Part38.

CriminalTax

Chapter1.AssistancetoCriminalInvestigationDuringInvestigatoryStage

Section1.PrereferralAssistance,VisitationsandInvestigativeTools

38.1.1PrereferralAssistance,VisitationsandInvestigativeTools

38.1.1.1PrereferralAssistance
38.1.1.2CriminalInvestigationGroupReviewsandVisitations
38.1.1.3SearchWarrantProcedures
38.1.1.4UndercoverAssistance
38.1.1.5ElectronicSurveillance
38.1.1.6Summonses

ManualTransmittal

June27,2013

Purpose

(1)ThistransmitsrevisedCCDM38.1.1,AssistancetoCriminalInvestigationDuringInvestigatoryStagePrereferralAssistance,VisitationsandInvestigativeTools.

MaterialChanges

(1)CCDM38.1.1hasbeeneditedthroughoutforconsistency,clarity,andgrammaticalcorrectness.Individualsectionshavebeenreordered,streamlined,andrenumberedas
appropriate.Changeshavebeenmadetohighlightandclarifythedifferentreviewpathsforsensitiveandnonsensitivesearchwarrants,aswellastheprocedureforfacilitating
coordinationwithotherAssociateofficesasneededthroughtheAssociateChiefCounsel(CT).

(2)CCDM38.1.1.3(1),38.1.1.3(5),and38.1.1.5.3.1havebeenupdatedtoreflecttheSupremeCourtsdecisioninUnitedStatesv.Jones,132S.Ct.945(2012)(holdingthatthe
governmentsinstallationofaGPStrackingdeviceonavehicle,anditsuseofthedevicetomonitorthevehiclesmovements,constituteasearchundertheFourthAmendment).
CCDM38.1.1.5.3.1hasalsobeenupdatedtoaccountfortechnologicaldevelopmentsintheareaofelectronictrackingdevices.

(3)CCDM38.1.1.3(6),38.1.1.3(8),38.1.1.3.2(4),and38.1.1.5.2.1havebeenupdatedtoreflectIRSPolicyStatement4120,whichwasissuedonMay3,2013andprovidesthat
theIRSwillobtainasearchwarrantinallcaseswhenseekingfromaninternetserviceprovider(ISP)thecontentofemailcommunicationsstoredbytheISP.Anewprovision,
CCDM38.1.1.5.2.2,hasbeenaddedtostatethepolicyinfullandtoclarifythat,whenreviewingsearchwarrantsseekinganyformofstoredcommunication,CriminalTaxattorneys
willfollowexistingprocedures.

(4)CCDM38.1.1.3.2.2hasbeenrevisedtoclarifythatthefieldCriminalTaxattorneymustdraftamemorandumdiscussingthemeritsofasensitivesearchwarrantpriortothe
reviewthatisconductedbytheofficeofAssociateChiefCounsel(CT).

(5)ThechecklistforreviewingaffidavitsandsearchwarrantsinCCDM38.1.1.3.4hasbeenexpandedtoincludesuchissuesascomputersearches,useofataintteam,andthe
treatmentofattachmentstotheaffidavit.

(6)HyperlinkstoCCDMandIRMreferencesandotherresourceswereaddedthroughoutthesection.

EffectonOtherDocuments

CCDM38.1.1,datedAugust7,2008,issuperseded.

Audience

ChiefCounsel

EffectiveDate

(06272013)

EdwardF.Cronin
DivisionCounsel/AssociateChiefCounsel
(CriminalTax)

38.1.1.1(06272013)
PrereferralAssistance

1.CriminalTaxattorneyswillbeavailable,uponrequest,atanystageofaninvestigationfordiscussionswithCriminalInvestigationpersonnelforthepurposeofrendering
legaladvice.Prereferrallegalassistanceissolelyadvisoryinnatureanditspurposeistoprovideguidanceregardinglegalissuesthatsurfaceduringaninvestigation.

2.Prereferraladvicewillgenerallybeprovidedinthesameformastherequest:iftherequestisoral,theresponsemaybeoraliftherequestisinwriting,theresponsewillbe
inwriting.Ifanoralresponseisprovided,afollowupmemorandumtothefilewillbeprepared.

3.Ifawrittenresponseisprepared,acopyofthewrittenresponsewillbeforwardedtotheAreaCounselforreview,approval,andsignaturebeforetransmissiontoCriminal
Investigation.IftheAreaCounselhasdelegatedsignatureauthority,thentheAreaCounselwillpostreviewthewrittenresponse.Ifwrittenprereferraladviceisprovidedto
CriminalInvestigationbytheofficeofAssociateChiefCounsel(CT),thewrittenresponsewillbereviewed,approved,andsignedbytheAssociateChiefCounsel(CT).

4.IfaninvestigationinvolvesanindividualorentitywithinthepurviewofanotherAssociateofficeorraisesissuesrequiringtechnicalassistance,CriminalTaxattorneysare
encouragedtocontacttheofficeofAssociateChiefCounsel(CT)forcoordination.

38.1.1.2(08112004)
CriminalInvestigationGroupReviewsandVisitations
 1.CriminalTaxattorneysshouldvisitCriminalInvestigationpersonneltoconductgroupreviewsandvisitations.Thepurposeofthereviewsandvisitationsistodiscussandto
addresslegalissuesandconcernspresentinthecasesinCriminalInvestigationsinventory.Specifically,theCriminalTaxattorneyandCriminalInvestigationpersonnel
shoulddiscussanylegalproblemsassociatedwiththeinvestigation,aswellasCriminalInvestigationstheoryofprosecution.Legalimpedimentsshouldberaisedand
discussed.

2.Wherereasonablypossible,thesegroupreviewsandvisitationsshouldbeconductedonceperquarter.

38.1.1.3(06272013)
SearchWarrantProcedures

1.TheFourthAmendmentprovidesthat"[t]herightofthepeopletobesecureintheirpersons,houses,papers,andeffects,againstunreasonablesearchesandseizures,
shallnotbeviolated,andnowarrantsshallissue,butuponprobablecause,supportedbyoathoraffirmation,andparticularlydescribingtheplacetobesearched,andthe
personsorthingstobeseized."ThescopeofFourthAmendmentprotectionextendstoanygovernmentsearchofprivateproperty,aswellasanyotherareainwhichan
individualhasareasonableexpectationofprivacy.

2.PursuanttotheFourthAmendment,awarrantmayonlybeissuedifthereisprobablecausetobelieveacrimehasbeencommittedandevidenceofthecrimewillbefound
inthelocationtobesearched.Theplacetobesearchedandtheitemstobeseizedmustbedescribedinsufficientdetailtoenabletheexecutingofficerstoidentifythe
placeandtheitemswithreasonableeffort.

3.Rule41oftheFederalRulesofCriminalProcedurecontainstheproceduresforobtainingawarrant.Briefly,Rule41providesfortheissuanceofawarrantbyafederal
magistrateorajudgeofastatecourtofrecordwithinthedistrictwherethepropertyorpersonsoughtislocated,uponrequestbyafederallawenforcementofficeroran
attorneyfortheGovernment.

4.Awarrantmaybeissuedtoseize:

Propertythatconstitutesevidenceofthecommissionofacrime

Contraband,thefruitsofacrime,orthingsotherwisecriminallypossessed

Propertydesignedorintendedtobeusedasaninstrumentalityofacrime

People,whenthereisprobablecausefortheirarrest

5.Torequestawarrant,thelawenforcementofficerorgovernmentattorneytypicallypresentsthemagistratewithaswornaffidavitthatestablishesprobablecauseforthe
proposedsearchandseizure(orforinstallationanduseofatrackingdevice).Ifthemagistrateissuesthewarrant,theofficerhastendaystoexecutethewarrant.The
searchshouldbeperformedduringthedaytime(between6:00a.m.and10:00p.m.)unlesstheissuingauthorityhasauthorizedexecutionatothertimes.Theofficer
executingthewarrantisrequiredtoprovideacopyofthewarrantandareceiptforanypropertyseizedtothepersonfromwhom,orfromwhosepremises,thepropertywas
taken.Theofficermustalsopromptlyreturnthewarrant,togetherwithawritteninventoryofthepropertyseized,tothemagistratejudge.

6.Congresshasauthorizedspecialagentstoseekandexecutesearchwarrantsincriminaltaxinvestigationsandanyothercriminalinvestigationwithinthelawenforcement
jurisdictionoftheService.Indecidingwhethertouseasearchwarrant,specialagentsarerequiredbytheIRM"toexecutetheirlawenforcementresponsibilitiesby
continuallyassessingtheprobableimpactoftheirenforcementactivitiesontheimageoftheIRS."IRM9.1.4.3(1),DirectiveNo.1EnforcementOperations.This
directivehasbeeninterpretedasrequiringCriminalInvestigationtoemploytheleastintrusivemeansneededintheirinvestigations.Further,theIRMprovidesthatsearch
warrantsfortaxandtaxrelatedoffenseswillbeused"withrestraintandonlyinsignificanttaxinvestigations."IRM9.4.9.2(5),GeneralSearchWarrantProcedures.
Accordingly,CriminalInvestigationrequiresspecialagentstoanalyzewhetherlessintrusivemeansarereasonablyavailabletoacquireevidencesoughtinalltaxandtax
relatedinvestigations.

Note:

PursuanttoIRSPolicyStatement4120,CriminalInvestigationmustobtainasearchwarrantinallcaseswhenseekingfromaninternetserviceprovider(ISP)thecontentof
emailcommunicationsstoredbytheISP.

7.CriminalInvestigationspolicyregardingCounselreviewofsearchwarrantapplicationsisasfollows:

A.Priortotheapprovalofasearchwarrantenforcementaction,Counselwillreviewallsearchwarrantapplicationswhereaspecialagentistheaffiant.

B.Thisreviewwillbeconductedforwarrantsinbothtaxandnontaxinvestigations.Counselsreviewisrequiredforsearchwarrantapplicationsobtainedinboth
administrativeandgrandjuryinvestigations.

C.CounselwillreviewboththeaffidavitandForm13739,EnforcementActionReviewForm.Subsequenttothisreview,Counselwillprovidewrittenadvicetothe
SpecialAgentinCharge(SAC)(ortotheDirectorofFieldOperations(DFO)forsensitivesearchwarrantsseeCCDM38.1.1.3.1(5))forconsiderationinthesearch
warrantapprovalprocess.

8.Inreviewingasearchwarrantapplication,CounselmustadviseCriminalInvestigationwhethertheaffidavitestablishessufficientprobablecausetosupportthewarrant,
and,ifnot,whatadditionalinformationisneeded.Inaddition,Counselmustevaluatewhetherthelocationtobesearchedandtheitemstobeseizedaredescribedwith
sufficientparticularity.Intaxandtaxrelatedinvestigations,CounselmustalsoadviseCriminalInvestigationwhetherlessintrusiveinvestigativemethodsarereasonably
availabletoacquiretheevidencesought.IfCriminalInvestigationseekstoobtainthecontentofemailcommunicationsfromanISP,Counselsanalysisofwhethera
warrantistheleastintrusivemeansavailablemustreferenceIRSPolicyStatement4120,whichrequiresawarrantinsuchcases.

9.Timeisoftheessenceinallsearchwarrantmatterstherefore,Counselshouldcompleteitsreviewandadviceasexpeditiouslyaspossible.Specifictimerequirementsfor
completion,review,andrenderingofadviceshouldbedeterminedonacasebycasebasis.Intheeventwrittenadvicecannotbeprovidedwithinthetimeframerequired,
CounselmayprovideoraladvicetoCriminalInvestigationwiththeapprovaloftheAreaCounselorAssociateChiefCounsel(CT).Allsuchadvicemustbememorializedin
awrittenmemorandumtoCriminalInvestigationassoonaspossible.Adetailedexplanationoftheexigencieswarrantingtherenditionoforaladvicemustbesetforthin
thememorandum.

10.IfasearchwarrantinvolvesanindividualorentitywithinthepurviewofanotherAssociateofficeorraisesissuesrequiringtechnicalassistance,CriminalTaxattorneysare
encouragedtocontacttheofficeofAssociateChiefCounsel(CT)forcoordination.

11.CriminalTaxattorneysdonotattendorparticipateintheactualexecutionofthesearch,buttheyshouldbeavailabletoanswerquestionsthatmayariseduringthesearch.

12.Foralltaxandtaxrelatedsearchwarrants,CriminalTaxattorneysmustconductareviewoftheseizedpropertyinventorypreparedbyCriminalInvestigationtoensurethe
itemsseizedarewithinthescopeofthewarrantandtoidentifyanyinconsistencies.

38.1.1.3.1(06272013)
SearchWarrantAuthorization

1.Authorization.AllsearchwarrantswhereaspecialagentistheaffiantmustbeapprovedbytherespectiveSACorDFOpriortoexecution.TheSACorDFOisrequiredto
obtaintheadviceandassistanceofCounselinthepreparationandreviewofallsearchwarrantapplicationspriortoreferringthemtotheappropriateDepartmentofJustice
(DOJ)officialforauthorization.

2.DOJauthorization.PursuanttoTaxDivisionDirectiveNo.52(revisedMarch17,2008),theTaxDivisionhasdelegatedtoU.S.Attorneystheauthoritytoapprovecertain
Title26ortaxrelatedTitle18searchwarrantsdirectedattheoffices,structures,premises,etc.owned,controlled,orunderthedominionofthesubjectortargetofacriminal
investigation.TheTaxDivisionretainsexclusiveauthority,however,toapprovesearchwarrantsdirectedattheoffices,structures,orpremisesowned,controlledorunder
thedominionofasubjectortargetofaninvestigationwhois:
 Anaccountant

Alawyer

Aphysician

Alocal,state,federal,orforeignpublicofficialorpoliticalcandidate

Amemberoftheclergy

Arepresentativeoftheelectronicorprintednewsmedia

Anofficialofalaborunionor

AnofficialofanorganizationdeemedtobeexemptunderIRC501(c)(3).

3.Investigationsinvolvingthirdparties.TheTaxDivisionalsoretainsexclusiveauthoritytoapprovetheuseofsearchwarrantsincriminalinvestigationsinvolving
disinterestedthirdparties,withtheexceptionof:

A.Searchwarrantsdirectedtoprovidersofelectroniccommunicationservicesorremotecomputingservicesandrelatingtoasubjectortargetofacriminal
investigationand

B.Searchwarrantsdirectedtodisinterestedthirdpartiesowningstoragespacebusinessesorsimilarbusinessesandrelatingtoasubjectortargetofacriminal
investigation.

Note:

SuchsearchwarrantsnolongerrequireTaxDivisionapproval,unlesstheyrelatetoapersonreasonablybelievedtobeoneoftheindividualslistedinCCDM38.1.1.3.1(2).
(SeeTaxDivisionDirectiveNo.52,revisedMarch17,2008.)

4.Significantcasepolicy.ItisthepolicyoftheIRSandtheTaxDivisionthatsearchwarrantswillbeutilizedwithrestraintandonlyinsignificantcriminaltaxcases.The
significanceofacriminaltaxcasemaybedeterminedbyconsideringsuchfactorsas:

Theamountoftaxdue

Thenatureofthefraud

Theneedfortheevidencetobeseizedor

Theimpactofthepotentialcriminaltaxcaseonvoluntarycompliancewiththerevenuelaws.

5.SensitiveSearchWarrants.TheSACisrequiredtoobtaintheconcurrenceoftherespectiveDFOfortheexecutionofasearchwarrantdirectedatoffices,structuresor
premisesownedorcontrolledbyoneofthefollowing:

Anaccountant

Alawyer

Aphysician

Alocal,state,federal,orforeignpublicofficialorpoliticalcandidate

Amemberoftheclergy

Arepresentativeoftheelectronicorprintednewsmedia

Anofficialofalaborunion

AnofficialofanorganizationdeemedtobeexemptunderIRC501(c)(3)or

Withcertainexceptions,adisinterestedthirdparty,seeCCDM38.1.1.3.1(3).

6.SensitivesearchwarrantapplicationsmustbeforwardedtotheofficeofAssociateChiefCounsel(CT)forreviewpriortobeingforwardedtotheDFO.Allothersearch
warrantapplicationsarereviewedbyfieldCriminalTaxattorneysand/orAreaCounselpriortobeingforwardedtotheSAC.

38.1.1.3.2(06272013)
CounselReviewandAdvice

1.Uponreceiptofasearchwarrantapplication,CounselmustreviewthewarrantandsupportingdocumentationandprepareamemorandumfortheSACorDFO,evaluating
investigativenecessity,legalsufficiency,andpolicycompliance.

2.Inallcases,Counsel'smemorandummustevaluatewhetherthethreeprongedprobablecausetestismet.Thefactsenumeratedintheaffidavitshouldclearlyestablish
thereisprobablecausetobelieve:

1.Acrimehasbeencommitted,

2.Theitemssoughtmaybeseizedbyvirtueoftheirconnectionwiththecrime,and

3.Theitemssoughtareatthelocationtobesearched.

3.Counselsmemorandummustalsoevaluatewhetherthewarrantandsupportingdocumentationdescribethelocationtobesearchedandtheitemstobeseizedwith
sufficientparticularity.

4.Intaxandtaxrelatedinvestigations,CounselmustreviewCriminalInvestigationsexplanationinForm13739,EnforcementActionReviewForm,ofwhyasearchwarrantis
theleastintrusivemeansavailableforobtainingtheevidencesought.ToassisttheSACorDFOindeterminingwhetherthe"leastintrusivemeans"requirementhasbeen
met,Counselsmemorandumshouldaddresswhetherthereareothermeansavailabletoobtaintherecords,e.g.,whetherthetaxpayerwouldprovidetherecordsupon
request,whetherasummonsorsubpoenacouldbeusedtoobtaintherecords,andwhethertherecordscouldbeobtainedfromathirdparty.

Note:

IfCriminalInvestigationseekstoobtainthecontentofemailcommunicationsfromanISP,CounselsanalysismustreferenceIRSPolicyStatement4120,whichrequiresa
warrantinsuchcases.

38.1.1.3.2.1(06272013)
NonSensitiveSearchWarrants
 1.Fornonsensitivewarrants,thefieldCriminalTaxattorneypreparesamemorandumtotheSACdiscussingthemeritsofthewarrant.CriminalTaxattorneysintheofficeof
AssociateChiefCounsel(CT)areavailableforconsultationwithfieldCriminalTaxattorneys,ifdesired.

2.Acopyofthesearchwarrant,exhibits,andmemorandumisforwardedtotheAreaCounsel.TheAreaCounselreviews,approves,andsignstheadvisorymemorandum.
(CriminalTaxattorneyswhohavebeendelegatedsignatureauthoritymaysignthememorandumandthenforwardacopyofthesearchwarrant,exhibits,and
memorandumtotheAreaCounsel).

38.1.1.3.2.2(06272013)
SensitiveSearchWarrants

1.Forsensitivesearchwarrants,thefieldCriminalTaxattorneypreparesamemorandumtotheAssociateChiefCounsel(CT)discussingthemeritsofthewarrantand
transmitsthememorandumandsearchwarrantpackagetotheAreaCounsel.

2.TheAreaCounselreviews,approves,andsignsthememorandumandtransmitsthememorandumandcompletesearchwarrantpackagetotheAssociateChiefCounsel
(CT).

3.Thesearchwarrantpackageconsistsof:

A.ThefieldCriminalTaxattorneysmemorandum

B.Thedraftsearchwarrantandsupportingaffidavit(withrelatedattachments)

C.AcopyofForm13739,EnforcementActionReviewFormand

D.Acopyoftheriskassessmentforeachspecificlocationtobesearched,ifprovided.

4.OncereceivedbytheofficeofAssociateChiefCounsel(CT),thememorandumandsearchwarrantpackagearereviewed,andanadvisorymemorandumtothe
appropriateDFOisprepared.

5.TheAssociateChiefCounsel(CT)reviews,approvesandsignstheadvisorymemorandumandtransmitsthememorandumandsearchwarrantpackagetotheappropriate
DFOandAreaCounsel.

38.1.1.3.3(06272013)
SearchWarrantInventoryReviewforTaxandTaxRelatedSearchWarrants

1.Aftertheexecutionofataxortaxrelatedsearchwarrantinwhichaspecialagentistheaffiant,thefieldCriminalTaxattorneywhoreviewedthewarrantpackagewillreview
theinventorypreparedbyCriminalInvestigationtodeterminewhethertheitemsseizedwerewithinthescopeofthewarrantandprepareamemorandumtotheSAC.

2.IftheCriminalTaxattorneyidentifiesanyissuewithrespecttotheinventoryorthescopeoftheseizure,he/sheshouldconsultwithCriminalInvestigationandthe
prosecutorinvolvedintheinvestigationtodiscussandresolvetheissue.TheCriminalTaxattorneyshouldattempttoresolveanysuchissuespriortodraftingtheinventory
reviewmemorandumtotheSAC.Ifanyissuescannotberesolvedbyspeakingwiththecaseagentandthesupervisingprosecutor,theattorneyshouldconsultwithhis/her
AreaCounselandtheSACpriortodraftingtheinventoryreviewmemorandum.

3.TheAreaCounselwillreview,approve,andsigntheinventoryreviewmemorandum.IfsignatureauthorityhasbeendelegatedtothefieldCriminalTaxattorneywho
reviewedthewarrant,theAreaCounselshouldbeprovidedacopyofthememorandumforpostreview.

38.1.1.3.4(06272013)
GeneralLegalGuidanceandIssues

1.Thefollowingisasuggestedchecklistforreviewingaffidavitsandwarrants:

A.Thepremisestobesearchedshouldbedescribedwithspecificity.

B.Theitemstobeseizedshouldbedescribedasspecificallyaspossible,andtherelationshipofanysuchitemstotheallegedviolationsshouldbeexplainedinthe
affidavit.

C.Theaffidavitshouldbelogicallydividedwithparagraphsconsecutivelynumbered.

D.Theaffidavitshouldincorporatebyreferenceanydiagrams,photographsorotherexhibitsthatbearonprobablecause.

E.Theaffidavitshouldsetforththeaffiantsexperience,describetheevidencesupportingprobablecause,andstatethattheaffianthasprobablecausetobelieve
certaincrimeshavebeencommittedandcertainspecifiedevidenceofthosecrimeswillbefoundatthelocationtobesearched.

F.Affidavitsshouldaddressthecredibilityandreliabilityofanyinformants.

G.Ifaffidavitsarebasedonundercovercontacts,informationrelativetotheseactivitiesshouldbemadeavailableforreview.

H.Theaffidavitshouldidentifyalltargets,thespecificoffensesforwhichthereisprobablecause,andthetimeframeofthoseoffenses.

I.Theaffidavitshouldsetforthadescriptionoftheunlawfulactivitiesinafactual(notconclusory)mannerfollowedbyafactualdiscussionoflocationoftheevidence
anditsrelationshiptothecrime.Permissibleinferencessupportedbytherecitedfactsandcircumstancesmaybeincludedinthisdiscussion.

J.Informationinthewarrantshouldbecorroboratedwithrecords,taxreturns,andotherdocumentstotheextentappropriate.

K.Ifthelocationtobesearchedincludesoneormorecomputers,theaffidavitshouldarticulateafactualbasistobelievethatthecomputerwasusedforthecreation
and/orstorageofevidentiaryrecordsand,ifnecessary,shouldexplainwhyanonsitesearchisnotpossible.Appropriatesafeguardingmeasuresforcomputer
searchesshouldbedescribed.

L.Ifthelocationtobesearchedisownedorcontrolledbyanaccountant,lawyer,orphysician,thememorandumshoulddiscussanypotentialprivilegeorprivacy
issuesandrecommendtheuseofataintteam.

M.Thedescriptionoftheplacetobesearchedandthelistofitemstobeseizedshouldbephysicallyattachedtotheaffidavit,andtheattachmentsshouldbe
incorporatedintotheaffidavitbyreference.

Note:

SeeExhibit38.3.11,SearchWarrantCheckSheet

2.Insomeinstances,evidencemaybepresentedtotheIRSbyotherfederalagencies,orbystateorlocalauthoritiesthatobtainedtheevidencethroughasearchorarrest
warrant,penregister,orwiretap.CounselattorneysshouldevaluatetheadmissibilityofsuchevidencebeforeCriminalInvestigationreliesuponandincludestheevidence
initssearchwarrantaffidavits.

3.Searchwarrantaffidavitsadvancingapermeatedwithfraudtheoryshouldincludeadetaileddiscussionoftheinformationsupportingthistheory.
38.1.1.4(06272013)
UndercoverAssistance

1.Approvalofundercoveroperations.CriminalInvestigationengagesinundercoveroperationsforthepurposeofsecuringinformationand/orevidencerelativetoan
investigation.UndercoveroperationsareclassifiedaseitherGroupIorGroupII.AllGroupIundercoveroperationsmustbeapprovedbytheChief,CriminalInvestigation.
GroupIIundercoveroperationsareapprovedbytheappropriateDFO.

2.GroupIUndercoverOperations.GroupIundercoveroperationsarethosethatexceedsixmonthsindurationand/or$50,000inrecoverablefundsorinvolveoneofthe
factorslistedinIRM9.4.8.3.1(2),GroupIUndercoverOperations.AllGroupIundercoverrequestsarereviewedbytheUndercoverReviewCommittee,whichsitsat
CriminalInvestigationHeadquartersinWashington,D.C.TheHeadquartersUndercoverReviewCommitteeiscomprisedoftheDirector,OperationsPolicyandSupport
(CI:OPS),theDirector,OfficeofSpecialInvestigativeTechniques(CI:OPS:SIT),AssociateChiefCounsel(CT)ordelegate,andtheDeputyAssistantAttorneyGeneral,Tax
Division.

3.GroupIIUndercoverOperations.GroupIIundercoveroperationsarethosethatdonotmeettherequirementsofaGroupIundercoveroperation.TheDFOisauthorizedto
establishanAreaUndercoverReviewCommitteethatincludestheAreaCounsel(CT),theAreaUndercoverProgramManager,andanAreaStaffAnalyst.TheArea
UndercoverReviewCommitteeisadvisoryinnatureandrecommendstotheDFOapprovalordisapprovalofinitialundercoverrequests,aswellassignificantdeviations
fromorextensionstoongoingundercoveroperations.

4.CriminalInvestigationisrequiredtoconsultCounselinallundercoveroperations.

5.TheCriminalTaxattorneysroleinanundercoveroperationistorenderlegaladviceonallaspectsoftheoperation,aswellasattendingallpreoperationaland
operationalmeetings.

38.1.1.5(08112004)
ElectronicSurveillance

1.Thissubsectiondiscussesauthorizationofassortedtypesofelectronicsurveillanceundervariousstatutes.

38.1.1.5.1(06272013)
NonConsensualMonitoringofWire/OralInterception

1.Under18U.S.C.2516(TitleI),courtsmayauthorizeelectronicinterceptionofthecontentsofwireandoralcommunicationsduringtheinvestigationofspecificcriminal
offenses,whicharelistedinthestatute.

Note:

ThisstatutedoesnotauthorizetheinterceptionofwireandoralcommunicationsforTitle26violations.

2.StatutesandIRSpolicyprohibitnonconsensualmonitoringoforalandwirecommunicationsforTitle26purposeshowever,theServicemayreceiveTitleIinformation.
Lawenforcementofficerswhoobtainwiretapevidencearepermittedtoturnsuchevidenceovertootherlawenforcementofficersforthelattersuseandspecialagentsare
consideredinvestigativeorlawenforcementofficerstowhominformationmaybedisclosed.Lawenforcementofficersarepermittedtousewiretapevidenceintheirofficial
duties,suchasissuingsummonses,investigatingtaxoffensesorpreparingspecialagentreports.18U.S.C.2517.

3.Lawenforcementofficersarealsopermittedtousetheevidenceinagrandjury,incourtoranyotherproceeding,ortheymaydiscloseitviatestimony.Priortosuchuse,
however,thelawenforcementofficersmustobtainaderivativeuseorderthatmustbebaseduponthecourtsfindingthattheevidenceofthenonspecifiedcrime(i.e.,tax
offense)wasotherwise(orproperly)intercepted.Failuretoobtainsuchanordercanresultindismissalofthecaseorliabilityforcivildamagesduetounauthorized
disclosure.Thederivativeuseordershouldbeobtainedassoonaspracticable.

4.TheCriminalTaxattorneyreviewsthevalidityoftheTitleIorderandsoadvisestheSACinamemorandum.TheUSAttorneysofficeobtainstheappropriatederivativeuse
orderforCriminalInvestigation.

38.1.1.5.2(06272013)
ElectronicCommunications

1.Anelectroniccommunicationisanytransferofsigns,signals,writing,images,sounds,data,orintelligenceofanynaturetransmittedinwholeorinpartbyawire,radio,
electromagnetic,photoelectronic,orphotoopticalsystemthataffectsforeignorinterstatecommerce.See18U.S.C.2510(12).Electroniccommunicationsdonotinclude
wireororalcommunications,communicationsthroughatoneonlypagingdevice,communicationsfromatrackingdevice,orelectronicfundstransferinformationstoredby
afinancialinstitution.Examplesofelectroniccommunicationsincludecommunicationsthroughdigital/displaypagers,electronicmail(email),andfaxtransmissions.

2.Section2516(3)ofTitle18oftheUnitedStatesCodeallowsfortheinterceptionofelectroniccommunicationswhensuchinterceptionmayprovideorhasprovided
evidenceofanyfederalfelony,includingTitle26offenses.Tointerceptsuchcommunications,electroniccommunicationinterceptordersmustbebaseduponan
applicationandanaffidavit.TheCriminalTaxattorneyevaluatestheseaffidavitsforfactualandlegalsufficiencyandpreparesamemorandumforreviewbytheArea
Counsel.OncetheAreaCounselapprovesthememorandum,itmustbeforwardedtotheAssociateChiefCounsel(CT)forfinalapprovalandsignature.Oncesignedby
theAssociateChiefCounsel(CT),thememorandumwillbereturnedtotheAreaCounselfordisseminationtoCriminalInvestigation.

3.Toensureuniformity,applicationsfortheinterceptionoffaxtransmissionsandpagersmustbeapprovedbythesameDOJofficialswhoapprovewireandoralinterception
applicationsandmustcomplywiththeproceduresprovidedin18U.S.C.2518.Consequently,applicationsforpagersandfacsimiletransmissionsshouldbecoordinated
throughtheofficeofAssociateChiefCounsel(CT).

38.1.1.5.2.1(06272013)
StoredElectronicCommunications

1.Storedelectroniccommunicationsincludethecontentofwireorelectroniccommunications,aswellassubscriberorcustomerrecords,whichareheldinelectronicstorage
byanelectroniccommunicationserviceprovider(e.g.,aninternetserviceproviderorISP).Storedelectroniccommunicationsalsoincludethecontentsofwireorelectronic
communications,aswellassubscriberorcustomerrecords,whichareheldbyaremotecomputingserviceproviderforthepurposeofprovidingstorageorcomputer
processingservices.

2.Title18U.S.C.2703providesproceduresforobtainingstoredelectroniccommunicationsfromserviceproviders.However,whenseekingtoobtainthecontentofemail
communicationsfromISPs,IRSPolicyStatement4120mustbefollowed(seeCCDM38.1.1.5.2.2).

38.1.1.5.2.2(06272013)
ObtainingContentofEmailCommunicationsfromServiceProviders

1.PursuanttoIRSPolicyStatement4120,theIRSwillobtainasearchwarrantinallcaseswhenseekingfromanISPthecontentofemailcommunicationsstoredbytheISP.

2.WhenCriminalInvestigationistheaffiantonanonsensitivesearchwarrantseekingthecontentofemailcommunicationsfromanISPand/oranyotherformofstored
electroniccommunication,thefieldCriminalTaxattorneyand/orAreaCounselwillreviewtheaffidavitforlegalsufficiencyandprepareamemorandumtotheSAC
discussingthemeritsofthewarrant.SeeCCDM38.1.1.3.2.1.AnysuchsearchwarrantscharacterizedassensitiveunderCCDM38.1.1.3.1(5)mustbeforwardedtothe
officeofAssociateChiefCounsel(CT)forreviewandpreparationofamemorandumtotheDFO.SeeCCDM38.1.1.3.2.2.

38.1.1.5.3(06272013)
ConsensualMonitoring
 1.Definition.Consensualmonitoringoccurswhenatleastonepartytoaconversationagreestohavetheconversationmonitoredusingadevice,suchasabodybug,
telephonebug(suctioncup),roombug,orvideobug.Becauseapartytotheconversationconsentstotherecordingofit,thisactivitydoesnotimplicateTitleI.Consensual
monitoringcantaketwoforms:telephonicandnontelephonic.Neitherformrequiresacourtorder,butpriorDOJorUSAttorneyapprovalisrequired.

2.FullConsent.Ifallparticipantsconsenttomonitoring,authorizationisunnecessary,regardlessofwhetheritistelephonicornontelephonicmonitoring.SeeIRM9.4.7,
ConsensualMonitoring.

3.PartialConsent.Intelephonicandnontelephonicmonitoring,iflessthanallparticipantsconsenttothemonitoring,authorizationmustbeobtained.SeeIRM9.4.7,
ConsensualMonitoring.

4.TelephonicMonitoring.AForm8041,RequestforAuthorizationtoUseElectronicEquipmentandConsensualMonitoring,isusedtorequestapprovalfortelephonic
monitoring.Therequestmustbeinwritingbeforeauthorizationisgrantedhowever,iftimedoesnotpermit,therequestmaybeoral,withForm8041beingsubmittedatthe
earliestpracticaltime.TheSAChastheauthoritytoapprovetherequestsandthisauthoritymaynotbedelegated.TheCriminalTaxattorneywillassistCriminal
Investigationpersonnelwhenquestionsariseandreviewforlegalsufficiency.

5.NontelephonicMonitoring.Toobtainauthorizationfornontelephonicmonitoring,requestsmustbeinwritingonForm8041.Oralrequestsareallowedifthereisabona
fideemergency,butthesemustbeconfirmedinwritingwithintwoworkingdaysaftertheoralrequestismade.TheformmustnoteapprovalbyanattorneyforDOJorthe
USAttorneysoffice,alongwithhis/hernameandposition.TheCriminalTaxattorneywillassistCriminalInvestigationpersonnelwhenquestionsariseandreviewforlegal
sufficiency.

38.1.1.5.3.1(06272013)
UseofElectronicTrackingDevices

1.Electronictrackingdevices(e.g.,GlobalPositioningSystemorGPSdevices)maybeusedtomonitorthephysicalwhereaboutsofaperson,vehicle,orotheritemtowhich
thedeviceisattached.

2.ElectronictrackingdevicesmaybeusedinanycasewhereCriminalInvestigationhasjurisdiction,butonlyif:

A.Thepersontobemonitored,orthepersoninlawfulpossessionofthevehicleorotheritemtobemonitoredconsentstotheinstallationofthedeviceor

B.Installationoftheelectronictrackingdeviceisauthorizedbyasearchwarrant.

3.TheSAC,withtheconcurrenceofthelocalU.S.Attorney,mayauthorizeconsensualuseofelectronictrackingdevices.TheCriminalTaxattorneymayassistCriminal
Investigationpersonnelandreviewtherequestforlegalsufficiency.

4.WiththeSACsapproval,aspecialagentmayapplyforasearchwarrantauthorizingthenonconsensualinstallationofanelectronictrackingdevice.Counselwillreview
theaffidavitinsupportofthesearchwarrantapplicationforlegalsufficiencyandwillprepareamemorandumtotheSAC(ortotheDFOforsensitivewarrants)discussing
themeritsofthewarrant.SeeCCDM38.1.1.3.2.

5.Thelawpermitsafederalcourttoissueawarrantforelectronictrackingdevicesauthorizingtheiruseevenoutsideofthejurisdictioninwhichthedevicewasinstalled.This
willpermitmonitoringasthesubjectmovesfromdistricttodistrictinsideoroutsidetheUnitedStateswithoutreapplyingforaseparatewarrantforeachjurisdiction.See18
U.S.C.3117.

38.1.1.5.3.2(08112004)
PenRegistersandTrapandTraceDevices(Grabbers)

1.Apenregisterisamechanicaldevicethatisattachedatatelephonejunctionboxandrecordstheactualnumberscalled(outgoing)fromaparticularline.Inadditionto
recordingthenumberscalled,apenregisteriscapableofrecordingthedate,timeanddurationofeachcall.Atrapandtracedevice(grabber)isatechniquewherebythe
telephonecompanyusesaswitchingsystemorfacilitytoidentifythesource(telephonenumber)ofanincomingcall.Ofcourse,thedate,timeanddurationofthecallcan
alsoberecordedbythetelephonecompany.See18U.S.C.3121through3126.

2.Penregistersandtrapandtracedevices(grabbers)maybeusedbyCriminalInvestigationasinvestigativetoolsonlywhenauthorizedbycourtorderincasesinvolving
felonyviolationsandinwageringtaxinvestigations.Penregistersandothertypesoftelephonenumberrecorderswillnotbeusedininvestigationsinvolvingmisdemeanor
violations(otherthanwageringcases),suchasaltereddocumentscasesunderIRC7207andgeneralprogramcases,suchasinvestigationsofQuestionableRefund
Programscases.

38.1.1.6(06272013)
Summonses

1.Specialagentshavebeendelegatedauthorityasindividualsbeforewhomasummonedpersonshallappear.Pursuanttothisauthority,specialagentsmaytaketestimony
underoathofthepersonsummoned,setthetimeandplaceofexamination,andreceiveandexaminedataproducedincompliancewiththesummons.

2.AssistancetospecialagentsinthesummonsprocessshouldfocusonthePowellrequirements.UnitedStatesv.Powell,379U.S.48(1964).Theseprovidethattobe
enforceableeverysummonsmustmeetthefollowingbasictestforvalidity:

A.Issuedforalegitimatepurpose

B.Seeksinformationthat"mayberelevant"totheinvestigation

Caution:

Forthirdpartysummonses,theServicemustestablishanexusbetweenthethirdpartyandthetaxpayer.

C.SeeksinformationthatisnotalreadyintheServicespossessionand

D.AlladministrativestepsrequiredbytheCodehavebeenfollowed.

3.Counselretainsreferralauthorityforsummonsenforcementmatters.ThesemattersshouldbecoordinatedasnecessarywiththeofficeofAssociateChiefCounsel
(Procedure&Administration).SeeCCDM34.6.3,SummonsEnforcementActions,andtheSummonsHandbook,beginningwithIRM25.5.1,SummonsIntroduction,for
additionalassistance.

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