbered chronologically.
For example, the exhibits relating to witness number 3 would be designated
as W3-1, W3-2, and W3-3.
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No disassembly or reassembly of witness-exhibits is required for pretrial
or trial use. The pertinent facts and circumstances of the investigation
should be thoroughly discussed in the narrative and fully documented with
appropriate witness-exhibit references.
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The exhibit reference number should be underlined and explained the first
time it is mentioned in the report in order to facilitate review and pre-trial
use of the report. Subsequent references to the exhibit should not be underlined
or explained. For example: The results of the civil examination (W4-2,
Revenue Agent's Report) are as follows. . . . The civil adjustments (W4-2)
are reconciled to the criminal adjustments in Appendix A.
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The report has a standard format, but additional sub-headings may be used
to add clarity to the report and facilitate review. (See Exhibit 9.5.8-2).
Additional sub-headings should be used liberally to highlight any significant
issues.
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The report makes maximum use of appendices which may eliminate the need for
a detailed explanation of each of the supporting exhibits and minor details
of the investigation. When appendices are used, each should contain complete
references to all relevant testimony and documentary evidence.
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The report contains details of the revenue agent's recommendations and a
reconciliation of the civil and criminal adjustments. A copy of the Revenue
Agent's Report should be included as an exhibit to the Special Agent's Report.
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[9.5]
8.4.2 (03-19-1999)
Standard Outline for Final Reports Recommending Prosecution for Violation
of Tax Laws
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The following are headings for the major sections normally included in
prosecution reports:
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Introduction.
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History of Taxpayer.
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Evidence of Income.
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Evidence of Intent.
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Explanation and Defense of Taxpayer.
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Evidence Relating to Sentencing Guidelines.
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Conclusions and Recommendations.
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The Introduction section should contain the principal's social security number
or employer's identification number. Both numbers should be added where
applicable. In addition, this section should make maximum use of the following
subheadings and brief statements of fact:
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Name and address of the Taxpayer
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Name and address of Representative
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Type of Report
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Type of Investigations and Prosecution Years
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Recommended Charges
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Investigating Agents
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Related Investigations
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Method of Proof
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Method of Violation
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Returns Filed and Statutes of Limitation
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Venue
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Source of Investigation
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Initial Contact with Taxpayer and Date of Referral
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Constitutional Advice
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Power of Attorney
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Revenue Agent's Recommendations
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Reconciliation of Civil and Criminal Adjustments
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Civil Actions
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The narrative relating to Returns Filed and Statutes of Limitation should
include filing information (with pertinent exhibits) of periods subsequent
to those for which prosecution was recommended.
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The narrative relating to Venue should include not only where venue may lie
but also what evidence supports the conclusions. Evidence of venue should
be fully documented as set forth in IRM Handbook 9.6 Chapter 4.
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The narrative relating to Initial Contact With Taxpayer and Date of Referral
should state not only who contacted the principal but also, when, where,
how, and why. If the investigation was referred to CI from either Examination,
Collection, or the Service Center, the referral date should be included.
If the investigation was not referred from within IRS, this section should
be entitled Initial Contact with Taxpayer.
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The narrative relating to Constitutional Advice should state when, where,
and by whom the advice was given; who was present; and statements made by
the principal as to his or her understanding of his or her rights. (See text
in IRM 9.4 Chapter 5.)
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The narrative relating to the revenue agent's recommendations should schedule
the corrected taxable income and tax for use in civil proceedings. A copy
of the Revenue Agent's Report should be included as a witness-exhibit reference.
Samples of the scheduling of corrected taxable income and tax are set forth
in Exhibits 9.5.8-1 and 9.5.8-2.
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If applicable, any differences between the criminal and civil adjustments
should be reconciled and explained either in this section, an exhibit or
an appendix. A suggested format for reconciling the return to the civil and
criminal adjustments is set forth in Appendix A-2, Exhibit 9.5.8-2 Cont.
(20).
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All significant civil actions instituted either by or against the taxpayer
should be fully explained. This applies whether the actions are for prior
years, prosecution years, subsequent years, or relative to a different type
of tax.
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In the History of the Taxpayer section, the special agent should present
information relative to any of the following matters that are pertinent to
the investigation, with particular emphasis on the criminal period. This
section should make maximum use of the following subheadings, and any others
deemed appropriate, and brief statements of fact should be made as opposed
to extensive narratives:
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Full Name
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Aliases, Business Names
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Date and Place of Birth
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Physical and Mental Health
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Marital Status and Spouse's Name
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Dependents
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Place of Residence During Years Involved
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Education
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Military Service
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Reputation in the Community
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Criminal Actions (a copy of the criminal record should be submitted as an
exhibit with the report)
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Business Address During Years Involved
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Business History
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Knowledge of Tax Matters
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Sources of Income
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Other Pertinent Data
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Subheadings normally included in the Evidence of Income Section include all
or some of the following. Others can be added as needed.
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Theory of the Investigation
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Books and Records
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Preparation and filing of returns
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Reconciliation of books and records to tax returns; reported income and reported
expenses
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Explanations of appendix items
-
Evidence for use in criminal proceedings
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Additional deductions
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Corrected taxable income and tax
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The Theory of the Investigation section is designed primarily to present
an overview or brief synopsis of the investigation, e.g., what the taxpayer
did, and how we are going to prove it. This section should avoid conclusions
and adhere to a capsule presentation of the facts and evidence developed
during the investigation. Cites are normally not included in this section,
but the synopsis must be based upon facts proven elsewhere in the report.
It should be stated in this section whether the principal is a cash or
accrual-basis taxpayer and the basis used to determine the unreported income
for use in criminal proceedings. This section should also set forth the method(s)
of proof used. If an indirect method of proving income is used, an explanation
should be given as to why this method was selected.
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The Books and Records section should contain a brief description of the
principal's records as opposed to a mere listing of the records. This section
is not intended to be an exhaustive analysis of the recordkeeping system
but should relate enough information to familiarize the reader with the records
and how they are used to record the principal's income and expenses. The
recordkeeping responsibilities and detailed office procedures should be explained
under the Explanation of Appendix Items section. The Books and Records section
should include information as to when, how, and from whom the records were
obtained and their disposition, that is, whether or not the records were
copied, compared, certified, and returned to the principal.
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The Preparation and Filing of Returns section should contain all details
surrounding the preparation and filing of the principal's returns. Particular
emphasis should be placed upon who was responsible for each facet of the
preparation, signing, and filing of the return. Introduce the statement of
the person who prepared the alleged fraudulent returns. Whenever possible,
submit as an exhibit a copy of that person's affidavit or a transcript of
his or her testimony under oath. The information which should be obtained
from this witness is set forth in Exhibit 9.4.5-1 in Handbook 9.4, Chapter
5. Include any pertinent statements by the taxpayer.
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The Reconciliation of the Books and Records to Tax Returns section should
summarize the major income and expense categories as well as deductions and
show the agreement with amounts reported on the tax return. If applicable,
those items which are not in agreement should be explained. This section
should make reference to either the summary schedule exhibit or appendix
which shows the detailed reconciliation. If a reconciliation is not possible
or necessary, a statement to that effect should be included in this section.
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The Explanation of Appendix Items section is one of the more significant
sections of the report. The evidence in support of the violation should be
set forth in full detail in this section. Although extensive narration of
each appendix item and exhibit is not necessary with a well planned appendix,
sufficient detail must be presented to fully explain the facts and circumstances
of the investigation. Subheadings may be used liberally to clarify this section.
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The first part of this section should set out a schedule of the specific
categories and items of unreported income or a summary of the net worth,
bank deposit, or expenditure schedules, whichever is applicable. This section
should explain each appendix:
-
What it is.
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How the data on the appendix is derived.
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What analyses were made.
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What evidence is used.
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What the appendix shows.
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Only those individual appendix items which are not self-explanatory need
be explained.
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If appendices are not used in presenting the investigations, the heading
Explanation of Appendix Items may be replaced with the heading Evidence for
Use in Criminal Proceedings.
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The Additional Deductions section should summarize and explain any additional
deductions or adjustments determined during the investigation. This heading
should be deleted if there are no additional deductions or adjustments.
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The final subsection under the Evidence of Income Section often is Corrected
Taxable Income and Tax. This section sets forth the computation of corrected
taxable income and tax for use in criminal proceedings. If the investigation
is presented by an indirect method of proof, this section need only show
the corrected tax computation if taxable income is shown on the appendices.
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Special agents should follow the instructions in text 8.4.2.3.8.1 and 8.4.2.3.8.2
of this chapter when computing self-employment tax and computations in
failure-to-file and false returns investigations.
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Where original fraudulent returns reflect figures for self-employment tax,
it is the policy of the Office of Chief Counsel to include the corrected
self-employment tax figures in the criminal computations.
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In multiple year investigations where one or more, but not all, of the fraudulent
returns reflect self-employment tax computations, corrected self-employment
tax figures should be computed for all years unless the evidence otherwise
indicates that self-employment tax is not applicable to a particular year
or years.
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Where none of the fraudulent returns reflect a self-employment tax figure,
or where no returns were filed, the criminal computations will include a
calculation of self-employment tax only when prior year returns reflect
self-employment tax figures or other evidence exists to establish beyond
a reasonable doubt that the taxpayer was self-employed during the subject
years.
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[9.5]
8.4.2.3.8.2 (03-19-1999)
Computations in Failure-to-File and False Returns Investigations
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In prosecutions under I.R.C. 7203 and 7206(1), while computations showing
taxable income and tax are not elements of the crime and may not be required
at trial, the computation of harm to the revenue greatly impacts upon the
element of willfulness and, as such, the Tax Division, Department of Justice,
has requested that tax computations be supplied in all such investigations.
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In referring such investigations, there should be proof that the Government
has been adversely affected by the taxpayer's actions and should show additional
taxable income and tax due as one method of accomplishing this.
-
If it can be shown, however, that it would be impossible or impracticable
to make a tax computation, and, if without such computation the facts are
flagrant, tending to support a reasonable inference of substantial harm to
the Government, i.e., revenue, computations of additional tax may be omitted
after a full explanation.
-
In any event, a schedule of unreported gross income (I.R.C. 7203) or reported
and corrected false return items (I.R.C. 7206(1), must be included in the
special agent's report.
-
In prosecutions under I.R.C. 7203, the spouse's gross income is always excluded
from gross income, except in community property states.
-
Alternative computations should be prepared for each spouse if both spouses
are referred.
-
The alternative computations should reflect the tax due, computed using both
the married filing joint and the married filing separate tax rates.
-
The recommended spouse will be allowed an exemption for the nonrecommended
spouse providing that the nonrecommended spouse's income would not have
independently triggered the filing requirements.
-
The tax rates for a married person filing separately will be used whenever
it is apparent from the evidence that the nonrecommended spouse independently
either filed or should have filed. An information computation should also
be supplied wherein joint rates are allowed since the taxpayers have the
option of electing joint rates until commencement of the trial.
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Gross income figures are used by the U.S. Attorneys in complaints, informations
and indictments filed against taxpayers in willful failure to file income
tax investigations. Therefore, if the special agent's report involves the
alleged willful failure to file income tax return(s), the gross income (adjusted
gross income or adjusted taxable income in net worth method of proof) in
each prosecution year should be shown. In those investigations where gross
income must be proven, gross income means all income from whatever source
derived, including (but not limited to) the following items:
-
Compensation for services, including fees, commissions, fringe benefits and
similar items.
-
Gross income derived from business (use gross profit).
-
Gains derived from dealings in property.
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Interest.
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Rents (use gross rents).
-
Royalties.
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Dividends.
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Alimony and separate maintenance payments.
-
Annuities.
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Income from life insurance and endowment contracts.
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Pensions.
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Income from discharge or indebtedness.
-
Distributive share of partnership gross income, (separately calculate the
distributive share of partnership business profit and distributive share
of partnership gross rents, etc).
-
Income with respect to a decedent.
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Income from an interest in an estate or trust.
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This important section of the report should contain brief, concise statements
of the evidence of intent presented in the preceding sections of the report,
together with a discussion of any additional evidence of intent. Generally,
if an item is presented in the Evidence of Intent section, it should be fully
developed in prior sections of the report.
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This section of the report will contain an outline or succinct summary of
the evidence of intent presented in preceding sections of the report, together
with a discussion of any additional evidence of intent.
-
In this part of the report, the special agent shall set forth explanations
of the taxpayer, facts regarding his or her attitude toward the investigation,
facts indicating his or her defense, and rebuttal evidence. If any of those
matters have been discussed in detail in a previous part of the report, this
section should contain only a brief summary of, or reference to, the preceding
discussion.
-
Admissions of the taxpayer relative to the receipt of income or to intent
in the matter should be presented with the other facts concerning those topics,
even though such admissions were made in connection with his or her explanation.
-
The taxpayer's explanation and facts developed during the investigation may
indicate a probable defense. Since this section of the report shall include
only facts and evidence, any conclusions regarding the taxpayer's explanation
and defense will be reserved for the section provided for that purpose. The
special agent should not engage in speculation or conjecture about possible
defenses in the report.
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If a District Criminal Investigation Conference (See text in IRM Handbook
9.5 Chapter 121) was held at the completion of the investigation to discuss
with the taxpayer the criminal features of the investigation, set forth the
results thereof and submit as an exhibit a transcript or memorandum of the
proceedings. Admissions made by the taxpayer during the conference should
be included with the evidence of the receipt of income or the facts relating
to intent, as appropriate. In that event, it may be advisable to introduce
the exhibits pertaining to the conference at the point where that occurrence
is first mentioned.
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Introduce any available evidence to controvert the probable defenses, including
a discussion of the efforts made to verify the assertions of the taxpayer.
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Present the facts relating to the extent the taxpayer and his or her
representatives were cooperative or uncooperative during theinvestigation.
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This section of the report contains evidence which may help determine the
taxpayer's eventual sentence and should include the following introductory
language:
The evidence in this section is presented as the basis for the special agent's
determination of the proposed offense level for sentencing purposes. The
offense level calculation based on this evidence is not intended as a final
computation and should not be interpreted as such. The offense level is based
on evidence known at this time and is subject to change should additional
evidence be discovered, circumstances vary, or the evidence be interpreted
differently.
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At the discretion of the Chief, Criminal Investigation Division, this section
may be omitted from the Special Agent's Report (SAR). However, if this section
is omitted from the SAR, the evidence relating to sentencing and the sentencing
computation shall be set forth in the transmittal memorandum which accompanies
the SAR.
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The United States Sentencing Commission's Guidelines Manual (USSC-GM) must
be consulted in writing this section. Appropriate sections of the USSC-GM
should be referenced to the sections of the Special Agents Report (SAR) (see
exhibits 9.5.8-2, 8-3, and 9.5.8-4).
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In using the USSC-GM, the total section relating to an offense level or
adjustments must be read. The Commentary associated with each section is
extremely important and provides guidance and instructions for the interpretation
of the guidelines.
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In presenting the evidence that supports the base level offense, specific
offense characteristics, or any of the adjustments to the offense level,
all of the taxpayer's relevant conduct must be considered. This means that
all acts and omissions that were part of the same course of conduct or common
scheme or plan as the offense of conviction are relevant to determining the
taxpayers sentence. The government needs only a preponderance of the evidence
to sustain the relevant conduct. Examples of this principle are described
in the notes below.
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NOTE:
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The taxpayer is indicted on three counts of tax evasion and is convicted
on one count. In addition to the three years that the taxpayer was indicted,
the Examination Division conducted audits of two more years and understatements
caused by fraud were determined and presented in a Revenue Agent's Report
(RAR). For sentencing purposes, the tax loss is computed using all of the
years for which a preponderance of the evidence shows that the understatements
or tax due is attributed to fraud. In this example, the total tax loss
computation would include the three years that CI worked and the two years
Examination worked.
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NOTE:
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During the course of an Examination Division audit which eventually leads
to a referral to CI and the taxpayers ultimate conviction, the taxpayer lies
to the revenue agent in an attempt to keep the government from uncovering
the tax fraud. This conduct could be considered relevant in the application
of the obstruction adjustment.
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The offense level associated with a statute is comprised of a base offense
level and adjustments attributed to specific offense characteristics. The
base offense level and specific offense characteristics should be dealt with
individually for each statute for which prosecution was recommended. Both
the base level and specific offense characteristics relating to a statute
can be located in Chapter Two of the USSC-GM by consulting Appendix A Statutory
Index of the USSC-GM.
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The Base Offense Level section of the report should show how the base offense
level was computed. All methods by which the base offense level could be
computed should be shown. Exhibit 8-10 is the Tax Loss Table to be used when
determining the base offense level. If some of the information needed for
the computation is not available (i.e., interest due on criminal deficiency
at date of indictment), compute only the methods where the information is
available.
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The Specific Offense Characteristics section of the report should contain
the evidence which supports why a specific offense characteristic adjustment
should be made to the Base Offense Level. If more than one specific offense
characteristic is applicable, each should be dealt with separately and the
evidence in support of each shown. Since the determination of whether a special
offense characteristic should apply is sometimes very subjective, all evidence
that could reasonably be expected to support the application of a special
offense characteristic should be included.
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Adjustments
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The Victim-Related Adjustments section of the report should contain the evidence
which supports any of the victim-related adjustments. It should be noted
that the government itself cannot be a victim for purposes of this section.
(USSC-GM, Chapter 3 Part A)
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The Role in the Offense section of the report should contain the evidence
which shows whether the taxpayer had an aggravating role in the offense,
a mitigating role in the offense, or abused a position of trust or used a
special skill in the commission of the offense. (USSC-GM, Chapter 3 Part
B)
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The Obstruction section of the report should contain the evidence which supports
whether the taxpayer willfully obstructed or impeded the investigation. Here
again, this determination can be very subjective and all the evidence that
can reasonably be expected to determine the application of this adjustment
should be included. This issue must be reconsidered after a trial if the
taxpayer is convicted to determine if the taxpayer obstructed or impeded
the prosecution. (USSC-GM, Chapter 3 Part C)
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Acceptance of Responsibility: If the defendant has clearly demonstrated
a recognition and affirmative acceptance of personal responsibility for the
offenses for which prosecution has been recommended, the evidence indicating
such should be contained in this section. Conversely, if the taxpayer has
demonstrated that he or she is not accepting responsibility for his or her
actions, the evidence in support of this position should be shown. (USSC-GM,
Chapter 3 Part E)
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In this section the special agent should identify the features of the
investigation on which the recommendation for criminal prosecution is based
and shall present an appraisal of the related facts and circumstances of
the investigation. The special agent shall comment on the flagrancy of the
violation and any evidence of a hostile attitude on the part of the taxpayer.
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The special agent shall make specific recommendations concerning the institution
of criminal proceedings, including the particular penal sections of law and
tax period involved in each recommendation.
-
Special recommendations should be made relative to the assertion of any
appropriate civil sanctions within the jurisdiction of the CI, including
the particular sections of law and the tax period involved in the
recommendation.
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A separate witness file should be established for each witness developed
during the investigation. The witness file should include the applicable
testimony. Documents relating to each witness file can then be reviewed for
relevancy and each item therein arranged in a logical sequence.
-
In assembling the witness files, each witness file and each evidentiary item
contained in each witness file will be numbered.
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The documents in the files should be secured within each file and all files
then attached together in a manageable package with fasteners or by other
methods.
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[9.5] 8.5 (03-19-1999)
Notification Letter to Principal in Prosecution Investigations
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When the special agent has made a determination, concurred in by the Chief,
CI, and the District Director, that the facts in the investigation warrant
a prosecution recommendation against the taxpayer, a letter shall ordinarily
be sent (via certified mail, return receipt requested) to the principal notifying
him or her that prosecution is being recommended and that the investigation
is being referred to District Counsel (include office address and telephone
number.)
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A similar letter will also be prepared in those situations described in text
in IRM Handbook 9.5 Chapter 12 after the district Criminal Investigation
conference is held and the Chief, CI, makes a determination to forward the
investigation to District Counsel. (See 26 CFR 601.107(c).)
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A copy of the letter shall be mailed to the principal's enrolled representative
(agent or attorney) if a power of attorney or tax information authorization
has been filed in the investigation.
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The above procedures do not apply to Grand Jury investigations.
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The sample reports illustrate the format of reports and methods of presenting
and arranging facts, evidence, and conclusions. Although in practice the
organization of material in each report will depend upon the particular facts
and circumstances of the investigation, the samples can be used as guidelines
for effective presentation.
-
The sample reports concern hypothetical situations and are not designed to
provide either qualitative or quantitative standards for evaluating the
sufficiency of evidence.
-
Since lists of exhibits and witnesses usually are similar in format, samples
thereof are included with only the first sample report. Likewise, samples
of only one appendix are provided in investigations involving two or more
appendices that would be similar in content and
arrangement.
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To illustrate a technique that may be used to facilitate reference to the
probable testimony of witnesses and to assist in the preparation of the list
of witnesses, the surname of the taxpayer and of each prospective witness
is typed in capital letters in the sections of the sample reports relating
to evidence, explanation of the taxpayer, and intent. Likewise, pertinent
business names appear in capital letters.
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One sample report also follows the practice of underscoring exhibits when
initially introduced.
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Exhibit 9.5.8-2 is a sample report on a specific item investigation in which
prosecution is recommended.
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The body of the report contains a summary of the total unreported receipts
from each customer with references to several appendices, each showing a
tabulation of the unreported payments from one customer, descriptions of
the supporting evidence, references to pertinent exhibits, and the name of
the witness who will produce the documents and testify relative thereto.
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A sample of one such appendix is provided. In the body of the report, discussion
of items appearing on the appendices is confined to evidence that is not
adequately described on an appendix and matters that require elaboration.
-
The sample report contains a summary showing the disposition of proceeds
from unreported sales, followed by a discussion of the exhibits relative
thereto. Such detailed discussion of the exhibits relating to the disposition
of funds is not necessary in all investigations. For example, in instances
where such exhibits are adequately described by their title, further discussion
may be unnecessary.
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Exhibit 9.5.8-2 contains sample appendices showing methods of presenting
the evidence of unreported sales in a prosecution investigation based on
specific items.
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Appendix A provides a concise summary of the facts and evidence relating
to the receipt of income which, if used as a basis for preparation of the
narrative report, will assist the special agent in making a concise and coherent
presentation. If the evidence is adequately described on the appendix, it
is unnecessary to repeat that information in the body of the report. However,
if the brief description in the appendix does not clearly explain the facts
and evidence, the matter should be discussed in the body of the report. A
copy of each appendix will be submitted with each copy of the report.
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The information to be included on an appendix and the arrangement thereof
will vary according to the facts of the particular investigation. In many
investigations, it is not necessary or desirable to include information relating
to the reported income, and in instances where few columns are required,
it may feasible to combine the schedules regarding the receipt of income
and the disposition of funds.
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Exhibit 9.5.8-3 is a sample report on a net worth investigation involving
a recommendation of prosecution with respect to three of the five years included
in the investigation.
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It is assumed in the sample that the investigation resulted from the receipt
of an informant's communication and that the investigation disclosed fraudulent
returns filed for the years involved.
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The body of the report contains a summary of the computation of net worth
and expenditures and the details are set forth on appendices.
-
The summary which appears in the body of the report should contain a tabulation
of the major classifications of assets and liabilities that show changes
sufficient to have a material effect on income. The remaining amounts should
be grouped under the classifications of other assets or other liabilities.
-
In the summary of the income computation in Exhibit 9.5.8-3, the corrected
net income is determined by adding nondeductible expenditures to the increases
in net worth. A separate item should be inserted in the summary whenever
it is necessary to make adjustments for nontaxable income or unallowable
deductions, such as gifts, the nontaxable portion of capital gains, or disallowed
losses.
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Because of the number of columns involved, the detailed computations of net
worth are presented on two separate appendices: one (Appendix A) relating
to the period from the starting point to the first year included in the criminal
investigation, and the other (Appendix B) concerning the years involved in
the recommendation for prosecution.
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Appendix B contains references to pertinent exhibits for each item. Appendix
A contains similar information for each item not continued on Appendix B,
but in instances where an item appears on both appendices, the former shows,
in lieu of a description of the evidence, a reference to the number of the
item on Appendix B.
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In instances where one document constitutes evidence relative to a number
of net worth items, repetition may be avoided by placing a notation, see
Note 1 in the column headed Description of Evidence and describing the document
in a footnote.
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If any classification of assets or liabilities is comprised of numerous items,
the basic appendix usually should show only the total amount for the particular
classification with reference to a subsidiary appendix containing the detailed
tabulation of such items. For example, in an investigation involving numerous
bank accounts, the basic appendix will show the aggregate amount on deposit
in all the accounts at the end of each period, and the balances in the individual
accounts will be tabulated on supporting appendices.
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Exhibit 9.5.8-4 is a sample report on a bank deposit investigation, in which
it is assumed that the taxpayer operated a retail drug store and that the
bulk of receipts from sales are in the form of cash. It also is assumed that
business expenses were paid by checks and that the canceled checks were available
during the investigation.
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The computation of income on the basis of bank deposits and cash expenditures
is presented on Appendix A, with a brief summary thereof in the body of the
report.
-
In order to simplify the basic computation of income, only the total amounts
of payments in cash, non-income items and deposits, purchases, and operating
expenses are shown on that appendix and the detailed information concerning
those items is set forth on subsidiary appendices.
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In more complicated investigations, it might be advisable to use separate
appendices or schedules for the particulars of other items. It is assumed
in the report that the evidence concerning deposits of customers' checks
will be shown on Appendix A-1. Since the format of that appendix is adequately
described in the body of the report, a sample is not provided. Although the
sample report may be used as a guideline in preparing reports on bank deposit
investigations, the form and content of the report and appendices will vary
according to the facts and circumstances of the investigation.
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[9.5] 8.7 (03-19-1999)
Reports on Wagering Tax and Coin-Operated Gaming Device (COGD) and Seizure
Investigations
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In preparing reports on wagering tax and coin-operated gaming device
investigations, the special agent should follow the outline for reports on
tax fraud investigations shown in 8.4.1 of this chapter, with the elimination
of any section that is not necessary to a complete presentation of the facts.
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The flagrancy of the violation, the importance of the violator, and whether
the investigation was adopted from local police authorities or developed
through independent investigation by Criminal Investigation should be covered
in the report.
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An optional short form report has been developed for use in wagering tax
and coin-operated gaming device investigations. To the extent possible the
short form report should be utilized in these investigations.
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Internal Revenue Manual
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Hndbk. 9.5 Chap. 8 Investigative Reports
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(03-19-1999)
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