9.4.2  SOURCES OF INFORMATION

Manual Transmittal

March 9, 2012

Purpose

(1) This transmits a reprint with changes to 9.4.2, Sources of Information.

Material Changes

(1) Subsection 9.4.2.6.3(2) is revised to add Korea to the countries with Simultaneous Criminal Investigation Program (SCIP) agreements.

(2) All references to Director, International (CI:OPS:I ) have been changed to Executive Director, International Operations (CI:IO).

(3) All references to Director, International (LM:IN) have been changed to Deputy Commissioner, Large Business and International (LB&I).

(4) Exhibit 9.4.2-1 has been revised and the title changed to Simultaneous Criminal Investigation Program.

(5) Position titles have been updated throughout the section to reflect the new organizational titles that were effective with the October 1, 2011, reorganization of Criminal Investigation.

(6) Additional revisions, deletions, and grammatical changes were made throughout the section, which did not result in substantive changes but contributed to procedural clarity of the subject matter.

Effect on Other Documents

This IRM supersedes IRM 9.4.2, Sources of Information, dated March 15, 2007.

Audience

CI

Effective Date

(03-09-2012)

Terry L. Stuart for Rick A. Raven
Acting Chief, Criminal Investigation

9.4.2.1  (03-15-2007)
OVERVIEW

  1. Compliance with the laws which the IRS is authorized and directed to enforce cannot always be determined solely by reference to the information on returns and documents filed with IRS. Therefore, the IRS must obtain information from outside sources for the effective administration of the tax laws, (see IRM 1.2.1, Policies of the Internal Revenue Service (Policy Statement P–1–1)).

  2. The term "relevant investigative information" means documents, statements, facts, testimony, and other data which reasonably may be expected, either singularly or cumulatively, to indicate a potential violation of Federal law. Documents, statements, facts, testimony or other data which relate to the personal habits of a person may be gathered if it is " directly relevant investigative information."

    Note:

    Information relating to any expenditure of money, or for which an expenditure of money would normally be expected, is almost always directly related to any income tax investigation. If the information is not "directly relevant investigative information," but is commingled with other information in the same document, it may be retained.

  3. Under no other circumstances will information on the personal habits of a person be gathered, developed, or retained.

  4. Depending upon the nature of the investigation, nearly every governmental agency, business, financial entity, school, customer, client, supplier, utility company, neighbor, friend, relative, classmate, or associate of any kind is a potential source of information.

  5. This section relates to the different sources available to gather information during the course of an investigation. Some of the sources of information are:

    1. governmental records

    2. business, financial, professional, and educational records

    3. investigative databases

    4. informants

  6. In selecting which sources to be contacted, it is important to balance the likelihood of obtaining directly relevant investigative information with the potential for wasting valuable time and effort.

  7. The special agent must also be mindful of the disclosure provisions of 26 USC §6103 in determining how best to obtain necessary information, (see IRM 9.3.1, Disclosure).

9.4.2.2  (08-09-2004)
Governmental Sources of Income

  1. Federal, state, county, and local governments maintain an abundance of official files that may be relevant to a criminal investigation. Governmental records are obtained in a variety of means and most are detailed in IRM 9.4.4, Requests for Information. The IRM 9.4.4, contains a description of records maintained and procedures on obtaining internal records from the IRS along with other Federal agencies and regulatory commissions.

9.4.2.3  (08-09-2004)
Business, Financial, Professional, and Educational Records

  1. Most businesses, organizations, or other entities maintain records concerning their dealings with individuals. These records include financial transactions, personal identification information, degree or licensing information, and an infinite variety of other information of value to criminal financial investigations.

  2. Organizations and business entities that may be of special interest in investigations, along with a description of the records they maintain and the procedures to obtain such records, can be found in IRM 9.4.4, Requests for Information.

9.4.2.4  (03-15-2007)
Investigative Computer Databases, Networks and Other Electronic Storage Media

  1. A large number of computer databases are available on the internet to special agents searching for information concerning their investigations. Netscape’s Net Directory, as well as similar search engines on most internet services, provide nationwide name search capability. Databases of alumni associations, professional licenses, society memberships, club memberships, business customers, subscribers to various services, and a vast number of other organizations maintain current lists that allow the general public to contact people with similar interests, or provide assistance to those who are in search of a business or professional relationship. Use of these databases provides a fast and inexpensive means of obtaining a wide variety of useful leads.

  2. Field offices have access to Lexis/Nexis, a comprehensive legal reporting service which, for a fee, provides complete and up to the minute information on all published legal decisions in the nation. Furthermore, it contains most of the resources of a law library, with instantaneous access.

  3. Electronic information can be obtained by consent, subpoena, or search warrant. Consent searches must be voluntarily given and may be limited in scope. Seek consent from the subject, employer, or other party with authority established by law. Always consider the use of a summons/subpoena for computer information not under the control of the subject. Summons/subpoena computer records as they exist at the time of service of the subpoena. Direct the recipient to make and safeguard a copy of the requested information, even if they intend to contest the subpoena. Subpoena the subject(s) for passwords and encryption keys. A grant of act of production immunity may be required.

  4. Statutes impose restrictions and obligations on the special agent and any operator of public computer services. Review the following before attempting to obtain evidence from electronic sources:

    • First Amendment to the Constitution

    • Fourth Amendment to the Constitution

    • Wiretap Act, 18 USC §2510 and 18 USC §2521

    • 18 USC §2701 and 18 USC §2711

    • Privacy Protection Act, 42 USC §2000aa

    • Federal Rules of Criminal Procedure, Rule 41

    • Federal Rules of Evidence, Sections 901, 1001, and 1002

  5. Obtain additional information to secure evidence from computers and other electronic media from the following sources:

    • Internet Investigation Guidelines written by CI

    • Computer Investigative Specialist (CIS)

    • Federal Guidelines for Searching and Seizing Computers published by the Department of Justice (DOJ)

    • Internet Investigation Guidelines published by the DOJ

    • Division Counsel/Associate Chief Counsel (Criminal Tax)

    • Computer and Telecommunications Coordinators (CTCs) at the local US Attorney's Office or Assistant US Attorneys that have received special training in the computer crimes subject area

    • Tax Division, Department of Justice: Senior Trial Attorney, available at (202) 514-2832 and Fax (202) 514-3081

    • Computer Crime and Intellectual Property Section, Department of Justice at (202) 514-1026 and fax (202) 514-6113

9.4.2.4.1  (08-09-2004)
Treasury Enforcement and Communication System

  1. The Treasury Enforcement and Communication System (TECS) is used extensively by the law enforcement community. This subsection discusses the information available on TECS. Items discussed include:

    • description and purpose of TECS

    • responsibilities for TECS

    • information available from TECS

9.4.2.4.1.1  (03-15-2007)
Description and Purpose of Treasury Enforcement and Communication System

  1. Treasury Enforcement and Communication System (TECS) is a computerized information system designed to identify individuals and businesses suspected of, or involved in, violation of Federal law. Treasury Enforcement and Communication System is also a communications system permitting message transmittal between Treasury law enforcement offices and other Federal, national, state, and local law enforcement agencies. The TECS provides access to the FBI's National Crime Information Center (NCIC) and the National Law Enforcement Telecommunication Systems (NLETS) with the capability of communicating directly with state and local enforcement agencies. The NLETS provides direct access to state motor vehicle departments.

9.4.2.4.1.2  (08-09-2004)
Responsibilities for the Treasury Enforcement and Communication System

  1. The responsibility for TECS lies both in Headquarters (HQ) and the field offices. The following subsections provide a brief description of these responsibilities.

9.4.2.4.1.2.1  (03-09-2012)
Associate Director, Warrants and Forfeitures

  1. The Associate Director, Warrants and Forfeitures will be responsible for ensuring that all TECS entries meet authorized disclosure criteria.

  2. All fugitive entries will be made through HQ and all non-fugitive entries will be made through or authorized by the Associate Director, Warrants and Forfeitures.

  3. Headquarters is also responsible for conducting and coordinating periodic training for TECS operators, as well as providing operating instructions, including the TECS Operating Manual, at all locations, and additional instructions as needed.

9.4.2.4.1.2.2  (03-09-2012)
Resident Agent in Charge, Scheme Development Center

  1. Each Resident Agent in Charge (RAC), Scheme Development Center (SDC), will be responsible for:

    1. designating TECS users and coordinating their training

    2. performing queries for field offices upon request, and reporting the results upon receipt of a TECS reply (either a HIT or a No Record) by telephone, transmission of the TECS hard-copy reply to the field office, or by attachment of the hard-copy reply to the primary investigation (PI) being evaluated

9.4.2.4.1.2.3  (08-09-2004)
Special Agent in Charge

  1. The Special Agent in Charge (SAC) in each field office will be responsible for:

    1. designating a TECS Systems Control Officer (SCO) to assist other users and compliance functions in obtaining authorized data

    2. designating TECS users and coordinating their training

    3. disseminating written instructions to field office personnel regarding TECS query requests within the general guidelines as stated in this section

    4. providing HQ with a mailing list for their field office of direct distribution recipients of wanted circulars

9.4.2.4.2  (08-09-2004)
Information Available From Treasury Enforcement and Communication System

  1. All information retrieved from TECS must be stamped OFFICIAL USE ONLY.

  2. The US Customs Financial Intelligence Branch (FIB) Financial Information Database provides information via TECS as follows:

    1. Form 4789, Currency Transaction Reports (CTR)

    2. Reports of Foreign Bank and Financial Accounts (FBAR), Treasury Form 90-22.1

    3. Form 8362, Currency Transaction Reports by Casinos (CTRC)

    4. Suspicious Activity Reports (SARs), Form TDF 90-22.47

  3. Also available from FIB's Financial Information Database are special computer runs summarizing Currency or Monetary Instruments (CMIR) data. Requests for special computer runs must be sent to the IRS Detroit Computing Center. Requests must include:

    1. the individual or business name

    2. address

    3. identifying number (social security number (SSN), employer identification number (EIN), etc.)

  4. Printouts will only be generated for specific entities where a large volume of filings are applicable or where a search is required utilizing parameters not available for on-line queries.

  5. Requests for special computer runs summarizing CTR, CTRC, and FBAR data should be made to the IRS Detroit Computing Center, Attn: CI Representative, 985 Michigan Ave., Room 1043, Detroit, MI 48226. Requests should be signed by the SAC, and should include:

    1. individual or business name

    2. address

    3. identifying data (SSN, EIN, etc.)

    4. zip code or zip code range

    5. field office code

9.4.2.4.2.1  (08-09-2004)
Individual Records

  1. Individual records available from the TECS database come from the Immigration and Customs Enforcement (ICE), Bureau of Alcohol, Tobacco and Firearms (ATF), Treasury Inspector General Tax Administration (TIGTA) and IRS-CI.

9.4.2.4.2.1.1  (08-09-2004)
US Customs and Border Protection Service Records

  1. US Customs and Border Protection Service records include:

    1. Subject records of enforcement interest on persons, vehicles, vessels, aircraft, organizations (including businesses), articles, and firearms.

    2. Investigation records and enforcement information.

    3. Private Aircraft Enforcement System (PAES) which identifies tail numbers, owner and pilot of aircraft, as well as aircraft and passenger arrival.

    4. Vessel and aircraft sightings.

    5. Land Border Primary and Secondary operations concerning motor vehicles and their passengers entering the United States.

9.4.2.4.2.1.2  (08-09-2004)
Bureau of Alcohol, Tobacco, and Firearms Records

  1. Bureau of Alcohol, Tobacco, and Firearms records include:

    1. wanted persons and fugitives

    2. known and suspected violators of laws falling within the jurisdiction of ATF

    3. felons and dishonorably discharged veterans who have requested relief to own firearms and/or explosives under the Gun Control Act of 1968

    4. violent felons

    5. gangs and terrorists

9.4.2.4.2.1.3  (08-09-2004)
Treasury Inspector General, Tax Administration

  1. Treasury Inspector General Tax Administration records include:

    1. wanted persons and fugitives

    2. prosecution records

    3. arrests, indictments, and information (including convictions, dismissals, and other dispositions)

    4. stolen guns

    5. stolen articles

9.4.2.4.2.1.4  (08-09-2004)
IRS - Criminal Investigation

  1. The IRS-CI records include:

    1. wanted persons and fugitives

    2. non-resident delinquent taxpayers

    3. entries involved in the Intelligence (INTEL) database concerning questionable refund schemes

    4. all investigations included in Criminal Investigations Management Information System (CIMIS)

  2. Investigations included in the CIMIS are available through TECS via (command code) Subject Query Internal Revenue (SQIR). The purpose of having CIMIS records in TECS is to notify the field offices that another agency or CI office has queried the investigation subject. The CIMIS records input into TECS are not available to other agencies. The database for CIMIS information can be queried by:

    1. name

    2. social security number

    3. investigation number

    4. alias information (including doing business as a partnership)

    5. related investigation number

9.4.2.4.2.2  (03-15-2007)
Report of International Transportation of Currency or Monetary Instruments, Financial Crimes Enforcement Network Form 105

  1. The Currency or Monetary Instruments (CMIR) file contains a record of every individual who has filed a Financial Crimes Enforcement Network (FinCEN) Form 105 (formerly Customs Form 4790), Report of International Transportation of CMIR. This form is required to be filed by each person who physically transports, mails, ships, receives, or causes to be physically transported, mailed, shipped, or received currency or other monetary instruments in an aggregate amount exceeding $10,000 on any one occasion from the United States to any place outside the United States, or into the United States from any place outside the United States. A transfer of funds through normal banking procedures, which does not involve the physical transportation of currency or monetary instruments, is not required to be reported.

  2. If a TECS query results in a positive response, information contained on the CMIR will be received. If it becomes necessary to obtain a copy or certified copy of the CMIR, a request which includes the Report Control Number (RCN), should be directed to the Director of FinCEN at the Financial Crimes Enforcement Network, Post Office Box 39, Vienna, Virginia 22183. The request should include all available identifying data including:

    1. name

    2. social security number

    3. report control number

    4. date of birth

  3. For a certified copy of the CMIR, the request must also include the scheduled court date.

9.4.2.4.2.3  (03-09-2012)
Reports of Foreign Bank and Financial Accounts

  1. The FBAR, Form 90-22.1, is a Treasury form used by individuals, partnerships, trusts, or corporations having a financial interest in or authority, signatory or otherwise, over one or more bank accounts, securities accounts, or other financial accounts in a foreign country, when such account(s) have an aggregate value in excess of $10,000. This form is required to be filed at the Memphis Scheme Development Center or at any local IRS office. The Memphis Scheme Development Center presently processes all Forms 90-22.1 for input to TECS.

  2. The TECS foreign bank account files contain a record of entities who have submitted FBARs. If a TECS query results in a positive response, the name, address, SSN or EIN of the subject, and a microfiche number will be received.

  3. If it becomes necessary to obtain a copy or certified copy of a Treasury Form 90-22.1, a request should be directed to the Currency and Banking Reports Division, Criminal Investigation Program Coordinator, Detroit Computing Center, 985 Michigan Ave., Room 1043, Detroit, MI 48226. The request should include the microfiche number of all forms requested.

  4. Requests for special computer runs summarizing FBAR data should be made to the IRS Detroit Computing Center, Attn: CI Representative, 985 Michigan Ave., Room 1043, Detroit MI 48226. Requests should be signed by the SAC, and should include:

    1. the individual or business name

    2. address

    3. identifying numbers (SSN, EIN, etc.)

    4. zip code, zip code range, or field office code

9.4.2.4.2.4  (08-09-2004)
Other Records Accessible Through the Treasury Enforcement and Communication System

  1. Other records accessible through TECS include the NCIC and the NLETS.

9.4.2.4.2.4.1  (08-09-2004)
The National Crime Information Center

  1. The NCIC is operated by the FBI and contains records on:

    1. wanted persons and missing persons

    2. criminal history

    3. stolen and (felony) non-stolen vehicles

    4. stolen license plates

    5. stolen articles

    6. stolen securities

    7. stolen boats

    8. stolen guns

9.4.2.4.2.4.2  (08-09-2004)
The National Law Enforcement Telecommunication System

  1. The NLETS links the law enforcement agencies across the United States. The NLETS can be used to obtain:

    1. drivers license information

    2. motor vehicle registration information

    3. boat registration information

    4. snowmobile registration information

  2. The NLETS queries can be made from TECS for vehicle registration information (RQ). The following information can be used to make the query:

    1. license plate number, year, and vehicle type

    2. vehicle ID number, make, and year

  3. The NLETS queries can be made from TECS for drivers license information (DQ). The information needed for this type of query is:

    1. name, date of birth, and sex

    2. drivers license number

  4. The NLETS queries can be made from TECS also for state criminal history record information (IQ). For the state criminal history query enter:

    1. name and social security number

    2. name, date of birth, and sex

  5. To retrieve a full criminal history record (FQ) use the identification number from the IQ query.

9.4.2.4.2.4.3  (08-09-2004)
State Driver's License and Vehicle Registration

  1. All states will provide drivers license (DQ) and vehicle registration (RQ) information from motor vehicle files; however, the files of all states are not automated, therefore, there may be a delay in response time.

9.4.2.4.2.5  (08-09-2004)
Uses of Treasury Enforcement and Communication System Queries

  1. The TECS queries can be useful to CI when evaluating information or in an investigation.

9.4.2.4.2.5.1  (08-09-2004)
Information Evaluation

  1. If information appears to have CI potential, the following queries could be useful:

    1. TECS - To determine whether other agencies have ongoing or closed investigations or other information within CI's jurisdiction.

    2. NCIC, State, and Local Criminal History Files - Requests for criminal history files will be processed only for law enforcement purposes. Therefore, this information cannot be disseminated to other IRS functions.

    3. INTEL Files - To determine whether an entity or characteristic may be associated with a questionable refund scheme.

9.4.2.4.2.5.2  (08-09-2004)
Other Agency Investigations

  1. The Treasury Enforcement and Communication System may be queried to determine if a subject is or has been investigated by another Treasury agency. The Treasury Enforcement and Communication System may be useful in establishing a contact point within another agency or IRS field office from which available information can be requested. This action will also serve to prevent jeopardizing ongoing investigations and duplication of efforts.

  2. The TECS records often contain information, which may help to identify associates of the subject.

  3. The TECS, through the Private Aircraft Enforcement System (PAES), provides FAA information regarding private aircraft, pilot, and passenger arrivals coming into the United States.

  4. Data regarding land border and airport crossings by vehicles, passengers and pedestrians entering the United States can be retrieved on-line. The primary query history retrieval process also allows for the overnight retrieval (via printed reports) of records between one and six years old.

  5. Demographic data is available through TECS at the five digit zip code level and at the Census Bureau Enumeration District (BGED) level.

9.4.2.4.2.5.3  (08-09-2004)
Other IRS Functions

  1. Most TECS information is available to other IRS functions for use in investigations. The SAC, will designate a TECS coordinator to assist other operating divisions in securing information from TECS. All requests should be submitted on Form 5523, TECS Query Request and approved by the appropriate Supervisory Special Agent (SSA) or higher supervisory official. The approving official will submit all requests to the CI TECS coordinator. Emergency requests may be made by an SSA. All information from TECS must be stamped FOR OFFICIAL USE ONLY.

  2. The NCIC, state and local criminal history files, are available through the Interstate Identification Index (III) (Criminal History Files). These files may be used only in the administration of criminal justice. Therefore, this information cannot be disseminated to other operating divisions.

9.4.2.4.2.5.4  (08-09-2004)
Contacting Nonresident Delinquent Taxpayer Through Treasury Enforcement and Communication System

  1. To help alleviate the compliance problem of collecting delinquent taxes from taxpayers who, because they reside outside the jurisdiction of US courts, are not subject to ordinary administrative and judicial collection procedures, the IRS has a contact program which involves entering the names of certain nonresident delinquent taxpayers in TECS. This will help the IRS to contact nonresident delinquent taxpayers who routinely travel to the United States for business, employment, or personal reasons.

  2. The objective of the contact program is to improve tax administration and compliance by:

    1. collecting delinquent taxes

    2. securing delinquent returns

    3. identifying cases with criminal potential for referral to CI

  3. The success of the program depends on timely collection actions by the field offices.

9.4.2.4.2.5.5  (08-09-2004)
Treasury Enforcement and Communication System Information Available to Other Law Enforcement Agencies

  1. Treasury Enforcement and Communication System information can be provided to other law enforcement officials provided the following rules are followed.

  2. Third agency rule provides that information released to an agency cannot be released by that agency to another agency without the prior knowledge and consent of the agency that originally provided the information.

  3. According to NCIC: Each criminal justice agency receiving an Interstate Identification Index (III) (Criminal History) response shall record any third party dissemination of any III response to another criminal justice agency or an individual within another criminal justice agency, or to anyone legally entitled to receive such information who is outside the original receiving agency. (A notation must be made in the case file.)

9.4.2.5  (03-15-2007)
Informants

  1. Individuals who provide information and evidence to the Internal Revenue Service, law enforcement, and government agencies have traditionally been referred to as informants. The use of informants in generating investigations and developing leads is a critical part of the investigative process. There are a variety of individuals who provide information. Some desire to report suspicious or illegal activity while others want to actively assist with the development of evidence. Careful consideration and scrutiny must be applied when contemplating the use of informants who act at the direction of the IRS. Many informants will be utilized in a covert capacity by assisting in the monitoring of conversations and undercover operations. It is the responsibility of every special agent and manager to evaluate these informants and their use prior to engaging in such activities. These individuals will be acting at the direction of the IRS and it is therefore vital that the IRS put forth a diligent effort to determine who they are dealing with and the potential outcome of their actions.

  2. This section addresses:

    1. the classifications of informants,

    2. the registration process for confidential informants,

    3. the levels of approval required for authorizing the use of informants, and

    4. the handling of informants

9.4.2.5.1  (03-15-2007)
Classification of Informants

  1. Informants are classified into three categories:

    1. Confidential Informant (CI)

    2. Cooperating Witness (CW)

    3. Source of Information (SOI)

9.4.2.5.1.1  (03-15-2007)
Confidential Informants (CI)

  1. A Confidential Informant (CI) is any individual who:

    1. provides useful and credible information to a special agent regarding criminal activities, and from whom a special agent expects or intends to obtain additional useful and credible information regarding such activities in the future;

    2. acts at the direction of the IRS; and

    3. has any one of the following characteristics:


    i. expects their identity to remain confidential
    ii. faces the potential of any type of retaliation
    iii. receives payment or other compensation for future information or services (a memorandum of understanding must be prepared)
    iv. is a federal prisoner, or
    v. is a current or former member of the witness security program

  2. If deemed necessary, a special agent or supervisor may classify an individual as a confidential informant for any other reason not listed that would require confidentiality.

  3. The identity of the confidential informant is legally protected under the Freedom of Information Act (FOIA). Exemption (b)(7)(D) of the FOIA provides for the protection of records or information that can disclose the identity of a confidential source. The Supreme Court has ruled that confidentiality should not be applied automatically by law enforcement, but on a case by case basis. Consideration may include the understanding by the informant that the communications are confidential, threats of retaliation, prior retaliatory acts, or dangers faced by prison informants.

  4. Confidentiality is not an assurance of complete anonymity or secrecy, but an assurance that the IRS will not disclose the cooperation of the confidential informant, the information they provide, or their identity unless absolutely necessary.

  5. To prevent the CI from testifying, the special agent will put forth every effort to secure other evidence and witnesses in place of the CI.

  6. Confidential Informants will be handled in accordance with the following subsections.

9.4.2.5.1.2  (03-15-2007)
Cooperating Witness (CW)

  1. A Cooperating Witness (CW) is any individual who:

    1. provides useful and credible information to a special agent regarding criminal activities, and from whom a special agent expects or intends to obtain additional useful and credible information regarding such activities in the future;

    2. acts at the direction of the IRS;

    3. does not expect their identity to be kept confidential; and

    4. has agreed to testify

  2. Unlike a Confidential Informant, there is no expectation of confidentiality with a cooperating witness. A CW is expected to testify so they must understand that their identity may eventually be disclosed pursuant to judicial or administrative proceedings.

  3. Cooperating Witnesses will be handled in accordance with the following subsections.

9.4.2.5.1.3  (03-15-2007)
Source of Information (SOI)

  1. Sources of Information can be categorized into two types.

    1. The first would be an individual who does not meet the definition of a Cooperating Witness or Confidential Informant.
      • An example would be an individual who telephones or visits an IRS office to provide information but will not be directed in the future by the IRS to secure evidence.
      • Another example would be an individual who will be paid for information or evidence they secured independently and not at the direction of the IRS.
      • If any of these individuals will be directed by the IRS to secure evidence (e.g., recording a monitored conversation), the individual is then either a CI or CW.

    2. An SOI can also be an individual who:

      i) Provides useful and credible information to a special agent regarding criminal activities, and from whom a special agent expects or intends to obtain additional useful and credible information regarding such activities in the future; and
      ii) Provides information to a special agent solely as a result of legitimate routine access to information or records, such as a government agency or a legitimate business (e.g., financial institution), and not as a result of criminal association with persons of investigative interest to a special agent; and
      iii) Provides such information in a manner consistent with applicable law.
      • As an example, an employee of a financial institution who provides information in compliance with the Bank Secrecy Act (BSA) is a Source of Information.
      • Federal, state, and local law enforcement officials and other governmental officials, acting within the scope of their authority, who provide information to the IRS are considered Sources of Information. However, if such officials provide information with regard to corruption within their own agency, such as the acceptance of bribes by police officers, the officials shall be considered either a CW or a CI, depending on the circumstances.

9.4.2.5.1.4  (03-15-2007)
Classification of Subjects and Defendants

  1. A subject of a criminal investigation or the defendant in a criminal proceeding who provides information to a special agent will either be classified as a CI, CW, or SOI; whichever is more appropriate.
    • As an example, if the subject of an investigation cooperates, agrees to record conversations with co-conspirators at the direction of the IRS, is expected to testify and does not require confidentiality, then the subject is a cooperating witness. If there is a concern of a retaliatory act against this subject, they will be classified as a confidential informant.
    • If a defendant cooperates and simply provides testimony against co-conspirators, then the individual is a Source of Information.

  2. A special agent should consult a Federal Prosecutor and/or a Criminal Tax Attorney prior to utilizing these individuals as a CI, CW, or SOI.

9.4.2.5.2  (03-15-2007)
Report Requirements for Confidential Informants

  1. A special agent will be required to complete the following reports when handling a Confidential Informant:

    1. Form 9830, Request for Control Number, will be submitted to SIT.

    2. Form 9831, Approval to Utilize a Confidential Informant or Cooperating Witness, will be prepared to authorize the use of a CI.

    3. Form 9832, Annual Suitability Review of a Confidential Informant, will be completed every October to verify the CI’s suitability, justify the continued use of the CI, and verify that the CI reported taxable payments made by the IRS during the previous tax year.

    4. Form 9833, CI Identity Record, will be completed for each approved CI to document the identity of the CI.

    5. Form 9834, Instructions to CI/CW, will be reviewed with each CI.

    6. Form 9835, Receipt for Cash (if applicable), will be completed for each payment to a CI.

    7. Record of Deactivation.

  2. Every January a memorandum will be prepared to document that a paid confidential informant was advised of the total amount of taxable payments made by the IRS during the preceding tax year.

9.4.2.5.3  (03-15-2007)
Report Requirements for Cooperating Witnesses

  1. A special agent will be required to complete the following reports when handling a Cooperating Witness:

    1. Form 9831, Approval to Utilize a Confidential Informant or Cooperating Witness, will be prepared to authorize the use of a CW.

    2. Form 9834, Instructions to CI/CW, will be reviewed with each CW.

9.4.2.5.4  (03-15-2007)
Registration and Handling of Confidential Informants and Cooperating Witnesses

  1. Special agents are required to register, also known as "number" , Confidential Informants. Upon registration, the CI will be referred to by their assigned control number to maximize concealment of their identity. Registration will include the request for a control number, performing a suitability check to evaluate the CI, obtaining authorization from the proper level of management, and providing instructions to the CI. Additionally, periodic reviews of the CI’s suitability will be performed. This process enables the special agent to evaluate and monitor the CI’s credibility, reliability, criminal history, tax filing status, and other factors. As a CI, the IRS will be protecting the individual’s identity, information and cooperation from disclosure; therefore, it is of utmost importance to maintain a thorough review and monitoring process.

  2. A Cooperating Witness is not required to be registered (numbered) as there is neither an expectation of confidentiality, nor any other characteristic of a CI. Since the CW will be acting at the direction of the IRS, the special agent still needs to obtain authorization from the proper level of management, evaluate the credibility and reliability of the CW, and instruct the CW as to what actions they can and cannot take. The initial suitability review is the same for CWs as it is for CIs. If at any time it is determined that a factor meeting the classification of a Confidential Informant develops (e.g., a threat to the CW), a special agent needs to register the Cooperating Witness as a Confidential Informant.

9.4.2.5.4.1  (03-09-2012)
Registering a Confidential Informant – Form 9830

  1. Prior to seeking authorization to utilize a CI, a special agent will obtain a control number from the Office of Special Investigative Techniques (CI:IEO:OPS:SIT). A Form 9830 will be prepared and submitted to SIT via email to *CI-HQ-SIT-Confidential Informants. In exigent circumstances an individual can be utilized as a CI prior to registration, however, verbal authorization is required, followed by the submission of Form 9830 no later than seven (7) calendar days after verbal authorization is granted.

  2. Special Investigative Techniques will conduct a search to determine if the CI has been or is currently being utilized by Criminal Investigation. If a conflict is identified, SIT will review the CI’s history and report their findings to the requesting special agent for further action and/or resolution.

  3. Special Investigative Techniques will provide the requesting agent a control number for the CI. From this point forward, the CI will be referenced by his/her control number. It is then the responsibility of the special agent to obtain the required authorization to utilize the CI, comply with the reporting requirements, and deactivate the informant at the appropriate time pursuant to the following subsections.

9.4.2.5.4.2  (03-15-2007)
Approval to Utilize a Confidential Informant or Cooperating Witness - Form 9831

  1. It is essential to evaluate the reliability and credibility of every CI/CW. Form 9831, Approval to Utilize a Confidential Informant or Cooperating Witness, will be used to evaluate the individual’s suitability to serve as a CI/CW. The special agent will complete Form 9831 and forward it through management to the proper approving official. The approving official should consider, at a minimum, the following suitability factors to determine whether or not to authorize the use of the individual:

    1. The person's age.

    2. The person's alien status.

    3. Health of the CI/CW.

    4. Criminal history (record checks need to be maintained).

    5. The extent to which the IRS is ensuring that the information or assistance is limited to criminal matters.

    6. The extent to which the person's information or assistance would be relevant to a present or potential investigation or prosecution and the importance of such investigation or prosecution.

    7. The nature of any relationship between the CI and the subject or target of an existing or potential investigation or prosecution, including but not limited to a current or former spousal relationship or other family tie, and any current or former employment, business or financial relationship.

    8. The person's motivation in providing information or assistance, including any consideration sought from the government for this assistance. (People provide information for various reasons. When evaluating an informants reliability and credibility, his/her motives need to be considered. Possible motives may include seeking monetary gain, gaining revenge, altruism, self-aggrandizement, law enforcement buff, or eccentric thrill seeking.)

    9. The extent to which the person's information or assistance can be corroborated.

    10. The record of the IRS and the record of any other law enforcement agency (if available to the IRS) regarding the person's prior or current service as a CI/CW, including, but not limited to, any information regarding whether the person was at any time terminated for cause.

    11. The person's reliability and truthfulness.

    12. The person's prior record as a witness or informant in any proceeding.

    13. Whether the person is a substance abuser or has a history of substance abuse.

    14. Whether the person is a relative of an employee of any law enforcement agency.

    15. For Title 26 investigations - Whether the individual is a tax professional, including an attorney, accountant, return preparer, or enrolled agent. If so, a Criminal Tax Attorney must be contacted for advice on using this person and the following factors should be considered:
      i. whether the tax professional has a Power of Attorney (POA) from the potential subject
      ii. whether the tax professional currently has an agreement to work as an attorney for the potential subject
      iii. whether the tax professional is owed money by the potential subject
      iv. whether the potential subject is aware that he/she is being investigated
      v. whether the subject has invoked the Fifth Amendment relative to the IRS investigation

    16. Title 26 investigations – The individual’s tax filing and payment history, particularly any delinquencies (problems in this area do not necessarily preclude use of the informant; however, steps should be taken to correct any problems prior to the individual working with the IRS).

    17. The risk of physical harm that may occur to the person or his/her immediate family or close associates as a result of providing information or assistance to the IRS.

    18. The risk that the person might adversely affect a present or potential investigation or prosecution.

    19. Whether the person is a public official, law enforcement officer, union official, employee of a financial institution or school, member of the military services, a representative or affiliate of the media, or a party to, or in a position to be a party to, privileged communications (e.g., a member of the clergy, a physician, or a lawyer). If so, Criminal Tax will be consulted as well as the assigned Federal prosecutor in a grand jury case.

    20. Whether the person is reasonably believed to be the subject or target of a pending criminal investigation, is under arrest, or has been charged in a pending prosecution.

    21. Whether the person is reasonably believed to pose a danger to the public or other criminal threat, or poses a risk of flight.

  2. Although not required, the use of a polygraph to test the individual's credibility should be considered by the approving official.

  3. Verbal approval to authorize the use of a CW/CI can be obtained in exigent circumstances, but must be followed up with the Form 9831.

  4. The approved Form 9831 will be placed in the control file for CIs (see subsection 9.4.2.5.5 on control file) or the case file for CWs.

  5. An index file maintained by the SAC in each field office to track CIs and CWs will be updated (see subsection 9.4.2.5.6 on index file).

9.4.2.5.4.3  (03-15-2007)
Authorizing the Use of a Confidential Informant or Cooperating Witness

  1. Upon completion of the Form 9831, it must be forwarded through management to the proper approving official. The following subsections list the levels of approval for the various types of CI/CWs

9.4.2.5.4.4  (03-15-2007)
Approval Level - Special Agent in Charge or Director, Field Operations

  1. The SAC may authorize the use of most CI/CWs except when any one of the following factors are present, in which case the Director, Field Operations is the approving official:

    1. Risk of physical harm that may occur to the CI and/or the CI’s immediate family or close associates as a result of assisting the IRS. (There should be no CWs in this category. These individuals should be registered as CIs.)

    2. Risk that the CI/CW’s activities may adversely affect another investigation or potential prosecution.

    3. The CI/CW is a public official, law enforcement officer, member of the military services, a representative of the news media, or potentially a party to privileged communications (e.g., a member of the clergy, physician, a lawyer or certain experts retained by a lawyer). Criminal Tax and the Federal prosecutor, if assigned, need to be consulted and concurrence received.

    4. It is believed that the individual is the subject of a pending criminal investigation, poses a danger to the public or other criminal threat, or poses a risk of flight.

  2. Verbal authorization may be obtained in exigent circumstances followed by the written authorization no later than seven (7) calendar days after verbal authorization is granted.

9.4.2.5.4.5  (03-09-2012)
Approval Level - Director, Operations Policy and Support

  1. If any one of the following situations is known at the time of authorization, is identified at a later date, or subsequently develops, approval by the Director, Operations Policy and Support (CI:IEO:OPS) is required:

    1. When the CI/CW is a foreign national. (A foreign national is defined as any individual who is not a United States citizen.)

    2. When the CI/CW is to obtain information from a foreign country.

    3. When foreign travel by any CI/CW is anticipated.

  2. The SAC of the field office will submit a memorandum through the Director, Field Operations to the Director, CI:IEO:OPS requesting approval to use the CI/CW. The memorandum should be routed to the Office of Special Investigative Techniques for processing. The memorandum should address the following factors:

    1. CI's number or code name, or in the case of a CW, their name.

    2. Country of citizenship and current US immigration status (e.g., tourist visa, business visa, resident alien, if applicable).

    3. Position currently held by the CI/CW (e.g., foreign government official or bank official).

    4. Pertinent background information such as criminal record, associates, and employment history.

    5. Reliability of CI/CW.

    6. Criminal violations the CI/CW is providing information about, approximate dollar amounts of the violations, and years under investigation.

    7. Detailed statement explaining the background of the investigation, what information the CI/CW’s participation can provide, how the CI/CW will obtain the information, why the information is needed, and any other pertinent facts.

    8. If the CI/CW is obtaining information from a foreign country, identify country, the nature of the information, and how the CI/CW is obtaining the information.

    9. If foreign travel is involved, detail the country or countries to be visited, a complete itinerary, and a description of the circumstances that require the CI/CW to travel.

      Note:

      If items (h) or (i) are applicable, the concurrence of the Director, International Operations (CI:IO) is also required.

  3. Verbal authorization may be obtained in exigent circumstances followed by the written authorization no later than seven (7) calendar days after verbal authorization is granted.

9.4.2.5.4.6  (03-15-2007)
Department of Justice Approval Required

  1. Consistent with DOJ requirements, approval by DOJ, Criminal Division, Office of Enforcement Operations (OEO) is required for:

    1. Use of Federal prisoners or individuals under the control of the United States Marshals Service or Bureau of Prisons as informants, (see subsection 9.4.2.5.13).

    2. Use of current or former participants in the Federal Witness Security Program as informants, (see subsection 9.4.2.5.12).

    3. Use of informants to engage in the warrantless interception of certain sensitive categories of verbal communications as specified by the Attorney General, (see IRM 9.4.7, Consensual Monitoring). Such categories include members of congress, Federal judges, governors, and diplomats, or someone in custody of the Marshal’s Service or Bureau of Prisons, etc.

9.4.2.5.4.7  (03-15-2007)
Federal Probationers, Parolees, Detainees, or Supervised Releasees

  1. The United States Parole Commission (USPC) requires that Federal probationers, parolees, detainees and supervised releasees agree in writing not to act as informants or in other similar capacities for a law enforcement agency. However, exceptions may be granted on a case by case basis.

  2. If a special agent desires to utilize one of these types of individuals as a confidential informant or cooperating witness, the IRS must obtain the permission of a Federal probation, parole, or supervised release official with the authority to grant such permission, and this permission shall be documented. If such permission is denied or it is inappropriate for operational reasons to contact the appropriate Federal official, the IRS may seek to obtain authorization for the use of such individual from the court that is responsible for the individuals’ probation, parole, or supervised release provide that the IRS first consults with Criminal Tax and/or the Unites States Attorney’s Office.

9.4.2.5.4.8  (03-15-2007)
Annual Suitability Review of a Confidential Informant – Form 9832

  1. In October of each year an annual suitability review will be performed for all open Confidential Informants. The controlling special agent will complete Form 9832 to evaluate the suitability and justification to continue the use of the CI.

  2. During this review, the special agent will determine that the CI reported all taxable payments received in the previous tax year. In the event that the suitability review results in a determination that the CI did not report the payments as required, the IRS may utilize this information to discontinue the CI’s relationship with the government and, in so doing, may disclose the reason for discontinuing the relationship to other government agencies associated with the investigation, including the United States Attorney’s Office. In Non-Title 26 investigations where taxable payments were made to a CI who is required to file a tax return, the special agent should ensure that a "Consent to Disclosure of Tax Information" (Consent), which is attached to a Form 9835, was signed by the CI.

  3. If the review of the CI's tax account and/or tax return identifies issues of possible noncompliance the CI should be re-contacted. The controlling special agent will attempt to resolve the matter and advise the CI of the proper income tax reporting treatment for the particular issue. This meeting and advisement will be documented and filed in the CI's control file. Subsequent IDRS research will be conducted to ensure the CI has filed an amended or corrected return.

  4. If the CI still fails to comply with their Federal income tax obligations, the CI will be deactivated for cause and must not be used again. An Information Report Referral, Form 3949, will be prepared and forwarded for civil or criminal action. The narrative section should simply state that the individual received a taxable payment, refer to the amount received from the IRS, and generally describe the area of noncompliance. While the CI’s name shall be reported, the narrative should not disclose the nature of the relationship or the services performed on behalf of Criminal Investigation.

  5. If any other adverse findings are uncovered pursuant to this suitability review, they should be reviewed to determine whether deactivation is warranted. If it is recommended that the CI be deactivated for any cause, the deactivation procedures will be followed.

  6. The Form 9832 will be forwarded to the SAC for approval to continue the use of or deactivate the CI.

  7. The Form 9832 and signed consent (if prepared) will be placed in the CI’s control file.

9.4.2.5.4.9  (03-15-2007)
Form 9833, CI Identity Record

  1. After authorization to utilize the CI is granted, the controlling special agent will prepare Form 9833, CI Identity Record, and obtain a photograph of the CI.

  2. This form must be prepared manually as it contains the CI’s personal information. No electronic version will be prepared.

  3. Although not required, it is recommended that fingerprints be obtained for identification purposes.

  4. The Form 9833, photograph, and fingerprints (if obtained) will be filed in the control file.

9.4.2.5.4.10  (03-15-2007)
Form 9834, Instructions to Confidential Informant or Cooperating Witness

  1. Special agents will fully debrief the CI concerning his/her knowledge of criminal or unlawful activities. Special agents should always make every effort to elicit all facts known by the CI/CW at the initial contact. CI/CWs frequently supply only the information they think is important rather than relating all facts.

  2. Special agents must avoid conveying any confidential investigative information to a CI/CW (e.g., information relating to undercover activity, surveillance, search warrants, or the identity of other actual or potential informants), other than necessary for operational reasons.

  3. The special agents will advise the CI/CW that any information submitted by him/her concerning violations not under the IRS' jurisdiction will be furnished to the appropriate enforcement agency in accordance with IRS procedures, (see IRM 9.3.1, Disclosure, and IRM 11.3, Disclosure of Official Information).

  4. Prior to utilizing a CI/CW, the controlling special agent, in the presence of the backup agent or other law enforcement officer, will review the applicable information on Form 9834 with the CI/CW, which covers the following:

    1. The information provided by the CI/CW to the special agent must be truthful and that they must abide by the instructions of the special agent and may not represent themselves as an employee of the IRS.

    2. The CI/CW’s assistance and the information provided are entirely voluntary.

    3. The special agent cannot promise or agree to any immunity from prosecution or other consideration by a Federal Prosecutor’s office or a court in exchange for the CI/CW’s cooperation, since the decision to confer any such benefit lies within the exclusive discretion of the Federal Prosecutor’s office and the court. However, the special agent will consider (but not necessarily act upon) a request by the CI/CW to advise the appropriate Federal Prosecutor’s Office or Court of the nature and extent of his/her assistance to the special agent.

    4. The CI/CW has not been authorized to engage in any criminal activity and has no immunity from prosecution for any unauthorized criminal activity.

    5. The CI/CW will not tamper, intimidate, or entrap any witnesses, nor will they fabricate, alter, or destroy evidence.

    6. The CI/CW will not utilize any unlawful techniques (e.g., breaking/entering; unauthorized electronic surveillance; opening/tampering with the mail, etc.)

    7. The CI/CW may not enter into any contract or incur any obligation on behalf of the United States Government, except as specifically instructed and approved by the IRS. The CI/CW is not an employee of the US Government and must not take any independent action on behalf of the US Government.

    8. The special agent cannot guarantee any rewards, payments, or other compensation [if applicable]. The CI/CW needs to be advised of the IRS reward policy and procedures, and the use of Form 211, Application and Public Voucher for Reward for Original Information.

    9. The CI/CW was advised that any information he/she submits concerning non-tax violations of Federal, state, or local criminal laws will be furnished to the appropriate enforcement agency.

    10. [If applicable] No promises or commitments can be made, except by the Immigration and Naturalization Service, regarding the alien status of any person or the right of any person to enter or remain in the United States. This instruction should be provided if there is any apparent issue of immigration status that relates to the CI/CW.

    11. For CIs, the United States government will strive to protect a CI‘s identity, but cannot guarantee that it will not be divulged. The IRS will not disclose the cooperation, identity or information unless absolutely necessary (or under the terms of a separate memorandum of understanding, if applicable).

    12. In the event that the CI receives any rewards, payments, or other compensation from the IRS, the CI is liable for any taxes that may be owed. Payments should not be construed as an employer/employee relationship between the CI and the IRS.

    13. For CWs, they will be expected to testify in any legal proceedings, their identity may be disclosed, and there is no expectation of confidentiality on the part of the CW.

  5. The content and meaning of each of the foregoing instructional points must be clearly conveyed to the CI/CW. Immediately after these instructions have been given, the agent shall require the CI/CW to acknowledge his/her receipt and understanding of the instructions by initialing each applicable instruction on the Form 9834. The agent and the other law enforcement official shall document that the instructions were reviewed with the CI/CW and that the CI/CW acknowledged the instructions and his/her understanding of them by signing Form 9834.

  6. If the CI/CW refuses to initial the Form 9834 or, for operational reasons, the agent decides against requiring the CI/CW to sign or initial a written acknowledgment, the agent and the other law enforcement official shall document that the instructions were read verbatim to the CI/CW and that the CI/CW orally acknowledged the instructions.

  7. The instruction and documentation procedures shall be repeated whenever it appears necessary or prudent to do so.

  8. Form 9834 will be filed in the control file for a Confidential Informant or the case file for a Cooperating Witness.

9.4.2.5.4.11  (03-15-2007)
Form 9835, Receipt for Cash

  1. Form 9835, Receipt for Cash, will be completed whenever a payment is made to a CI or any other individual receiving payment.

  2. Form 9835 will be filed in the control file for Confidential Informant.


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