This section contains guidance regarding the examination of books and records received via summons, the withdrawal of consent to use such records, limitations on summons authority and notice of third party contacts.

IRC 7602 provides the IRS with summons authority. See IRM 5.17.6.1.2.1, Statutory Authority.

IRC 7609 provides the IRS with special procedures for third party summonses.

Delegation Order 25-1, provides the levels of authority delegated to various IRS employees to approve and perform activities concerning summonses. See IRM 1.2.2, Servicewide Delegations of Authority.

Paragraph (9) in Delegation Order 25-1, provides the levels of authority delegated to various IRS employees to approve and perform activities concerning summonses. See IRM 1.2.2, Servicewide Delegation Orders.

In general, the IRS should issue summonses only when the information is not already in the IRS’s possession, and the taxpayer (or other witness) will not produce the desired records or other information voluntarily. A summons is specific to each case. There are no program reports that track summonses. Group Manager approval is required for third party summonses, providing case by case oversight. See IRM 1.2.2 Servicewide Delegation Orders.

The IRS employee who issued the summons keeps a copy of the original summons, Page 1 of the summons labeled “Original.” The original summons is needed when referring a summons for enforcement. See IRM 25.5.10, Enforcement of Summons.

The approval of the issuing officer’s manager, or any supervisory official above that level, is required on a summons to a third party witness, except that such approval is not required for a third party summons issued by a special agent. See paragraph (8) in Delegation Order 25-1. The approval is evidenced by the supervisor’s signature on the summons, or by a statement on the summons, signed by the issuing officer, that he or she had prior authorization to issue the summons and stating the name and title of the authorizing official and date of authorization.

Definitions pertaining to summonses served on third party witnesses can be found in IRM 25.5.6.3, Definitions. The table below lists commonly used acronyms and their definitions.

IRM 25.5, Summons, provides guidelines for all IRS functions in one multifunctional handbook. The sections are:

The basic legal concepts governing the use and enforcement of administrative summonses can be found in IRM 5.17.6, Legal Reference Guide for Revenue Officers, Summonses.

The Taxpayer Bill of Rights (TBOR) lists rights that already exist in the tax code, putting them in simple language and grouping them into 10 broad categories. Employees are responsible for being familiar with and acting in accordance with taxpayer rights, See IRC 7803(a)(3), Execution of Duties in Accord with Taxpayer Rights. For additional information about the TBOR, see https://www.irs.gov/taxpayer-bill-of-rights and Policy Statement 1-236 in IRM 1.2.1, Servicewide Policy Statements.

Additional summons guidance can be found on the Summons Knowledge Base, https://portal.ds.irsnet.gov/sites/vl053/pages/default.aspx

By issuing an administrative summons, the Service cannot force a taxpayer to create a document, including a Collection Information Statement or a delinquent tax return. However, if a summoned taxpayer is willing to do so, collection personnel are authorized to:

A summons may not be used in aid of a grand jury investigation but may be used in an administrative investigation.

Consult Associate Area Counsel for alternatives if serving a summons is not feasible.

As required by IRC 7602(a)(2), all summoned information must be of a type that "may be relevant or material" to the Service's investigation.

The "may be relevant" standard of section 7602 means any information that "might shed light" on the correctness of the taxpayer's return (or any other proper issue in a legitimate investigation, such as the location of collectible assets). The word "might" in this standard means that the Service has a realistic expectation, rather than an idle hope, that something useful may be discovered.

It is important to note that when seeking records of a third party, the standard of relevancy is slightly higher. The Service must show a transactional connection between the third-party's records and the taxpayer's activities that are being investigated.

Books and records sought by the summons must be of a type that may be relevant to the tax investigation and must be described with reasonable detail in the summons, including the periods relating to the investigation. Clearly explain the relevance of records requested for periods outside of the investigation time frame. This explanation should appear in the agent's declaration.

The statute does not require the Service to show probable cause to suspect fraud. Where a summons has been served covering a closed year, the government need only show that the summons meets the requirements for validity described above in IRM 25.5.4.5, Limitations on Authority to Summon. However, if the taxpayer’s books of account have already been inspected, and the Service has determined that a second inspection is necessary, the Service must give notice under IRC 7605(b) as discussed below in IRM 25.5.4.5.3, Statutory Restrictions on Unnecessary Examinations.

A taxpayer seeking to prevent enforcement of a summons because it covers closed years has the burden of showing it would be an abuse of court process. The taxpayer does not satisfy that burden by merely showing the statute of limitations has run out or the records have already been examined.

IRC 7605(b) provides that no taxpayer shall be subjected to unnecessary examinations or investigations of his or her tax liability and that only one inspection shall be made of a taxpayer’s books of account for each taxable year except upon notice from the Commissioner or upon the taxpayer’s request.

Review IRM 1.2.2.5.7, Delegation Order 4-7, Notice of Additional Inspection of Books of Account, to determine who can sign the notice to the taxpayer stating an additional inspection is necessary.

The taxpayer may refuse access to his or her records until he or she has been given notice in writing.

The limitations imposed by IRC 7605(b) apply only to the taxpayer under investigation and not to a third party.

The facts of each investigation will determine whether enforcement of a summons to examine records will be prohibited as unnecessary. While the Service can summon persons having information or documents that may be relevant to the investigation, the Service should never issue a summons to pursue a "fishing expedition" for information unrelated to the taxpayer’s liability. Such a summons will not meet the requirements of United States v. Powell, 379 U.S. 48 (1964).

Once an examination is open, the examination continues until the Area closes the investigation. Therefore, a subsequent review of the taxpayer's books and records is not considered a second examination when performed pursuant to a continuing investigation.

No summons may be issued nor summons litigation commenced if a DOJ referral is in effect with respect to the taxpayer pursuant to IRC 7602(d). A DOJ referral is in effect if:

A DOJ referral ceases to exist when the Attorney General notifies the Service, in writing, that:

A DOJ referral remains in effect until it is terminated in accordance with the preceding section. Summonses may not be issued to obtain information in response to a DOJ request for supplemental investigation. Consult Associate Area Counsel before serving a summons where CI and Associate Area Counsel are considering whether the case should be resubmitted to DOJ under protest procedures.

Treat each taxable period (or, in the instance of excise taxes, each taxable event) separately. The Service may issue a summons for one taxable year even if a DOJ referral is in effect for another taxable year. Consult Associate Area Counsel before issuing a summons if any tax year or event has a current DOJ referral in effect.

If CI decides to refer a recommendation of criminal prosecution or grand jury investigation to DOJ, seek the advice of Associate Area Counsel about issuing or seeking enforcement of any additional summonses.

The IRS must meet the procedural requirements of IRC 7609 when summoning a third party to produce a taxpayer’s records or to give testimony. All parties not exempt from notice per IRC 7609(c)(2) must be given no less than 23 full days after the date notice is given to file a petition to quash the summons. Therefore, set the appearance date no earlier than the 24th day after giving notice. These requirements are discussed in detail in IRM 25.5.6, Summonses on Third-Party Witnesses.

The Fair Credit Reporting Act (FCRA) restricts the means by which the Service can obtain a taxpayer’s credit report from a consumer reporting agency. The Service must not try to obtain a credit report by informal means. Where the Service has an assessment lien against the taxpayer, has reduced a taxpayer's liability to judgment, or has entered into an offer in compromise or settlement agreement with the taxpayer (i.e. the credit report is used to collect an assessed tax), the Service can obtain a full credit report pursuant to 31 USC 3711(h)(2) without issuing a summons.

The Service must serve an IRC 7609 third-party summons on the consumer reporting agency when the purpose of the summons is not to assist in collecting an assessed tax. The consumer reporting agency must produce the summoned materials unless a noticee files a timely petition to quash. It is not necessary for the Service to obtain a district court order enforcing the summons before the consumer reporting agency is allowed to produce the summoned documents. The consumer reporting agency may rely on the Service’s certificate stating that the consumer has not filed a timely petition to quash. This certificate is found on the reverse of the summons form and is titled "Service of Summons, Notice and Recordkeeper Certificates."

The Fair Credit Reporting Act allows a consumer reporting agency to provide government agencies with a consumer’s name, address, former addresses, places of employment, or former places of employment. The Service can obtain this information without issuing a summons. As indicated above, the Service can also obtain a credit report without a summons if the sole purpose of securing the report is to collect an assessed tax.

See IRM 4.10.20 , Requesting Audit, Tax Accrual, or Tax Reconciliation Workpapers, for detailed procedures for requesting audit, tax accrual, or tax reconciliation workpapers.

The Tax Court has established a framework for determining when it is appropriate to prevent summoned information from being entered into evidence if the Service's use of a summons conflicts with the court's interest in administering its discovery rules.

If a summons is issued after a Tax Court petition is filed and that summons pertains to the same taxpayers and same taxable years as those before the court, the court will exercise its supervisory power and exclude the information, unless the Service can show the summons was issued for sufficient reason, independent of that litigation. If the post-petition summons pertains to different taxpayers or different taxable years as those before the court, the court will not normally exercise its supervisory power unless the taxpayer can show a lack of an independent and sufficient reason for the summons.

In all but extraordinarily rare cases, the Service must not issue a summons after a Statutory Notice of Deficiency (SND) is mailed to the taxpayer to continue the investigation of the same taxable periods and liabilities covered by the SND. After an SND is mailed, the Service should no longer be in the process of gathering the data to support a determination because the SND represents the Service's presumptively correct determination and indicates the examination has been concluded. If the Service issues a summons after mailing the SND, this could be perceived as an effort to circumvent the Tax Court's discovery processes, which might lead the court to exclude the summoned evidence.

During an investigation, the Service may need access to books and records outside the United States, such as a taxpayer's foreign bank account records. Foreign entities or individuals may refuse to release the records without the taxpayer's consent, which he or she can give by signing a consent directive. A consent directive, sometimes known as a disclosure directive, is a document signed by a taxpayer that authorizes and directs a specific foreign person (a bank, trustee, or other entity or individual) who possesses documents belonging to or controlled by the taxpayer, to disclose those documents to the IRS.

In some cases, a consent directive can be obtained voluntarily from the taxpayer. When a consent directive is obtained voluntarily, some foreign countries will view this favorably and will allow compliance with the consent directive.

A summons cannot be used to directly compel a taxpayer to sign a consent directive. However, if a summons for the foreign records is served on the taxpayer while in the United States, a federal district court can enforce the summons by directly ordering the taxpayer to produce the documents in his or her custody or control. Moreover, the Service can seek an order under IRC 7402(b) compelling a taxpayer to sign a consent directive authorizing the foreign institution to produce its records. Some countries may not honor a consent directive that was compelled by court order.

Consult with Area Counsel prior to considering a Consent Directive. Area Counsel will coordinate as necessary with the Office of Associate Chief Counsel (International). See Chief Counsel Directives Manual 34.6.3.7, Issuance of Summons for Books and Records Abroad, for guidance. Any summons drafted for this purpose must receive pre-issuance review by the appropriate Associate Area Counsel office.