- 25.5.5 Summons for Taxpayer Records and Testimony
- 188.8.131.52 Overview
- 184.108.40.206 Taxpayer Records and Testimony
- 220.127.116.11.1 Fees and Costs for Witnesses
- 18.104.22.168 Taxpayer Records In Possession of Others
- 22.214.171.124 Rights and Privileges of Person Summoned
- 126.96.36.199.1 Fifth Amendment Privilege Against Self Incrimination
- 188.8.131.52.1.1 Rights Concerning Partnership and Other Unincorporated Association Books and Records
- 184.108.40.206.1.2 Rights Concerning Corporate Books and Records
- 220.127.116.11.1.2.1 Rights of Corporate Officers
- 18.104.22.168.2 Right to Be Represented by Counsel
- 22.214.171.124.3 Privileged Communication and Summons
- 126.96.36.199.4 Right to Make an Audio Recording of the Proceeding
- 188.8.131.52.5 Right to Petition to Quash a Third-Party Summons
- 184.108.40.206.6 Rights of Third-Party Witnesses to Refuse Unreasonable Requests and Raise Valid Defenses
- 220.127.116.11.7 Noncompliance by the Witness or a Representative
- 18.104.22.168.8 Disclosure Issues
- 22.214.171.124 Dual Representation
- 126.96.36.199.1 Interviewing the Witness
- 188.8.131.52.2 Obstruction of Interview
- 184.108.40.206.3 Suspension of Interview
- 220.127.116.11.4 Procedures for Exclusion of Attorney Prior to Interview of Witness
- 18.104.22.168.5 Excluding a Taxpayer or a Taxpayer's Representative From the Interview of a Summoned Third Party
- 22.214.171.124.6 Excluding an Interested Party or that Party's Representative From the Interview of a Summoned Third Party
- 126.96.36.199.7 Third-Party Witness's Choice of Representative
- Exhibit 25.5.5-1 Access Request by Internal Revenue Service
- Exhibit 25.5.5-2 Reply Letter Granting Access to Internal Revenue Service
Part 25. Special Topics
Chapter 5. Summons
Section 5. Summons for Taxpayer Records and Testimony
December 18, 2015
(1) This transmits a revision to IRM 25.5.5, Summons Handbook, Summons for Taxpayer Records and Testimony.
(1) IRM 188.8.131.52.1(1) moved reference to IRM 184.108.40.206 into new paragraph (2).
(2) IRM 220.127.116.11(2) added reference to IRM 18.104.22.168 for requesting records on a foreign entity or when requesting foreign documents.
(3) IRM 22.214.171.124(3) added clarification that records relating to defunct entities can be summoned.
(4) IRM 126.96.36.199 added Psychotherapist-Patient as another group that may assert certain rights or defenses.
(5) IRM 188.8.131.52.1 added new paragraph to explain a waiver of privilege occurs when a witness responds that they have the documents requested in the summons.
(6) IRM 184.108.40.206.1 renumbered paragraph (6) from 220.127.116.11(5)
(7) IRM 18.104.22.168.2(1) added clarification that witness should be informed of the right to be represented by attorney and created paragraphs (2) and (3) by moving paragraphs 6 and 7 from IRM 22.214.171.124.7 to this section.
(8) IRM 126.96.36.199.3(2) added situation when a privilege is raised in response to a summons and removed reference to IRM 188.8.131.52.
(9) IRM 184.108.40.206.4 corrected references to IRM 4.10.3, Requests to Audio Record Interviews and IRM 220.127.116.11, Taxpayer Recording of Interviews.
(10) IRM 18.104.22.168.7 moved paragraphs 6 and 7 to IRM 22.214.171.124.2.
(11) IRM 126.96.36.199.8(1) and in Note, clarified situation when a third party is permitted to bring other persons to the summons interview.
(12) IRM 188.8.131.52.8(2) added references to IRM 11.3.3 and IRM 25.5.11.
(13) IRM 184.108.40.206.8 added new paragraph (5) to refer to IRM 220.127.116.11 when requesting records from government entities.
(14) IRM 18.104.22.168.9 deleted section since it has nothing to do with summonses.
(15) IRM 22.214.171.124(2)(c) clarified that practitioner may represent clients having conflicting interests if each affected client waives the conflict of interest at the time the practitioner learns of the conflict.
(16) IRM 126.96.36.199(3)(Note) added reference to IRM 188.8.131.52(5).
(17) IRM 184.108.40.206 added paragraph (6) to refer to IRM 220.127.116.11.4 if a taxpayer/attorney who is the target of the interview represents a third-party witness.
(18) IRM 18.104.22.168.1(2) removed question (e) and changed question (d) to ask the witness about a potential conflict of interest.
(19) IRM 22.214.171.124.1(1) added clarification to discuss conflict of interest with the attorney without the witness present.
(20) IRM 126.96.36.199.3(4)(Note) added reference to IRM 188.8.131.52.4.
(21) The revision to this IRM section includes editorial changes, formatting, and IRM reference corrections throughout.
Kristen E. Bailey
Director, Collection Policy
This section contains the following topics:
Taxpayer Records and Testimony
Taxpayer Records in Possession of Others
Rights and Privileges of Persons Summoned
Taxpayer testimony may be summoned. Taxpayer records may be summoned whether they are in the possession of the taxpayer or in the possession of others, including third-party recordkeepers.
Information or evidence furnished voluntarily by a person may be used even if it is incriminating.
Witness fees and travel expenses are payable upon request to witnesses who are required to appear to give testimony or produce records with respect to any summons authorized under IRC 6420(e)(2), 6421(g)(2), 6427(j)(2), or 7602.
Use the procedures at IRM 184.108.40.206, Claims for Witness Fees and Travel Expenses,, to request payment when a witness requests reimbursement for expenses incurred for travel.
Taxpayer records may be in the possession of other individuals or entities. In general, the records may be obtained by summons, whether the records have been voluntarily or involuntarily turned over to others.
See IRM 220.127.116.11, Record of Foreign Companies, if the examiner needs records on a foreign entity or when requesting foreign documents.
Examiners may summons records relating to defunct entities.
A person cannot successfully oppose a summons for records possessed by another person when the other person obtained the records either by operation and due process of law or by the legal actions of another. For example, courts have ordered production of documents from:
A trustee in bankruptcy;
A federal court where they had been impounded;
A state attorney general who obtained records by subpoena;
An employer who came across incriminating documents at the workstation of an employee/embezzler;
A clerk of a state court;
A federal prison official; and
U.S. Customs agents.
Refer to IRM 18.104.22.168.1 (2)-(3), Fifth Amendment Privilege Against Self Incrimination, and the accompanying note for a discussion of records shielded from production by a combination of the Fifth Amendment and the attorney-client (or IRC 7525 confidentiality) privileges when given to an attorney (or an IRC 7525 Federally Authorized Tax Practitioner) to obtain legal advice.
Persons summoned to testify before the Service or to produce records may assert certain rights or defenses including the following:
Fifth Amendment Privilege Against Self Incrimination
Right to Be Represented by Counsel
Attorney-Client, Federally Authorized Tax Practitioner-Taxpayer, Husband-Wife, Clergy-Penitent, and Psychotherapist-Patient Privileges
Right to Make an Audio Recording of the Proceeding
IRC 7609 Noticee's Right to Petition to Quash a Third-Party Summons
Right of Third-Party Witness to Refuse Unreasonable Requests and to Raise Appropriate Defenses
The Fifth Amendment to the Constitution provides no person shall be compelled to be a witness against himself. However, information or evidence furnished voluntarily by an individual taxpayer or witness who has been summoned may be used even though it may be incriminating.
IRC 7602 authorizes the Service to summon taxpayers and third parties to testify and to produce books and records. However, if answering a question would tend to incriminate the summoned person, that person may assert his or her Fifth Amendment privilege and refuse to answer. In contrast, a summoned person has no Fifth Amendment privilege in the contents of voluntarily created, pre-existing documents because the Government did not compel that person to create the documents. However, the act of producing those documents may tend to incriminate a summoned person because the mere act of production compels that person to tacitly admit that the documents exist, they are in that person’s possession, and he or she believes the documents produced are those required by the summons. Whether any of these tacit admissions may tend to incriminate a summoned person will depend on the facts and circumstances of each case. Consequently, that person may have a valid Fifth Amendment privilege against producing voluntarily created, pre-existing documents. This situation may exist when a taxpayer (or other person) is summoned to produce the records of his or her sole proprietorship.
If a taxpayer transfers the records of his or her sole proprietorship to another person, the Service can summon the third party to produce those records. The taxpayer cannot raise a Fifth Amendment objection to prevent a summoned third party from producing these records because the privilege against self-incrimination is personal to the taxpayer, i.e., it extends only to testimony and records sought from the taxpayer. This is true even though the taxpayer could have successfully avoided producing the records pursuant to a Fifth Amendment objection when they were in his or her possession. However, a significant exception to this rule exists when the taxpayer transfers the records of his or her sole proprietorship to an attorney to obtain legal advice. If, under these circumstances, the taxpayer could have avoided producing these records while they were in his or her possession, the attorney-client privilege will prevent the Service from summoning the records from the attorney so long as the taxpayer transferred the records to obtain legal advice.
While a warning of constitutional privilege against self-incrimination (e.g., "You have the right to not answer questions that may incriminate you." ) may not be required as a matter of law, such warning may have substantial significance from an evidentiary standpoint in overcoming a contention the testimony or information was given involuntarily, under compulsion. A witness who contends the testimony or information was given involuntarily has the burden of sustaining that contention.
If a summoned person admits that they have the documents requested by the summons, they have waived the Fifth Amendment privilege against self-incrimination and cannot refuse to provide the documents.
Summonsing a taxpayer or other witness to take a handwriting exemplar is within the authority of IRC 7602 . This does not violate any constitutional rights or policies enunciated by Congress. Compulsion of handwriting exemplars is neither a search nor a seizure subject to Fourth Amendment protections, nor testimonial evidence protected by the Fifth Amendment privilege against self-incrimination. A handwriting exemplar is an identifying physical characteristic.
The Supreme Court has ruled an individual cannot rely upon the privilege against self-incrimination to avoid producing the records of a collective entity that are in his or her possession, even if these records might incriminate him or her personally. Partnership books and records are not the personal property of an individual; they are the collective property of a group of persons.
Partnership books and records voluntarily submitted by one partner may be used in evidence against the other partners without violating their constitutional rights.
A trustee can be directed to comply with a summons which calls for the production of certain books and records of the trust. Since the trust is a separate entity, the trustee can not claim the Fifth Amendment privilege. The books were held in a representative rather than a personal capacity.
The privilege against self-incrimination under the Fifth Amendment does not apply to corporations. The theory for this is the State, having created the corporation, has reserved the power to inquire into its activities, and an inanimate corporate body should not be afforded the same protection as a natural person in avoiding incrimination. A corporate officer may not refuse to produce corporate records held by him or her in an official capacity, even though their production may incriminate him or her or the corporation.
The mere fact a corporate officer may not refuse to produce corporate records does not take away the constitutional protection against self-incrimination which is the right of any individual. The corporate officer may still refuse to give testimony or exhibit personal records which may tend to incriminate him or her as an individual, or to testify regarding the whereabouts of corporate records not in his or her possession. Also, the corporate officer’s act of production may not be used against him or her in court.
A witness who appears in response to a summons must be afforded the opportunity to be represented by an attorney. The witness should be informed of this right. However, the witness' counsel should not be permitted to control, attempt to interfere, or delay the progress of the interview.
If a summoned taxpayer appears and wishes to suspend the interview to consult with an authorized representative, continue with the interview. Inform the taxpayer an interview may usually be suspended for that purpose, but not when it is required by an administrative summons. IRC 7521(b)(2), Procedures involving taxpayer interviews.
If a witness has been summoned to appear for more than one day (see the Notes at IRM Exhibit 25.5.2–1(10) - (11), General Instructions for Preparation of a Summons) and the witness indicates (for good reason) he cannot appear on one or more of the continuing dates, do not release the witness from the obligation to appear on those days unless that person agrees in writing to appear on other mutually agreeable dates, identified by hour, month, day, and year in the written statement.
There are certain special types of relationships in which information communicated by one person to the other is held confidential and privileged between them. This privilege may exist between:
Attorney and Client
In general, the communications from a taxpayer to an attorney that are made to secure legal advice are privileged, and the attorney cannot be compelled to disclose that information to the Service. Also, if the taxpayer creates records to facilitate the exchange of privileged communications with the attorney, those records are privileged. However, if a taxpayer turns over pre-existing records to an attorney, the Service can obtain those records, unless they were otherwise privileged from production while in the taxpayer’s possession.
Federally Authorized Tax Practitioner and Taxpayer
RRA 98 created a new confidentiality privilege in IRC 7525 for communications between taxpayers and "any federally authorized tax practitioner" concerning "tax advice." "Federally authorized tax practitioners" are the persons described in Circular 230 as subject to regulation. "Tax advice" means any advice given "with respect to a matter which is within the scope of the individual’s authority to practice." The new privilege may be asserted both in "any noncriminal tax matter before the Internal Revenue Service" and in "any noncriminal tax proceeding in Federal court with respect to such matter." It may be asserted "to the extent the communication would be considered a privileged communication if it were between a taxpayer and an attorney," except for written communications made "in connection with the promotion of the direct or indirect participation of the person in any tax shelter."
The new privilege does not arise automatically but must be asserted by the taxpayer. Service employees may still seek the same information in the same manner as before. The only difference is taxpayers may now assert, in noncriminal proceedings, a confidentiality privilege for communications made after the date of enactment to "federally authorized tax practitioners" concerning "tax advice" sought or received. When questions of statutory interpretation arise, consult Associate Area Counsel.
Husband and Wife
Clergyman and Penitent
Privileged communications cannot be obtained by issuing a summons. If the Service anticipates the summoned person may raise any privilege or if a privilege is raised in response to a summons, the Service should ask for a privilege log to support the claim. The request for a privilege log may be made in the summons, but it can only be "requested" because a summons cannot require a person to create a new document. Associate Area Counsel should be contacted for assistance with a privilege log.
Taxpayers or their representatives may ask to make audio-tape recordings of the proceedings. If the taxpayer requests to tape record the interview, the taxpayer must give 10 days advance notice and the recording must be at the taxpayer's expense and with the taxpayer's own equipment. The Service employee must also record the meeting. Cameras or videotape equipment are not permitted. At no time should employees try to physically confiscate this equipment. Follow the requirements of IRC 7521 and the procedures set forth in IRM 4.10.3., Requests to Audio Record Interviews, and IRM 22.214.171.124, Taxpayer Recording of Interviews, concerning audio-taped interviews.
See IRM 126.96.36.199.2, Right to File Petition to Quash Summons, of this Summons Handbook.
Third-party witnesses are protected against summonses that are overbroad and fail to satisfy the relevancy test in IRC 7602(a). Refer to IRM 188.8.131.52.1, Relevancy and Materiality of Summoned Information.
Third-party witnesses may assert all valid rights and privileges, including the Fifth Amendment privilege against self-incrimination, the right to be represented by counsel, the spousal privilege, and the attorney-client privilege.
When a summoned witness or the witness’ representative indicates the witness will not comply with the summons:
Do not make any indication or agreement, express or implied, that it is not necessary or required for the witness to appear, and
Inform the witness or representative refusal or failure to comply with the summons may result in judicial remedies provided by law. If a valid reason exists, such as an illness, reschedule the date by mutual agreement to another fixed date.
The witness’ representative cannot appear instead of the witness on the appearance date set in the summons.
Continue with the interview when a summoned taxpayer or witness claims either the self-incrimination privilege of the Fifth Amendment, the attorney-client privilege, or the confidential communications privilege under IRC 7525 even though it is clear the questions will not be answered. Have the summoned taxpayer claim the privilege for each question.
If the summoned person refuses to submit to questioning and to the request for documents, that person cannot be compelled to remain and continue the interview.
Prepare a memorandum describing the facts and occurrences during the interview. Include the questions asked and the responses given.
In addition to an attorney, a summoned party, whether the taxpayer or a third party, is permitted to have other persons present during the interview. Written authorization from the taxpayer is required for consenting to or requesting such disclosure if the summoned party is not the taxpayer. If the summoned party is the taxpayer, consent for disclosure to persons being present during the interview may be provided in writing or orally pursuant to the requirements in Treasury Regulation 301.6103(c)-1(c).
If a third party witness appears pursuant to a summons accompanied by a person (other than the taxpayer) who does not represent the individual witness, such person may be excluded from the interview. An example of a situation in which a person may be excluded from the interview is where a corporate official (witness) is summoned in his/her individual capacity regarding an examination of the corporation, and an attorney representing the corporation, who does not also represent the witness, attempts to attend the interview. However, if the witness requests to have that person present and the person is a designee of the taxpayer within the meaning of IRC 6103(c) and its regulations, the interview will proceed. See IRM 11.3.3 , Disclosure to Designees and Practitioners. If the person accompanying the witness is not a designee of the taxpayer within the meaning of IRC 6103(c) and the witness refuses to be interviewed if that person is excluded, the interviewing officer will terminate the interview. If the interview is terminated, request a recommendation from Associate Area Counsel for judicial enforcement of the summons by the Department of Justice and exclusion of the person from any future interviews pursuant to the court’s order.
Information obtained as a result of a summons issued in a tax administration investigation or examination is considered return information subject to the disclosure provisions of IRC 6103 and related regulations, and IRC 7213, 7213A, and 7431. See IRM 11.3.3 , Disclosure to Designees and Practitioners. Information obtained in a "pure" money laundering or Bank Secrecy Act investigation or examination does not fall within the above-listed disclosure provisions. See IRM 25.5.11, Title 31 Bank Secrecy Act Investigations.
Make no commitments to the taxpayer or third-party witness to:
Provide a greater degree of confidentiality or limitation of use than is provided by existing law and regulation;
Limit the disclosure of information, such as agreeing information will not be turned over to other agencies otherwise entitled to disclosure of the information upon proper request, or
Impose other conditions regarding the acceptance and use of information by the IRS, such as agreeing to use tax data for civil purposes only.
Take precautions to ensure no violations of law concerning the disclosure of return information occurs.
Refer to IRM 184.108.40.206, Information From Federal Officials and Employees, for a discussion on requesting records from government agencies.
In investigations in which it is appropriate to seek access to non-public files of the Securities and Exchange Commission (SEC), the Service may request such information by using the form letter at Exhibit 25.5.5-1, Access Request by Internal Revenue Service. If the SEC approves the request, it will reply using the form letter at Exhibit 25.5.5-2, Reply Letter Granting Access to Internal Revenue Service. Service employees are permitted to agree to the conditions set forth in the form letter.
Treasury Department Circular 230 (Regulations Governing Practice before the Internal Revenue Service) (Rev. 6–2014) provides the following with respect to dual representation:
Section 10.29 Conflicting interests. "(a) Except as provided by paragraph (b) of this section, a practitioner shall not represent a client before the Internal Revenue Service if the representation involves a conflict of interest."
Paragraph (b) of Section 10.29 provides for an exception to the general prohibition against conflict of interest. A practitioner may represent clients having conflicting interests if:
The practitioner reasonably believes that the practitioner will be able to provide "competent and diligent representation" to each affected client;
The representation is not prohibited by law; and
Each affected client waives the conflict of interest and gives informed consent at the time the practitioner learns of the conflict. The client's informed consent must be confirmed in writing no later than 30 days after the clients gave their consent.
Dual representation exists when a summoned third-party witness is represented by an attorney, certified public accountant, enrolled agent, or other person who also represents the taxpayer or another interested party. It may also occur when an attorney under investigation represents a third-party witness in that investigation, or when an attorney-witness seeks to represent another witness in the same investigation. An interested party is one who has a significant pecuniary interest in the testimony of the witness or who, by virtue of the nature of the investigation and the known facts, may be incriminated by the witness. When dual representation exists, notify the Group Manager, and consult Associate Area Counsel, if necessary, to determine the appropriate course of action.
Except as provided below, the mere existence of a dual representation situation which may potentially have an adverse impact on the investigation will not, without some action by the attorney to impede or obstruct the investigation, provide a sufficient basis for seeking a disqualification. However, where an attorney’s representation has substantially prejudiced the questioning of a third-party witness and, as a result, has significantly impaired the progress of the investigation, the Service will request the Department of Justice to seek a court order, as part of the summons enforcement proceeding, to disqualify that attorney as counsel for that witness.
In view of the well-established principle granting a person the right to counsel of one’s choice, this disqualification procedure will only be used in extreme circumstances, such as where an attorney has taken some action to improperly or unlawfully impede or obstruct the investigation. It is essential the interviewing officer have sufficient facts to support such allegations.
If the taxpayer-attorney who is the target of the interview represents a third party witness in an interview, refer to IRM 220.127.116.11.4, Procedures for Exclusion of Attorney Prior to Interview of Witness.
The provisions referring to "attorneys" apply to other representatives (non-attorneys) who represent witnesses or taxpayers.
Upon learning counsel represents both the taxpayer under investigation (or other interested party) and the summoned witness, the interviewing officer should give consideration to exploring with the attorney, prior to the interview of the witness, whether the attorney realizes his representation of both the subject of the investigation and the witness may be a conflict of interest. This should be done without the witness present.
If, after discussing the potential conflict of interest with the attorney, the question is not resolved, the interviewing officer should ask the witness these questions at the beginning of the interview:
Do you wish the attorney to be present during the questioning?
Did you hire the attorney for this purpose?
Are you paying for the attorney’s services, either alone or in conjunction with someone else? If the latter, do you know who?
Do you know about a potential conflict of interest regarding the attorney representing the taxpayer or other third-party witnesses?
In those instances where the interviewing officer becomes aware of the potential conflict of interest during the interview, he/she should explore the issue by asking the questions listed. In some situations it may be appropriate for the interviewing officer to tell the witness that in the view of the Service, the interest of the taxpayer under investigation conflicts with that of the witness.
After disclosure of the dual or multiple representation has been made, if the witness unequivocally states he/she wishes the attorney in question to represent him/her and he/she is utilizing the services of the attorney in this matter, then the interview should proceed.
However, if the witness states he/she does not wish to retain that attorney because of the possible conflict of interest, then the witness should be given the opportunity of either proceeding with the interview without an attorney present, or adjourning the interview to a specific future date that affords the witness a reasonable amount of time to hire another attorney. The witness should be advised his/her failure to comply with the summons may result in the initiation of a summons enforcement recommendation to the Department of Justice.
If the interviewing officer has reason to anticipate an attorney will improperly impede or obstruct the questioning of a witness, he/she should consult with Associate Area Counsel prior to the interview with respect to the manner of conducting the questioning.
Speculation that the objective of the investigation might be frustrated is insufficient grounds upon which to seek disqualification of an attorney. The fact the attorney for the summoned witness also represents the taxpayer (or other interested party) does not provide a basis for concluding the presence of such attorney would obstruct the investigation.
Thus, the mere potential for obstruction is generally an insufficient basis to justify a recommendation for disqualification of an attorney. There must be active obstruction by an attorney before disqualification will be sought. A suit to disqualify an attorney for obstruction will be undertaken only where the facts clearly indicate he/she has actively impeded the investigation.
Unjustifiable obstruction by an attorney may take a variety of forms. It is, therefore, impossible to set forth the precise factual circumstances under which the Government would ask a court to disqualify an attorney as counsel for a third-party witness.
The following is an example of a circumstance which may provide the basis for a recommendation for the institution of litigation to seek the disqualification of an attorney:
Taxpayer and third-party witness are both represented by the same attorney. The witness is summoned to testify. The attorney refuses to permit the witness to answer questions for other than legitimate reasons, or disrupts the questioning by repeatedly making frivolous objections to the questions, or asserts frivolous claims of privilege or defenses on behalf of the witness to delay the investigation, or so disrupts the interview that the interviewing officer, with due diligence and perseverance, is unable to proceed with the interview. This is not intended to suggest that there is anything inherently wrong in claiming the Fifth Amendment privilege.
A careful distinction must be drawn between situations in which the proper remedy is to compel the witness to answer and those in which the attorney may be disqualified because of this conduct. The latter is an extreme remedy which will only be sought in very unusual circumstances, as courts are reluctant to deprive a person of his/her choice of attorney. Associate Area Counsel, therefore, will make a considered determination on a case-by-case basis prior to seeking disqualification of an attorney.
If the interview is suspended because of the attorney’s actions, the witness should be given the opportunity to hire another attorney within a reasonable period of time or proceed without an attorney. If the witness declines either to proceed without an attorney or retain a new one within a reasonable period of time, the witness should be informed that a summons enforcement proceeding and an action to disqualify the attorney will be recommended.
After suspending an interview, the interviewing officer will consult with his/her manager. If the manager agrees with the interviewing officer’s view that the facts are appropriate for litigation, a request will be made to Associate Area Counsel that they recommend to the Department of Justice that it seek summons enforcement and disqualification of the attorney.
Suspension of an interview should be made judiciously in view of the time delays in the investigation that may be caused by such action.
A record should be made of the circumstances in each instance where an interview is suspended because of dual representation or obstruction by an attorney. The interviewing officer should also have a verbatim transcript of the interview (if possible) so that the factual allegations concerning the attorney’s conduct at the interview may be proven.
Where an individual taxpayer under investigation attempts to appear with a summoned witness as the witness’ attorney, the witness should be told that the taxpayer-attorney is the person under investigation and that he/she will not be allowed to be present during the questioning. The witness should be given the opportunity of either proceeding with the interview without the taxpayer present or to adjourn the interview to a specific future date in order to afford the witness an opportunity to secure the services of another attorney. If the witness refuses to either proceed with the interview without the attorney’s representations or to adjourn for the purpose of obtaining a new representative, the interview will be terminated and a request will be made to Associate Area Counsel for judicial enforcement of the summons and exclusion of the taxpayer from representing the witness.
A witness may appear pursuant to a summons accompanied by an attorney who also represents the taxpayer (or other interested party) where the taxpayer (or other interested party) has already made exculpatory statements to the Service alleging that the witness was criminally responsible for circumstances to be discussed during the interview. In this instance, the witness will be told that the attorney also represents the taxpayer (or other interested party) and that the agent believes that an irreconcilable conflict of interest exists which could prejudice the investigation. The witness should then be given the opportunity of either proceeding with the interview without the attorney present or adjourning the interview to secure the services of another attorney. If the witness insists upon retaining the same attorney despite the assertion of a conflict of interest, the interviewing officer will terminate the interview and a request will be made to Associate Area Counsel for judicial enforcement of the summons and exclusion of the attorney.
Refer to IRM 18.104.22.168.8, Disclosure Issues, in this handbook for a discussion of other situations involving the exclusion of other persons from an interview.
Except as noted below in IRM 22.214.171.124.7, Third-Party Witness's Choice of Representative, neither the taxpayer under investigation nor his or her representative has a legal right to be present at the summons interview of a third-party witness, even where a privileged relationship may exist between the taxpayer and the third-party witness. Therefore, the Service may bar those persons from the interview. The only rights a taxpayer and the representative have regarding a third-party summons are to petition to quash the summons under IRC 7609(b)(2) and to intervene in a summons enforcement suit pursuant to IRC 7609(b)(1). Any objections to the summoned information or claims of privilege should be raised in those proceedings.
Where a third-party witness has a fiduciary responsibility or an ethical duty to the taxpayer to assert relevant privileges, such as the attorney-client privilege or tax practitioner privilege under IRC 7525, the Service is not obligated to permit the taxpayer or his counsel to attend the summoned third-party interview.
An individual who is not entitled to notice under IRC 7609(a) of a third-party summons does not have a right to be present at the interview of a summoned third-party witness; therefore, the Service may exclude the interested party as well as that party's representative from the interview.
Any witness, including a third-party witness, has the right to have counsel present at a summoned interview. 5 USC 555(b). The taxpayer has no right to be present himself or to have his counsel present during the questioning of a third-party witness. If a witness's counsel appears to represent persons with conflicting interests, refer to IRM 126.96.36.199, Dual Representation, and consult Associate Area Counsel. A summoned third party may choose to be represented by the taxpayer's attorney at the interview. In that case, consider whether there are dual representation problems and whether the attorney should be disqualified on conflict of interest grounds.
A summoned witness may choose to have observers present at the interview so long as (1) the observers are silent and do not participate in or disrupt the interview in any manner, (2) the taxpayer being investigated provides written consent allowing the disclosure of return information to all attending the interview, and (3) the disclosure of that return information would not seriously impair Federal tax administration.
|ACCESS REQUEST BY INTERNAL REVENUE SERVICE|
This form letter should be addressed to the Securities and Exchange Commission by the Internal Revenue Service when it is seeking access to non-public files, and should be signed or ratified by an official in a sufficiently senior or supervisory position to enforce the representations made. The form is intended only for use in connection with access requests to be processed by the Division of Enforcement.
Re: [Name of Taxpayer(s)]
Pursuant to Title 26, United States Code, we request access to the investigative and other non-public files of the U.S. Securities and Exchange Commission (the "Commission" ) related to the captioned matter. This request is made in connection with a lawful investigation or official proceeding inquiring into compliance with a criminal or civil statute or regulation being conducted by the Internal Revenue Service.
We understand that the files in this matter contain "financial records" of "customers," as those terms are defined in the Right to Financial Privacy Act of 1978 [12 USC. §§ 3401–22]. We have reason to believe that such information is relevant to our investigation and/or proceeding.1
We will only disclose information accessed from the Commission's files if the disclosure is authorized under 26 USC Section 6103. We will establish and maintain such safeguards as are necessary and appropriate under Section 6103 to protect the confidentiality the information.
We recognize that until this matter has been closed, the Commission continues to have an interest and will take further investigatory or other steps as it considers necessary in the discharge of its duties and responsibilities.2
Should you have any questions, please contact____________________________________.
1This paragraph is to be used only when the files are known to contain Right to Financial Privacy Act material.
2This paragraph may be omitted if the Commission's case is closed.
|REPLY LETTER GRANTING ACCESS TO INTERNAL REVENUE SERVICE|
Re: [Name of Case and Case Number]
Your request, by letter dated _______________, for access to Commission files has been granted. In granting access, the Commission has relied upon your assurances that (1) you will disclose information from files accessed only in accordance with 26 USC § 6103, and (2) you will establish and maintain such safeguards as are necessary and appropriate to protect the confidentiality of information from files accessed in accordance with 26 USC § 6103.
The files in this matter contain "financial records" of "customers" as those terms are defined in the Right to Financial Privacy Act of 1978 [12 USC. §§ 3401–22]. In addition to the assurances described above, we have relied upon your representation that you have reason to believe that such information is relevant to your investigation and/or proceeding.1
The Commission makes no recommendation with respect to investigation or prosecution by your agency. In addition, until this matter has been closed, the Commission continues to have an interest and will take further investigatory or other steps as it considers necessary in the discharge of its duties and responsibilities.2
The files to which access has been granted are being retained by the [name of office] of the Commission. Your representative should contact __________________ at [area code and telephone number] to make arrangements to review the files. I would also appreciate it if you would inform that person in the event that your agency institutes public proceedings based upon the information accessed.
Should you have any questions, please contact _________________________________.
1This paragraph is to be used only when the files are known to contain Right to Financial Privacy Act material.
2This sentence may be omitted if the Commission's case is closed.