7 August 2001

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

Handbook 9.6
Trial and Court Related Activities


Chapter 1
IMMUNITY & COMPULSION ORDERS

Contents

[9.6] 1.1  (07-29-1998)
OVERVIEW

  1. This chapter deals with a witness being granted immunity from criminal prosecution and compelling witnesses to testify. The topics discussed are as follows;
    • Immunity-Authority and Department of Justice, Tax Division Policy.
    • Applicability of Procedures for the Utilization of 18 USC 6004.
    • Summons Procedure Prior to Requesting a Compulsion Order.
    • Requesting immunity for acts of production.
    • Considerations relevant to requesting a compulsion order.
    • Compulsion Order Request Procedures.
    • Procedures for potential perjury/false statement referrals after a compulsion order.
    • Report requirements.
    • Safeguarding transcripts and other immunized information.
    • Prosecution of a compelled witness for tax offenses.
    • Civil use of material obtained under a compulsion order.

[9.6] 1.2  (07-29-1998)
IMMUNITY-
AUTHORITY AND DEPARTMENT OF JUSTICE, TAX DIVISION POLICY

  1. With the approval of the Attorney General or delegate, the Secretary of the Treasury is authorized to issue orders compelling testimony in agency proceedings pursuant to 18 USC 6002 and 6004. By Treasury Department Order No. 150-88, the Secretary of the Treasury delegated this authority to the Commissioner of Internal Revenue who redelegated the authority to the Deputy Commissioner, the Assistant Commissioner (CI), and the Chief Inspector (see Delegation Order No. 169).
  2. An agency proceeding as defined by 18 USC 6001, is a proceeding before an agency with respect to which it is authorized to issue subpoenas and to take testimony or receive other information from witnesses under oath.
  3. In a proceeding where the IRS is authorized to issue a summons, the designated officials of the Service may issue, with the approval of the Attorney General or delegate, an order compelling individuals to give testimony or to produce information which they refuse to give or produce on the basis of the right against self-incrimination, if in the judgment of the designated officials:
    1. The testimony or other information from such individual may be necessary to the public interest; and
    2. Such individual has refused to testify or provide other information on the basis of the right against self-incrimination.
  4. The Assistant Attorney General, Tax Division, has set forth the policies of the Department of Justice regarding the review and approval of requests under 18 USC 6004 for authorization to issue orders compelling testimony and the production of other information in Internal Revenue Service proceedings.
  5. Testimony or other information compelled under the order, and information directly or indirectly derived from such testimony or other information, may not be used against the witness in any criminal investigation, except a prosecution for perjury, giving a false statement, or otherwise failing to comply with the order.

[9.6] 1.3  (07-29-1998)
APPLICABILITY OF PROCEDURES FOR THE UTILIZATION OF 18 USC 6004

  1. These procedures will be employed only in investigations conducted by the Criminal Investigation Division. Orders to compel testimony will not be requested for matters initiated in other divisions of the IRS unless and until the case has been referred to and accepted by the Criminal Investigation Division. For example, to obtain an order to compel the testimony of a person employed as a bookkeeper of a large corporation being examined under the Coordinated Examinations Program, either the principal corporation or some related entity or individual must first be accepted for investigation by the Criminal Investigation Division.
  2. Requests for authorization to compel testimony will be submitted only for testimony, books, papers, records or other data to be given or produced in IRS proceedings which have been initiated by a summons issued under 26 USC 7602. Procedures for the utilization of 18 USC 6004 will not be employed in connection with grand jury investigations which fall within the purview of 18 USC 6003.
  3. Requests for approval to compel testimony will be limited to investigations and situations which, in the judgment of the requester and reviewers, are significant and in which an order compelling testimony is the only viable administrative tool for obtaining necessary information. Employees of the Criminal Investigation Division should consult District Counsel for pre-referral advice prior to initiating such a request.
  4. A request for approval to compel testimony will be submitted only after a witness has been summoned pursuant to 26 USC 7602, and has actually appeared and invoked his/her Fifth Amendment privilege in response to significant or essential questions posed by the special agent.

[9.6] 1.4  (07-29-1998)
SUMMONS PROCEDURE PRIOR TO REQUESTING A COMPULSION ORDER

  1. In an investigation the Fifth Amendment claim may be invoked by any party who is interviewed who thinks that his or her testimony would be incriminating.
  2. If the witness is a target of the investigation, or if during the course of an interview the special agent determines that the witness may be a target of the investigation, the special agent should read the witness the information on the "advice of rights" card. The special agent should not ask the witness whether he or she will assert the privilege. The Fifth Amendment claim is to be initiated by the witness.
  3. Each witness for whom a compulsion order is to be requested must be served with a summons issued by a special agent of Criminal Investigation under 26 USC 7602, and in accord with current case law governing the use of these summonses. Where applicable, the provisions of 26 USC 7609 will be followed.

[9.6] 1.4.1  (07-29-1998)
Compulsion Order Requests When Summons is Issued and a Fifth Amendment Claim Is Offered During an Interview

  1. Once a witness has been summoned and has appeared and invoked the Fifth Amendment right against self-incrimination in response to specific questions posed by the special agent;
    1. The return date of the summons may be continued until authorization to issue a compulsion order has been sought and granted.
    2. The witness should be advised that the proceedings under the "initial" summons have been adjourned and the witness' reappearance will be scheduled. In this regard, the special agent should keep in mind that, in addition to the time needed to consider such application within the IRS, a minimum of three weeks from the date of receipt of the request by the Department of Justice will be needed to obtain an authorization from the Tax Division.
    3. When the issuance of the compulsion order has been approved, the witness can be directed to reappear, and compliance with the summons will then be directed by issuance of an order pursuant to 18 USC 6004.
    4. Absent unusual circumstances, a new summons is not necessary in order to request the witness' reappearance after a compulsion order has been authorized. However, if the agent does not properly adjourn the hearing, a new summons may need to be issued.
    5. In the event a witness fails to appear or otherwise comply once the order is approved, compliance should be sought pursuant to a summons enforcement action.

[9.6] 1.4.2  (07-29-1998)
Compulsion Order Requests When No Summons Was Issued Prior To A Fifth Amendment Claim Offered During an Interview

  1. If during an interview or conference which was not initiated by use of a summons, a Fifth Amendment claim is advanced, substantive questioning shall proceed until the witness expressly refuses to answer further questions on the basis of his or her privilege against self-incrimination. The special agent should try to determine all relevant areas where the privilege will be claimed.
  2. When a Fifth Amendment claim is advanced during an interview or conference which was not initiated by use of a summons:
    1. Substantive questions should be asked to ascertain all relevant areas where the privilege will be claimed.
    2. Questioning shall proceed until the witness expressly refuses to answer further questions on the basis of a right against self-incrimination and until the scope of the claim can be determined.
    3. Substantive questions shall be asked to ascertain all relevant areas where the right will be claimed so that an accurate assessment of the need for requesting authorization to issue a compulsion order may be made. Such authorization will not be requested if it is apparent that the Fifth Amendment right is only advanced in response to nonessential questions.
    4. This information will also enable the Service to decide whether to issue a summons.
  3. If the Chief, Criminal Investigation Division, decides that an effort will be made toward obtaining an order compelling testimony, the following procedures will be followed:
    1. The witness will be summoned.
    2. The witness will be sworn.
    3. A verbatim transcript will be made of the interview.
    4. Substantive questions will be asked to determine the scope of the Fifth Amendment claim.
  4. When the witness has been summoned and has appeared and again invoked his or her Fifth Amendment privilege in response to specific questions posed by the special agent;
    1. The return date of the summons may be continued until authorization to issue a compulsion order has been sought and granted.
    2. The witness should be advised that the proceedings under the "initial" summons have been adjourned and the witness' reappearance will be scheduled. In this regard, the special agent should keep in mind that, in addition to the time needed to consider such application within the IRS, a minimum of three weeks from the date of receipt of the request by the Department of Justice will be needed to obtain an authorization from the Tax Division.
    3. When the issuance of the compulsion order has been approved, the witness can be directed to reappear, and compliance with the summons will then be directed by issuance of an order pursuant to 18 USC 6004.
    4. Absent unusual circumstances, a new summons is not necessary in order to request the witness' reappearance after a compulsion order has been authorized. However, if the agent does not properly adjourn the hearing, a new summons may need to be issued.
    5. In the event a witness fails to appear or otherwise comply once the order is approved, compliance should be sought pursuant to a summons enforcement action.

[9.6] 1.4.3  (07-29-1998)
Procedures When A Witness Reappears In Response To An Adjourned Summons

  1. When a witness reappears in response to the adjourned summons the following procedures must be observed:
    1. A verbatim transcript of the proceedings will be recorded only by a court reporter of the United States District Court or a reporter licensed or certified by a State or Federal Court.
    2. The person conducting the proceeding must notify the stenographer or reporter that all original notes must be retained until notified that they may be destroyed.
    3. The witness will be sworn.
    4. The proceeding in which the witness is compelled to testify should commence by the special agent making reference, on the record and in the presence of the witness, to the date of the witness' prior appearance and the invoking of the Fifth Amendment at that time. The order and the authorization letter from the Assistant Attorney General, Tax Division, shall be marked as exhibits and the order shall be read aloud by the special agent into the record in the presence of the witness. The witness will be shown the originals and given a copy of both of these documents and asked to examine the documents and verify the copies. The witness shall be permitted to retain a copy of both documents. The originals will be retained by the agent in the district office with the record for use as an exhibit in any future proceeding (including inclusion of a copy as an exhibit in transmitting the investigative report).
    5. When testimony or other information is produced pursuant to a compulsion order, it is vital that complete, accurate copies be retained and authenticated as conforming to the originals of any books, records, or other documents provided by the witness.

[9.6] 1.4.4  (07-29-1998)
Summons Enforcement Procedures Prior To Requesting A Compulsion Order

  1. A summons enforcement action is needed to direct that witness' appearance and response to specific questions posed by the special agent before requesting an order pursuant to 18 USC 6004 when one of the following situations may occur;
    1. The witness fails to appear pursuant to the initial summons.
    2. The witness challenges the initial summons on grounds other than Fifth Amendment right.
    3. The witness is a third-party recordkeeper, where the taxpayer files a petition to quash the summons pursuant to 26 USC 7609.
    4. The witness otherwise refuses to comply with the initial summons.
  2. This summoned party, who has either simply refused to appear or who has refused to comply on grounds other than the Fifth Amendment right against self-incrimination, may later invoke the Fifth Amendment in response to specific questions during the hearing in Court on the summons enforcement action. In that event, if it is determined by the Government that a request for authorization to issue a Section 6004 compulsion order should be made, it is anticipated that the attorney for the Government will request a continuance until a decision on the request can be made. If the request is approved, it is anticipated that the Court (upon finding that any other non-Fifth Amendment claims are resolved in the Government's favor) will be requested by the attorney for the Government to order the witness to appear before the Service.
  3. In the event a summons enforcement action results from challenges made by a witness on grounds other than the Fifth Amendment, and no Fifth Amendment claim is raised during the course of the summons enforcement proceedings, but the witness, after being directed to reappear before IRS by the Court, then invokes the Fifth Amendment for the first time before the Service, the IRS proceedings may be adjourned until a request for authorization to compel testimony is made and considered. The special agent should advise the attorney for the Government who handled the summons enforcement action of the need for the adjournment and of any other significant development occurring in the course of the proceedings before the IRS. It is anticipated that the attorney for the Government will inform the Court of these developments.
  4. If, after being served with the order, the witness still refuses to answer questions or furnish information;
    1. The interrogation or conference will be terminated.
    2. An expedited transcript will be requested from the reporter.
    3. A request for civil enforcement of the summons will be prepared by the special agent.
    4. Upon receipt of the transcript, the special agent will immediately transmit, 1. the original and four copies of the request, 2. together with the original of the summons (Form 2039) and related documents, 3. the transcript, 4. the original order compelling testimony, and 5. the authorization from the Tax Division, to the District Director. (An information copy will be sent to the Director of
      Investigations.)
    5. The District Director will forward the package to District Counsel.
  5. Requests approved by District Counsel will be forwarded to

    Chief Counsel, Attention: General Litigation Division,
    Chief Counsel, in turn, will forward approved requests to the appropriate Civil Trial Section of the Tax Division with a copy to the Criminal Section, Tax Division of the Department of Justice.

[9.6] 1.5  (07-29-1998)
REQUESTING IMMUNITY FOR ACTS OF PRODUCTION

  1. The contents of subpoenaed business records of a sole proprietorship are not subject to a claim of right against self-incrimination since such records are created voluntarily prior to the issuance of the subpoena. However, a witness' act of production in response to a subpoena may have testimonial aspects that constitute tacit and incriminating admissions for which statutory immunity must be granted before production may be compelled.
  2. Generally, the testimonial aspects of the act of production go to the existence, possession and authenticity of the records being sought. That is, merely by producing subpoenaed or summoned records, the witness provides an admission that:
    1. The records called for in the subpoena or summons exist;
    2. Such records are in the possession and control of the witness; and
    3. The records being produced are the records described in the subpoena or summons.
  3. A compulsion order under 18 USC 6004 may be used to immunize only those aspects of the act of production that are testimonial in nature. When a witness receives such immunity, the government is precluded from the use and derivative use of the witness' act of production to establish the existence, possession, or authenticity of the records that are produced. However, when the government can establish independently from the act of production that the records do exist and are in the possession of the witness, and there is an independent means by which the records can be authenticated (e.g., third party testimony, handwriting analysis, etc.), the contents of the records may be used in evidence against the witness in a criminal proceeding.
  4. A request for immunity under 18 USC 6004 solely for a witness' act of production will be considered only in factual situations which satisfy all of the following conditions:
    1. The investigation is a criminal investigation;
      NOTE:
      Procedures for the utilization of 18 USC 6004 will not be employed in connection with grand jury investigations which fall within the purview of 18 USC 6003.
    2. The witness must have, and invoke, a valid Fifth Amendment claim to the production of such records.
    3. The records sought to be compelled are clearly business records.
    4. The summons being issued does not seek testimony from the witness.
    5. The records sought to be compelled are described with sufficient particularity so as to be easily identified.
    6. If the party summoned is a target of the investigation, the records sought to be compelled are not otherwise obtainable from third parties (e.g., bank, bookkeeper, accountant).
    7. The witness to be immunized is not being required, as a result of the summons, to create any records.
    8. There is evidence available to establish that the records being sought presently exist in the possession of the party to be summoned and there appears to be an independent means to authenticate the records once production is made.
  5. When a special agent determines that a summons should be issued for business records from a witness or target for whom act of production immunity will be required, the concurrence, and the assistance of District Counsel in the drafting of the summons, should be sought. The summons must be narrowly drafted to seek only production of business records that are known to presently exist in the possession of the summoned party.
  6. If the summoned party refuses to comply based on a valid Fifth Amendment claim in a recorded "Question and Answer" statement, CI will prepare and process a compulsion order request. The compulsion order request should also contain a section which covers the independent authentication of the requested records and specifies which records can be identified by each witness.
  7. After approval of the compulsion order by the Department of Justice and the Assistant Commissioner (CI), the procedures set forth in section 9.6.1.4.3 of this chapter entitled "Procedures When A Witness Reappears in Response To An Adjourned Summons" will be followed except that:
    1. A District Counsel attorney will be requested to attend the proceeding.
    2. The summoned party will be directed to turn over the requested documents to the District Counsel attorney who will immediately inspect the records to determine whether any documents are produced that are not covered by the summons.
    3. If any documents outside the summons are produced, the District Counsel attorney will advise the summoned party that the immunity order does not cover the witness' act of producing those
      documents.
    4. Documents not covered by the summons will be immediately returned to the witness unless the witness expressly waives any Fifth Amendment rights in regard to the documents.
    5. If the volume of documents makes it impractical to perform an inspection at the time of production, the witness will be advised that the documents will remain under the control of District Counsel until such time inspection can be performed.
    6. The District Counsel attorney will perform an inspection of the documents as soon as possible. Until such an inspection is completed, none of the documents produced will be made available to the special agent.
    7. After inspection, all documents covered by the summons will be released to the special agent.
    8. All documents outside the scope of the summons will be retained by District Counsel. District Counsel will immediately advise the witness or the witness' attorney by certified mail of the documents found to be outside the scope of the summons and immunity order. The witness will be requested to reclaim the documents or provide an express waiver of any Fifth Amendment rights in regard to such documents.
    9. If an express waiver is not received within 30 days of the date of District Counsel's letter, the documents will be sealed and returned to the witness by certified mail, return receipt requested, or by hand delivery by an agent not assigned to the investigation.
  8. As soon as possible after receipt of documents obtained pursuant to an act of production immunity order, the special agent should obtain and document independent authentication of the records. Although independent authentication may not legally be required until an attempt is made to introduce the records in a criminal proceeding against the witness, the means to obtain such authentication may be unavailable by that time, e.g., if the only independent way to authenticate is by identification of the records by a third-party witness who dies between the date of production and date of trial.
  9. If the summoned party does not comply with the summons after receipt of the Compulsion Order, CI will refer the summons to District Counsel for judicial enforcement under existing procedures. The enforcement letter from District Counsel will be reviewed by the General Litigation Division before forwarding to the Tax Division, Department of Justice. Coordination with the Criminal Tax Division will be sought when
    appropriate.

[9.6] 1.6  (07-29-1998)
CONSIDERATIONS RELEVANT TO REQUESTING A COMPULSION ORDER

  1. The following considerations are designed to implement the Department of Justice Tax Division's policy regarding the utilization of 18 USC 6001-6005:
    1. That restraint and selectivity be used in authorizing requests to apply for or issue orders compelling testimony under 18 USC 6004, and
    2. That the reviewing officials be furnished all available information regarding the extent of the witness' involvement in the matters under investigation and the nature of the expected testimony in order that an informed and objective assessment of the advantages and risks involved in compelling testimony may be made.
  2. Requests for authorization to compel testimony from close family members of the subject of an investigation will rarely be approved by the Department of Justice, unless:
    1. The witness and the relative participated in a common business enterprise and the testimony to be elicited related to that enterprise or its activities.
    2. The testimony to be elicited relates to illegal conduct in which both the witness and the relative were active participants or
    3. The testimony to be elicited relates to a crime involving overriding prosecutorial concerns.
  3. The Government must be careful not to provide witnesses, who may be sympathetic to the taxpayer, with the opportunity to use immunity from prosecution as a means of exculpating the subject of the investigation by falsely accepting responsibility.
  4. The Department of Justice requires that the compelled testimony of witnesses who have been convicted, but not sentenced, on criminal charges will not be brought to the attention of the sentencing judge without the witnesses' consent.

[9.6] 1.7  (07-29-1998)
COMPULSION ORDER REQUEST PROCEDURES

  1. A request will consist of narrative responses, in memorandum form, keyed to the requested information outlined in paragraph (3) of this section as stated below. These items should be set forth in the memorandum with reference to the letter (a. through s.) corresponding to the item in paragraph (3). Where appropriate, a single memorandum may be prepared even where authorization for a compulsion order is being requested for more than one witness. The first page(s) of the request should consist of a Form 6186, Request for Authorization to Issue a Compulsion Order (Witness Identification Sheet). One Form 6186 should be submitted for each witness.
  2. Each request for authorization to issue a compulsion order will be transmitted by a memorandum addressed to the District Director from the requesting special agent. The last page of the request will contain approval lines for the following officials:
    1. Chief, Criminal Investigation Division.
    2. District Director.
    3. Director of Investigations.
    4. Assistant Commissioner (CI).
  3. In order to provide effective administrative review of the need for a compulsion order, and to comply with the requirements of the Department of Justice, the following information should be included in each request to compel testimony from a prospective witness. Reference should be made in the memorandum prepared by the special agent to the letters below in order to identify responses.
    1. The narrative memorandum should contain, as a caption, the following information; the name, address, taxpayer identification number, subject investigation number and similar data on each related investigation.
    2. A brief summary of the background of the investigation including the title and section numbers of the U.S. Code of the alleged violation(s) under investigation and the method of proving income which is currently being utilized.
    3. Indicate whether the witness is related, by blood or marriage, to the subject(s) of the investigation.
    4. Summarize each witness' role in the matter under investigation.
    5. Describe briefly the circumstances surrounding the witness' invocation of the Fifth Amendment, outlining the scope of the assertion, and the legal basis believed to underlie the assertion. Where possible, and when appropriate, state whether the right is being invoked by the witness in a capacity as a recordkeeper or corporate officer, or in an individual capacity, based on personal knowledge of or involvement in the matters under investigation.
    6. Summarize the witness' expected testimony.
    7. Indicate whether the witness may be in a position to exculpate the proposed subjects, even if it is not anticipated that the witness would do so if compelled to testify.
    8. Outline the basis for concluding that the witness will cooperate and testify truthfully if compelled to do so pursuant to 18 USC 6004. If it cannot be ascertained whether the witness will testify truthfully, so state.
    9. Attach witness' FBI Identification Record "(rap sheet)" and summarize any other known criminal activity. If the FBI Record is unavailable, explain. List any charges or investigations pending against the witness. If the witness is currently awaiting trial or sentencing, or has a case on appeal, provide information concerning the identity, location and status of such case including the name of the Government attorney handling said case.
    10. Describe the Federal or local offenses which may have been committed by the witness and could be disclosed during the course of his or her compelled testimony. Include here an analysis as to whether the witness could be prosecuted for a role in the matter under investigation and, if so, state the reasons why the Service has determined not to recommend prosecution.
    11. If the witness is the subject of any inquiry, civil or criminal, currently being conducted by the Service, indicate the office handling the matter and the nature of the inquiry.
    12. If the witness is represented by counsel, supply name of witness' attorney, and indicate whether that attorney or a member of that attorney's law firm is an attorney for one or more of the proposed subjects (including, for example, an employee of a corporation who is represented by the corporation's counsel). If the witness' attorney is also representing one or more of the proposed subjects, state whether the attorney has given any indication that representation will be withdrawn in the event an order to compel testimony is authorized.
    13. If the witness may assert the attorney-client privilege or other legal privilege, describe the possible effect of that privilege on the Government's attempts to obtain the witness' testimony.
    14. State whether any assurances or agreements are known to have been made with the witness by any Government representatives that could have the effect of affording the witness immunity from prosecution.
    15. List all other witnesses for whom authorization to compel testimony has been requested in this matter, or with whom an agreement not to prosecute may have been made by a Government representative. Specify whether such witnesses named are the subject of an authorization or an agreement.
    16. List any known electronic surveillance involving this investigation, and attach a summary report in the event an electronic surveillance is involved.
    17. Summarize any information available to refute any false statements which the witness may make.
    18. Summarize the attempts which have been made to secure from other sources the information the witness is expected to provide or, if appropriate, summarize the reasons why this information cannot be obtained from other sources.
    19. List the names and addresses of Federal and local law enforcement officers other than Service personnel notified of this request, if any, and report their views regarding the application. If it can reasonably be anticipated that other law enforcement agencies would have a substantial interest in the authorization under consideration, then indicate the efforts made to clear the proposed order with such agencies. Clearance with other agencies shall be effected in accordance with and subject to the provisions of Section 6103 of the Internal Revenue Code.
  4. The request will be comprised of the witness identification sheet(s); the memorandum setting forth the responses to the above items; a verbatim transcript or a detailed memorandum of the proceeding (a memorandum will be accepted only when the witness refuses to allow the interview to be recorded) wherein the witness asserts the Fifth Amendment right against self-incrimination or otherwise refuses to answer questions; and a copy of the original summons.
  5. Each request for authorization to issue a compulsion order will be submitted by the Chief, CI, with the approval of the District Director, to the Director of Investigations for consideration of approval. The Director of Investigations will indicate approval or disapproval within three workdays of its receipt. If the Director of Investigations agrees that it is appropriate to request authorization, the original and three copies of the request will be forwarded to the Assistant Commissioner (CI), Attn: Office of Tax Crimes.
  6. The Assistant Commissioner (CI), will indicate approval or disapproval within three workdays of receipt. If the Assistant Commissioner (CI), agrees that a request for authorization to compel testimony is appropriate, the original and two copies of the request will be forwarded to the Assistant Chief Counsel (Criminal Tax), for review of the propriety and legal sufficiency of the request and for preparation of a compulsion order to accompany it.
  7. The Assistant Chief Counsel (Criminal Tax), shall determine the propriety and legal sufficiency of the request. If the request is determined proper and legally sufficient, the Assistant Chief Counsel (Criminal Tax), shall prepare a proposed compulsion order for each witness and transmit them, along with an original and one copy of the request to the Assistant Commissioner (CI). The original request with all supporting exhibits and copies of all proposed compulsion orders will then be transmitted to the Assistant Attorney General, Tax Division, Department of Justice, Attention: Chief, Criminal Section. If the request is determined not proper or not legally sufficient, the Assistant Chief Counsel (Criminal Tax), will advise the Assistant Commissioner (CI).
  8. Upon forwarding the request to the Tax Division of the Department of Justice, the Assistant Commissioner (CI) will orally advise the Director of Investigations and the Chief, CI, of the requesting district that the request has been forwarded to the Department of Justice.
  9. Upon receipt of approval by the Assistant Attorney General, Tax Division, the Assistant Commissioner, (CI) will sign the order. The order, with the authorization letter (signed by the Assistant Attorney General, Tax Division) attached, will then be transmitted directly to the requesting district office, with copies to the Director of Investigations, Assistant Chief Counsel (Criminal Tax), and District Counsel. At the same time, the Assistant Commissioner (CI), will orally advise the Director of Investigations and the Chief, CI, of the requesting district that the order has been signed.

[9.6] 1.8  (07-29-1998)
PROCEDURES FOR POTENTIAL PERJURY/FALSE STATEMENT REFERRALS AFTER A COMPULSION ORDER

  1. In the event the witness appears and testifies, and evidence is available to prove that the witness testified falsely, the special agent should submit to District Counsel the following:
    1. The summons and related documents.
    2. The verbatim transcript and documents provided by the witness.
    3. The order compelling testimony signed and issued by the Assistant Commissioner (CI).
    4. The authorization letter from the Assistant Attorney General, Tax Division
    5. A report by the special agent setting forth in detail the reasons why the witness' testimony is alleged to be false, and the evidence that is available to support this allegation.

[9.6] 1.9  (07-29-1998)
REPORT REQUIREMENTS BY CRIMINAL INVESTIGATION RELATING TO COMPELLED TESTIMONY

  1. Within ten workdays after the witness has testified, the Chief, CI, will prepare and submit a Form 6185, Witness Follow-up Report, to the District Director on the use of the compulsion order. A copy should be immediately forwarded to the Criminal Section, Tax Division, Department of Justice. The report should be prepared whether or not the witness complies with the order, and whether or not it is believed that the witness has testified truthfully.
  2. A copy of the report will be sent to the following:
    1. Assistant Commissioner (Criminal Investigation), Attn: Office of Tax Crimes.
    2. Director of Investigations.
    3. District Counsel.
    4. Assistant Chief Counsel, General Litigation.
    5. Assistant Chief Counsel, Criminal Tax.
    6. Criminal Section, Tax Division, Department of Justice.
  3. The report shall contain the same information listed in section 1.8 (above), entitled "Procedures For Potential Perjury/False Statement Referrals After A Compulsion Order" .
  4. Supplementary reports should be submitted as necessary to report subsequent events of significance.

[9.6] 1.10  (07-29-1998)
SAFEGUARDING TRANSCRIPTS AND OTHER IMMUNIZED INFORMATION

  1. Service personnel should not disclose the nature, content, scope, or any other facet of the witness' compelled testimony before the Service. If inquiries are made to the Service concerning an individual who has previously furnished information pursuant to an order issued under 18 USC 6004, the fact that the person has given compelled testimony should be brought to the attention of the requesting department or agency.
  2. A copy of the verbatim transcript and order together with pertinent records and documents supplied by the witness should be included as exhibits to the special agent's final report recommending prosecution of the subject of investigation. A transcript used for such purposes will be accompanied by a cover sheet on which will be inserted the signature, name and title of each person having access to the transcript. All case transmittal material must contain a reference to the fact that the report contains such documents, and to the need for each reviewer to sign the cover sheet. The originals and all remaining copies of the transcript as well as authenticated copies of documents furnished will be placed under seal with the Criminal Investigation investigative file and will be retained for the same time as such file. In no instance shall a transcript or sealed documents or records be destroyed in less than 20 years from the date of the witness' appearance and testimony pursuant to the compulsion order.

[9.6] 1.11  (07-29-1998)
PROSECUTION OF A COMPELLED WITNESS FOR TAX OFFENSES

  1. If a separate criminal tax investigation is subsequently undertaken of a person who has previously been compelled by the Service to testify pursuant to a 18 USC 6004 order, the persons connected with the subsequent investigation should not be permitted access to the transcript of the witness' prior testimony or the documents, or copies thereof, which the witness provided under the compulsion order. Any Service personnel who have had access to the compelled testimony, or documents provided therewith, must exclude themselves from any investigative or review action in the subsequent investigation.
  2. If a prosecution recommendation is made to District Counsel for referral to the Department of Justice and the recommended defendant is known to have previously been compelled to testify under a 18 USC 6004 order, referring personnel should include the following information in the prosecution recommendation:
    1. The dates on which the recommended defendant was previously ordered to give testimony and produce documents; and
    2. A summary of the circumstances and information which will establish that the proposed criminal tax prosecution is independent of the prior compelled testimony or documents provided by the recommended defendant
    NOTE:
    The Department of Justice will not authorize prosecution of a witness previously compelled to testify pursuant to 18 USC 6004 unless the independent nature of the evidence can be clearly demonstrated.
  3. Where prosecution of a previously compelled witness is undertaken, a heavy burden is placed on the Government to establish that the evidence of the offense was derived from an independent source, and that the search for such evidence did not emanate in any way from the testimony given under compulsion.

[9.6] 1.12  (07-29-1998)
CIVIL USE OF MATERIAL OBTAINED UNDER A COMPULSION ORDER

  1. Testimony and other information provided by a witness under a Section 6004 order may be used in a related injunctive action under IRC 7407 or 7408 prior to the conclusion of the criminal case. Such testimony and other information will not be utilized in any other civil action (i.e., conducting civil audits, issuances of statutory notices, etc., relative either to a witness or a subject of the investigation) during the pendency of the criminal aspects of the investigation without the express written consent of the Assistant Commissioner (CI). If a prosecution referral to the Department of Justice is in effect, the concurrence of the Department of Justice must be obtained prior to the non-injunctive civil use of the testimony or information.

Internal Revenue Manual  

Hndbk. 9.6 Chap. 1 IMMUNITY & COMPULSION ORDERS

  (07-29-1998)


05/02/2001 14:29:31 EST