7 August 2001

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

## Handbook 9.5 The Investigative Process Chapter 2 GRAND JURY INVESTIGATIONS
### Contents [9.5] 2.1 OVERVIEW [9.5] 2.2 INITIATION OF GRAND JURY INVESTIGATIONS [9.5] 2.3 PROCEDURES INCIDENT TO GRAND JURY REQUESTS [9.5] 2.3.1 Grand Jury Requests Involving Potential Tax Violations [9.5] 2.3.1.1 Service Initiated Requests [9.5] 2.3.1.2 Government Attorney Initiated Requests [9.5] 2.3.1.3 Chief's Review of Government Attorney Initiated Requests [9.5] 2.3.1.4 Routing of Grand Jury Requests [9.5] 2.3.1.5 Time Allotted for the Review of Grand Jury Requests [9.5] 2.3.1.6 Procedures to be Followed if Counsel Opposes a Grand Jury Request [9.5] 2.3.1.7 Procedures to be Followed if a Grand Jury Request is Declined by the Department of Justice [9.5] 2.3.2 Non-Tax Grand Jury Requests [9.5] 2.3.3 Grand Jury Expansion Requests [9.5] 2.4 GRAND JURY SECRECY [9.5] 2.4.1 Grand Jury Access List [9.5] 2.4.2 Access to Grand Jury Material by Internal Audit [9.5] 2.4.3 Civil or Non-Grand Jury Use of Grand Jury Material [9.5] 2.5 INVESTIGATIVE TECHNIQUES PECULIAR TO GRAND JURY INVESTIGATIONS [9.5] 2.5.1 Subpoenas [9.5] 2.5.1.1 Preparing And Serving Subpoenas [9.5] 2.5.1.1.1 Attendance of Witnesses in a Grand Jury or Trial Proceeding [9.5] 2.5.1.1.2 Subpoena For Production of Documentary Evidence [9.5] 2.5.1.1.3 Custodian of Records [9.5] 2.5.1.2 Place of Service [9.5] 2.5.1.3 Failure To Comply [9.5] 2.5.1.4 Return Of Documents To The Grand Jury [9.5] 2.5.1.5 Disclosure Of Information [9.5] 2.5.2 Advice Of Rights In A Grand Jury Investigation [9.5] 2.5.3 Use Of IRS Credentials During A Grand Jury Investigation [9.5] 2.5.4 Use Of Informants In A Grand Jury Investigation [9.5] 2.5.5 Collateral Requests Containing Grand Jury Information [9.5] 2.5.6 Consensual Monitoring In A Grand Jury Investigation [9.5] 2.5.7 Use Of Search Warrants In A Grand Jury Investigation [9.5] 2.5.8 Foreign Travel During Grand Jury Investigation [9.5] 2.5.9 Information Documents From Grand Jury Sources [9.5] 2.6 ADMINISTRATIVE PROCEDURES PECULIAR TO GRAND JURY INVESTIGATIONS [9.5] 2.6.1 Control of Tax Returns [9.5] 2.6.2 Responsibility for Civil Statutes of Limitation [9.5] 2.6.3 Civil Actions During the Grand Jury Investigation [9.5] 2.6.4 Disclosure Provisions Concerning State and Local Law Enforcement Involved in Grand Jury Investigations [9.5] 2.6.5 Attempted Bribery in Grand Jury Investigations [9.5] 2.6.6 Reports and Closing Procedures in Grand Jury Investigations [9.5] 2.6.6.1 Final Report [9.5] 2.6.6.2 Post-Closing Civil Actions [9.5] 2.6.6.3 Disposal of Records [9.5] 2.6.6.4 Notification of Counsel [9.5] 2.7 LISTS OF AUTHORITY FOR REQUESTING GRAND JURY INVESTIGATIONS Exhibit [9.5] 2-1 MEMORANDUM OF UNDERSTANDING CONCERNING ACCESS TO GRAND JURY MATTERS FOR INTERNAL AUDIT PURPOSES Exhibit [9.5] 2-2 STATEMENT REGARDING USE AND DISCLOSURE OF FEDERAL TAX INFORMATION BY STATE OR LOCAL GOVERNMENT EMPLOYEE APPOINTED TO ASSIST A FEDERAL GRAND JURY INVESTIGATION
### [9.5] 2.1 (09-30-1998) OVERVIEW
Special agents are authorized to assist the United States Attorney in conducting investigations, in preparing for indictment, trial, and in obtaining evidence relative to sentencing, in matters involving potential violations of Title 26, and/or Title 18, and/or Title 31 of the United States Code committed in contravention of tax, bank secrecy, or money laundering statutes. A United States Attorney or Strike Force Attorney may request special agents to assist in such investigations by a Federal grand jury, or to make presentations to a Federal grand jury. Also, the IRS or an attorney for the government may initiate a request for a grand jury investigation.
### [9.5] 2.2 (09-30-1998) INITIATION OF GRAND JURY INVESTIGATIONS
The Service may request the use of a grand jury either before, during, or after conducting an administrative investigation. A grand jury may normally be requested whenever: using a grand jury would be more efficient, e.g., the administrative process cannot develop the relevant facts within a reasonable period of time; an investigation has proceeded as far as the administrative process allows, but prosecution potential would be strengthened by the grand jury process; An attorney for the government, such as an Assistant United States Attorney (AUSA), may ask for CI's assistance in an ongoing or proposed grand jury investigation whenever the information available to the attorney indicates possible commission of crimes under the jurisdiction of the Service.
### [9.5] 2.3 (09-30-1998) PROCEDURES INCIDENT TO GRAND JURY REQUESTS
The following procedures should be used for grand jury requests.
### [9.5] 2.3.1 (09-30-1998) Grand Jury Requests Involving Potential Tax Violations
In both Service initiated requests and requests initiated by an attorney for the government, the special agent must prepare Form 9131, Request for Grand Jury Investigation. This form must be signed by both the Chief, CI, and the District Director. If this request contains any information governed by the grand jury secrecy provisions, the special agent must stamp or print on the top right hand corner of Form 9131 the phrase: "Caution: This document contains secret grand jury information." The special agent will also place a cover sheet over the request which states: "This report contains secret grand jury information." If this request is replete with grand jury information, the special agent need not stamp each page, but instead use a cover sheet which states that certain pages contain grand jury information. A Grand Jury Access List, Form 9510, must be attached to all grand jury requests.
### [9.5] 2.3.1.1 (09-30-1998) Service Initiated Requests
Service initiated requests should include: identification of the probable criminal subject(s), inclusive of all tax returns at issue, identification of all taxpayers involved, and all indications of wrongdoing which support the contemplated charges; identification of potential witnesses, and recommendations as to the testimonial and documentary evidence to be sought before the grand jury; a summary of the progress of the investigation to date, including all investigative steps taken, all evidence developed (including witnesses contacted and their testimony), and all summonses issued but not yet complied with (including the status of summons enforcement activities) a summary of any existing or prospective civil actions against the subject(s); the reason(s) why a grand jury investigation is being requested; (e.g., the need for quick action rather than the administrative process; the need for subpoenas rather than administrative summonses; any other relevant factors); and the importance of the anticipated prosecutions to compliance. Completed requests and supporting schedules will be forwarded as specified in this chapter at 9.5.2.3.1.4. below entitled "Routing Of Grand Jury Requests" .
### [9.5] 2.3.1.2 (09-30-1998) Government Attorney Initiated Requests
Government attorney initiated requests for grand jury assistance should: be submitted in writing to the Chief, CI; include the name and TIN of the subject(s); include the names of other law enforcement agencies in the investigation; any non-tax violations; years involved; and probable tax violations. If the request includes grand jury information, it should specifically authorize the disclosure of grand jury material to Service personnel in accordance with Rule 6(e) of the Federal Rules of Criminal Procedure. The authorization should include disclosure of information necessary to evaluate the request.
### [9.5] 2.3.1.3 (09-30-1998) Chief's Review of Government Attorney Initiated Requests
The Chief, or a designee, will review and analyze all financial and other relevant information to determine criminal prosecution potential within the Service's jurisdiction. If the Chief believes that CI should participate in the grand jury investigation, then the Chief will advise the attorney for the government of the Service's procedure for approving the request, and will assign a special agent to prepare Form 9131, Request for Grand Jury Investigation. If the Chief believes that CI should not participate in the grand jury investigation, then the Chief will advise the attorney for the government in writing, stating the reasons for not participating, and will return all grand jury materials together with a list of all Service personnel who had access to these materials.
### [9.5] 2.3.1.4 (09-30-1998) Routing of Grand Jury Requests
All tax grand jury requests must be approved by the Group Manager, Chief, and District Director. Where the request is routed after the District Director approves it depends upon the type of investigation. All requests, other than OCDETF requests that involve potential tax violations, will be routed by the District Director to the appropriate Regional Counsel, or the Regional Counsel's designee. NOTE: If the request involves more than one district, the District Director will contact all of the other District Directors concerned prior to forwarding the request, and will document their concurrence in the investigation file. If the District Directors cannot agree, the originating District Director will forward the matter to the Director of Investigations responsible for the district for a final determination. Counsel will, in turn, refer approved requests to the Department of Justice, Tax Division. All requests of the type described in Department of Justice, Tax Division, Directive No. 96, concerning investigation of false refund claims, in violation of 18 U.S.C. 286 or 287, may be referred by Counsel directly to the U.S. Attorney, if the request involves: an individual, who for a single year files or conspires to file multiple tax returns in the names of nonexistent taxpayers, with the intent of obtaining tax refunds. A copy of the request for grand jury investigation letter from Counsel, together with a copy of Form 9131 and a copy of all exhibits must be sent to the Department of Justice, Tax Division, by overnight courier at the same time that Counsel refers a request for grand jury investigation directly to the local U.S. Attorney. Where time is of the essence, the Chief may expedite a request for grand jury investigation of electronically filed false claims for refunds by obtaining approvals within the IRS by telephone, but must follow the approvals with written confirmation. All OCDETF requests that involve potential tax violations will be routed from the District Director directly to the local U.S. Attorney, with an information copy sent to the Department of Justice, Tax Division.
### [9.5] 2.3.1.5 (09-30-1998) Time Allotted for the Review of Grand Jury Requests
Service initiated: District Director--10 workdays of receipt Director of Investigations (when applicable)--5 workdays of receipt Counsel--20 workdays of receipt Attorney for the government initiated: Chief (CI)--10 workdays of receipt Director of Investigations (when applicable)--5 workdays of receipt District Director--5 workdays of receipt Counsel--10 workdays of receipt
### [9.5] 2.3.1.6 (09-30-1998) Procedures to be Followed if Counsel Opposes a Grand Jury Request
If | Then
Counsel opposes the request. . . | Counsel must contact the Director of Investigations and discuss the request.
Counsel still opposes the request | If the Director of Investigations believes the request should be approved, it will be forwarded to the AC:CI. If the Director of Investigations concurs with Counsel, the request will be terminated.
The AC:CI believes the request should be approved | The AC:CI will send the request to the Assistant Chief Counsel (Criminal Tax) for reconsideration.
The Assistant Chief Counsel (Criminal Tax) concurs with the request | The Assistant Chief Counsel (Criminal Tax) will forward the request to the Department of Justice.
The Assistant Chief Counsel (Criminal Tax) declines the referral | The AC:CI may request reconsideration by the Associate Chief Counsel (Enforcement Litigation) whose decision will be final.
If Counsel opposes a supplemental grand jury investigation contained in a prosecution report, Counsel may either: submit the report to the Department of Justice, Tax Division, recommending prosecution without including the request for a supplemental grand jury investigation; or return the case to the district with a recommendation that it not be prosecuted, or that a supplemental administrative investigation be conducted. In the event a request for grand jury assistance is not authorized, the original and all copies of the material will be returned to the Chief.
### [9.5] 2.3.1.7 (09-30-1998) Procedures to be Followed if a Grand Jury Request is Declined by the Department of Justice
When an attorney for the government decides not to approve a request to initiate a grand jury investigation of potential tax violations and/or nontax (e.g., "pure" money laundering) violations, and the request does not contain grand jury information, the Service may conduct an administrative investigation
### [9.5] 2.3.2 (09-30-1998) Non-Tax Grand Jury Requests
The Chief (CI) has the authority to directly refer matters involving 18 USC 1956 and 1957 and Title 31 to the U.S. Attorney, pursuant to Service Delegation Order No. 158 (as revised). The procedures to follow for a money laundering (nontax) grand jury request are as follows: A Service initiated request for a money laundering (nontax) grand jury investigation will be made by letter from the Chief to the attorney for the government. (This excludes a request for violation of 18 USC 1956(a)(1)(A)(ii) which is tax related, and for which the procedures in 9.5.2.3.1 et seq. must be followed). The Chief will respond by letter to an attorney for the government seeking IRS participation in a money laundering (nontax) grand jury investigation. This letter should specify the name and TIN of each subject, other investigating law enforcement agencies, types of nontax charges involved, and years involved. All correspondence with the attorney for the government will be placed in the administrative investigative file. If this request contains any information governed by the grand jury secrecy provisions, the special agent must stamp or print on the top right hand corner of the letter the phrase: "Caution: This document contains secret grand jury information." The special agent will also place a cover sheet over the request which states: "This report contains secret grand jury information." A Grand Jury Access List, Form 9510, must be attached to all grand jury requests. Potential violations of Title 26 by persons outside of a money laundering grand jury investigation, discovered during a "pure" (non-title 26) money laundering investigation, must be segregated and investigated independently of the money laundering grand jury investigation. NOTE: If the Title 26 evidence is so interrelated to the money laundering investigation, then the attorney for the government must seek an expansion request in accordance with section 9.5.2.3.3 which follows. Delegation Order No. 143 authorizes the Chief to initiate Title 31 investigations of financial institutions other than banks and brokers or dealers in securities; (and the AC:CI to approve Title 31 subject investigations of banks and brokers or dealers in securities), so that CI may either initiate or agree to participate in such a criminal investigation.
### [9.5] 2.3.3 (09-30-1998) Grand Jury Expansion Requests
The attorney for the government conducting a tax grand jury investigation may request an expansion when additional subject(s), taxable period(s) or type(s) of tax are identified and approval is obtained by the Department of Justice, Tax Division. Department of Justice, Tax Division, Directive 86-59 permits the U.S. Attorney to expand an existing nontax grand jury to include Title 26 offenses, (except where the grand jury proceedings involve a multi-jurisdictional investigation or involve targets considered to have national prominence, such as public officials, political candidates, members of the judiciary, religious or labor leaders, news media representatives, and major corporations and/or their officers). Pursuant to this Directive, the U.S. Attorney may designate the subject(s), scope of the inquiry, and the tax period(s) to be investigated. However, the approval of the Department of Justice, Tax Division, must be obtained before the issuing an information or seeking the return of an indictment on tax matters. An attorney for the government seeking an expansion of either an existing tax or nontax grand jury investigation should make a request in writing to the Chief, which contains the subject's name, taxpayer identification number, other investigating law enforcement agencies, types of nontax charges involved, years involved, and probable tax violations, if any. The Chief will place the written request from the attorney for the government in the administrative file and route a copy to a Group Manager for assignment to a special agent. The special agent will then prepare/update Form 4930, and prepare a Form 9131 for the expansion request. In lieu of preparing the Form 9131, the expansion request can be transmitted with a special agent's prosecution report. Expansion requests will follow the same approval process as initial requests. NOTE: If the expansion request involves subjects in other IRS districts, the Chief, through channels, must secure the approval of the appropriate District Directors. Under exigent circumstances, expansion requests may be approved by the Department of Justice, Tax Division by telephone. However, written requests must already have been received by The Assistant Regional Counsel (Criminal Tax) before this procedure can be used. Within five (5) workdays of a telephonic approval, Counsel will forward written confirmation to the approving Department of Justice, Tax Division official, together with the expansion memorandum. This transmittal should contain an explanation of the exigent circumstances which warranted the telephonic procedure.
### [9.5] 2.4 (09-30-1998) GRAND JURY SECRECY
Rule 6 (e) of the Federal Rules of Criminal Procedure prohibits the disclosure of grand jury material or information, except as specifically authorized in subparagraph (3). The procedures listed in this section are designed to ensure that this Rule is not violated.
### [9.5] 2.4.1 (09-30-1998) Grand Jury Access List
A list of all Service employees who are expected to have access to grand jury information (including Counsel) will be attached as an exhibit to Form 9131, Request for Grand Jury Investigation. The list will be titled "Grand Jury Access List" , and will include the following statement immediately before the employee listing: "The following list contains the names and positions of all employees who have access to the grand jury information" . The list will include the Assistant Commissioner, Deputy Assistant Commissioner, and the Director, National Operations Division (CI). Thereafter, all persons who have access to the grand jury information, including telephonic access, must be made aware of the grand jury secrecy rules and must have their names added to the Grand Jury Access List. The employees listed on the initial Grand Jury Access List need not sign the list in order to have access to grand jury information. The Chief, DD, and DI will ensure that all employees under their control who have access to grand jury information are familiar with grand jury secrecy rules. The Group Manager may delegate the responsibility of maintaining the Grand Jury Access List to a special agent assigned to the grand jury investigation, but must ensure that the list is maintained timely and accurately. The Group Manager will provide the list to the attorney for the government upon request. Form 9510, Grand Jury Access List (Collateral) will be included with all grand jury collateral requests that contain or will result in grand jury information. The group manager in the district that initiates the grand jury collateral request may delegate the responsibility of issuing and maintaining Forms 9510 to a special agent assigned to the grand jury investigation, but must ensure that the personnel listed on each Form 9510 are added to the Grand Jury Access List. The Chief of the district that receives a grand jury collateral request will ensure that all personnel in the district having access to the grand jury information will sign Form 9510. The Chief may delegate this responsibility to the Group Manager.
### [9.5] 2.4.2 (09-30-1998) Access to Grand Jury Material by Internal Audit
A Memorandum of Understanding (MOU) dated March 8, 1991, sets out procedures for Internal Audit requests which involve matters investigated by a grand jury. It is reproduced in full at Exhibit 2-1. When Internal Audit makes a request involving a matter investigated by a grand jury, CI will immediately allow them to review all information obtained prior to the grand jury referral and all information obtained during the investigation which are not matters occurring before the grand jury. CI may consult Counsel if there is a question about classifying the information. CI will advise Internal Audit if full disclosure cannot be made of all items in the file because certain items fall within the scope of Rule 6(e). CI will describe in general terms the nature of the items (e.g., a transcript of testimony).
If | Then
Internal Audit believes that the items are not covered by Rule 6(e) and should be released | Internal Audit will make a specific request to CI limited to the items important to completing the audit.
CI still believes information cannot be released | The District Director (DD) will review the request and attempt to resolve the disagreement
the DD cannot resolve the matter | The DD will refer it to the Director of Investigations (DI) who will attempt to resolve it.
the DI cannot resolve it | District Counsel for the district will assist in resolving the matter, and may coordinate the issue with the U.S. Attorney's Office, and Assistant Regional Counsel (Criminal Tax) and/or Assistant Chief Counsel (Criminal Tax).
the matter is still unresolved | Assistant Chief Counsel (Criminal Tax), may refer the matter to the Department of Justice for final resolution.
### [9.5] 2.4.3 (09-30-1998) Civil or Non-Grand Jury Use of Grand Jury Material
Grand jury information may not be used for civil purposes unless the Service obtains the information independently of the grand jury or through a Rule 6(e) order. To prevent doubt about the origins of information available for civil use, the Group Manager should ensure the segregation of information prior to the receipt of any grand jury information and have such material clearly marked as non-grand jury. After the grand jury investigation begins, any information obtained independently of the grand jury should be kept separate and clearly identified as an independent source. In general, Service personnel who have received grand jury information subject to the secrecy provisions of Rule 6(e) will exclude themselves from involvement in non-grand jury matters concerning the individuals, entities, and subject matter of the grand jury information. The District Director will appoint a management official in the district to make determinations on civil matters involving the subject of a grand jury investigation. This official will not have access to any grand jury information. The Chief and other CI managers may not use grand jury information to direct a non-grand jury investigation.
### [9.5] 2.5 (09-30-1998) INVESTIGATIVE TECHNIQUES PECULIAR TO GRAND JURY INVESTIGATIONS
While assisting the attorney for the government, neither special agents nor revenue agents may solicit or seek information for other than criminal purposes. Requirements for the security of grand jury information are set forth in the Space Management Handbook. Some of the unique aspects to Criminal Investigation techniques peculiar to grand jury investigations are listed in the following subsections.
### [9.5] 2.5.1 (09-30-1998) Subpoenas
A subpoena is a writ issued by the authority of the court ordering an individual to appear at a specified date, time, and place to testify or to give evidence, or both, in a matter pending before the court. Subpoena Duces Tecum is a command to a witness to testify and to produce at a trial, a deposition, or a hearing, documents or papers in his possession that are pertinent to the issues of a pending case. (See Federal Rule of Civil Procedure 45 and Federal Rule of Criminal Procedure 17.) Service employees may not use Form 2039, Summons, under any circumstances in grand jury investigations. However, they may issue Form 2725, Document Receipt, when securing documents pursuant to a grand jury subpoena. A subpoena may be issued for grand jury investigative purposes and trial proceedings.
### [9.5] 2.5.1.1 (09-30-1998) Preparing And Serving Subpoenas
At the request of a government attorney, a special agent may become involved in the assistance of the preparation and service of subpoenas for witness testimony and for the production of books, papers, documents, or objects. The following suggestions may aid the special agent in assisting the Assistant United States Attorney: Review the subpoena for accuracy and content. Prepare and serve the subpoena as promptly as possible. Complete the Return of Service section, the Statement of Service Fees section, and the Declaration of Service section of the subpoena. Inform the government attorney of any circumstances which may affect the timely appearance of a witness, the production of documentary evidence or any difficulty in locating or serving a witness. Maintain a listing of all subpoenas requested, the date each was received, the date each was served, and the date each was returned to the court. Keep a log of the records provided by the witness and returned by that witness to the grand jury. Note any records which were requested by the subpoena but not provided. Request in the subpoena that the witness provide a letter referencing any documents requested by the subpoena but not provided. Keep a log of the records provided by the witness and turned over to the special agent in lieu of the witness' grand jury appearance. Note any records which were requested but not provided. Request in the subpoena that the witness provide a letter referencing any documents requested by the subpoena but not provided. Keep a log of the records in (g) above that are presented to the grand jury by the special agent. Prepare an inventory of records received to associate with the corresponding subpoena.
### [9.5] 2.5.1.1.1 (09-30-1998) Attendance of Witnesses in a Grand Jury or Trial Proceeding
Witnesses may be requested to submit to an interview by a special agent and/or an Assistant United States Attorney, in advance of testifying before a grand jury or a court, for purposes of reviewing their testimony and ascertaining whether the necessary documentary evidence is available. Witnesses should be given the maximum possible notice prior to their appearance so that the necessary travel accommodations can be arranged. The United States Attorney's office will provide guidance with respect to travel arrangements. The United States Attorney's office will provide guidance and direction relating to individuals who may or may not be served with a subpoena without prior approval by the United States Attorney's office or the Department of Justice.
### [9.5] 2.5.1.1.2 (09-30-1998) Subpoena For Production of Documentary Evidence
A subpoena may also request the person to whom the subpoena is directed to produce books, papers, documents, or objects deemed necessary to the investigation to present to the grand jury. The records may be provided to the special agent prior to the date set by the subpoena.
### [9.5] 2.5.1.1.3 (09-30-1998) Custodian of Records
Service of a subpoena to a third-party recordkeeper can be directed to the Custodian of Records for the business or corporation.
### [9.5] 2.5.1.2 (09-30-1998) Place of Service
In the United States: A subpoena directed to a witness for attendance at a court proceeding may be served at any place within the United States. Outside the United States: A subpoena requesting the appearance of a witness, who is a U.S. citizen residing in a foreign country shall be issued as provided in the Federal Rules of Criminal Procedure Title 28, USC, Section 1783.
### [9.5] 2.5.1.3 (09-30-1998) Failure To Comply
Failure to comply with the subpoena by any person, without an adequate excuse, may be viewed as a contempt of the court for the district in which it was issued or of the court for the district in which it issued if it was issued by a United States magistrate judge. (Rule 17 (g), Federal Rules of Criminal Procedure.)
### [9.5] 2.5.1.4 (09-30-1998) Return Of Documents To The Grand Jury
Books, papers, documents, or objects produced as a result of a grand jury subpoena must be presented to the grand jury for their information. Records provided to the special agent by the witness in lieu of the witness' grand jury appearance may be returned to the grand jury by the special agent.
### [9.5] 2.5.1.5 (09-30-1998) Disclosure Of Information
The subpoena is used to obtain documents and testimony in grand jury proceedings as well as to compel witness testimony at trial proceedings. Federal Rules of Criminal Procedure (F.R.C.P. 6(e)) prohibits the disclosure of information obtained through the grand jury. This information cannot be used in civil proceedings.
### [9.5] 2.5.2 (09-30-1998) Advice Of Rights In A Grand Jury Investigation
Service procedures for non-custodial advice of rights do not apply to grand jury investigations. The attorney for the government will provide instructions for advising subjects of their rights.
### [9.5] 2.5.3 (09-30-1998) Use Of IRS Credentials During A Grand Jury Investigation
Service employees may use their official Service credentials for identification purposes. When exhibiting their credentials, they should advise those contacted that they are acting as assistants to the attorney for the government in conjunction with a grand jury investigation.
### [9.5] 2.5.4 (09-30-1998) Use Of Informants In A Grand Jury Investigation
Information provided to the grand jury by an informant is grand jury information and cannot be included in non-grand jury Service files or disclosed to Service personnel not assisting the grand jury. When the attorney for the government asks a Service employee to direct the activities of an informant, the employee should follow the normal guidelines. The Service should immediately report to the attorney for the government any violation of instructions or law by an informant. If the attorney for the government asks the Service to make a payment to or on behalf of an informant, the special agent should prepare Form 8561, Request for Confidential Funds. The request should state that it contains grand jury information. The names of the approving officials should be added to the Grand Jury Access List.
### [9.5] 2.5.5 (09-30-1998) Collateral Requests Containing Grand Jury Information
For a collateral request that contains or will result in grand jury information, the group manager or a special agent assigned to the grand jury investigation will obtain prior approval from the attorney for the government. The collateral request will state that the request is part of a grand jury investigation governed by the secrecy provisions of Rule 6(e). The replying district will return the request and the information obtained with a transmittal memorandum that references Form 9510, Grand Jury Access List (Collateral). Both the requesting and the replying districts will follow the procedures set forth in the 9.5.2.4.1(5) (in this chapter) relating to the issuance of Form 9510. The replying district should not keep copies of the transmittal, the request, or the attachments.
### [9.5] 2.5.6 (09-30-1998) Consensual Monitoring In A Grand Jury Investigation
Special agents planning to use special investigative techniques such as monitoring or other investigative devices will follow the normal procedures. See the Chapter on Consensual Monitoring in CI's Handbook 9.4. The offices of the approving officials will provide the names of individuals who had access to the grand jury information contained in the requests and the reports required for these investigative techniques. The group manager will add the names to the Grand Jury Access List.
### [9.5] 2.5.7 (09-30-1998) Use Of Search Warrants In A Grand Jury Investigation
The attorney for the government will obtain approval for search warrants using Department of Justice and IRS procedures. See the Chapter on Search Warrants in CI's Handbook 9.4.
### [9.5] 2.5.8 (09-30-1998) Foreign Travel During Grand Jury Investigation
The attorney for the government must submit a written request to the Service for a special agent to travel to another country or to request information from a foreign country. See Chapter 2 on Domestic and Foreign Travel in CI's Handbook 9.11.
### [9.5] 2.5.9 (09-30-1998) Information Documents From Grand Jury Sources
Service employees may not prepare any information documents, such as Form 3949, Criminal Investigation Information Item, which contain grand jury information without a Rule 6(e) order.
### [9.5] 2.6 (09-30-1998) ADMINISTRATIVE PROCEDURES PECULIAR TO GRAND JURY INVESTIGATIONS
The following administrative procedures are peculiar to grand jury investigations.
### [9.5] 2.6.1 (09-30-1998) Control of Tax Returns
When a case has been referred for a grand jury investigation, CI will control all original tax returns and will establish TC 914 or TC 916 controls on all tax periods under grand jury investigation. The affected civil function(s) will transfer to CI all returns and administrative files for the periods under grand jury investigation. If returns for periods under grand jury investigation are located in other districts, the civil function with the returns will transfer the returns, together with all administrative files, to CI in the district where the grand jury is impaneled. The affected civil function will continue to control returns for any types of taxes and for any periods not being investigated by the grand jury.
### [9.5] 2.6.2 (09-30-1998) Responsibility for Civil Statutes of Limitation
If the tax returns under investigation were under the control of a civil function at the time CI's participation in the grand jury was authorized, the civil function (Exam or Collection) which transferred the returns to CI is responsible for the civil statutes of limitation. If there has been no civil involvement before the start of a grand jury investigation and a Rule 6(e) order has not been obtained, CI is not responsible for the civil statutes.
### [9.5] 2.6.3 (09-30-1998) Civil Actions During the Grand Jury Investigation
Before making a request for a grand jury investigation, the special agent must determine if any civil action is being taken or planned. If so, the District Director will notify the civil function taking the action as soon as the request has been approved. The affected civil function must suspend all civil activity, or receive permission to initiate any action during the grand jury investigation under the policy statement set forth in P-4-84. The District Director of the affected civil function will advise the Chief (CI) of a civil function's request to pursue any civil action. The Chief (CI) will discuss any proposed civil action with the attorney for the government. The attorney for the government will provide the Chief in writing with any reasons why a proposed civil actions may jeopardize the criminal investigation. The Chief (CI) will weigh the proposed civil action against the criminal investigation and make a recommendation to the District Director without disclosing any grand jury information. In the event that the civil function does not agree to suspend all civil activity, the procedures contained in P-4-84 should be followed.
### [9.5] 2.6.4 (09-30-1998) Disclosure Provisions Concerning State and Local Law Enforcement Involved in Grand Jury Investigations
Tax information obtained under IRC Section 6103 for use in a tax or a nontax federal grand jury investigation generally may be disclosed to federal officers and employees personally and directly engaged in the investigation. However, Section 6103 generally prohibits disclosure of tax information to State and local law enforcement personnel assisting the attorney for the government in such investigations. State and local personnel can be considered federal employees for disclosure purposes as long as those personnel are formally appointed as federal employees (rather than merely detailed), are assisting in a federal investigation, and are supervised by a federal employee. Such personnel would include, for example, special U.S. Attorneys, Special Deputy U.S. Marshals, and other persons formally appointed as federal employees under the Intergovernmental Personnel Act. Special Deputy U.S. Marshals are deputized by the U.S. Marshals Service. Other appointments are made by the U.S. Attorney's Office directing the grand jury investigation. State and local personnel deputized under Title 21, United States Code, Section 878 (21 USC 878) by the Drug Enforcement Administration or the U.S. Attorney's Office in a narcotics investigation may not have access to tax information because they are not considered federal employees for purposes of the disclosure laws. Once state or local personnel are formally appointed, they become subject to all the prohibitions on use and disclosure of tax information in the IRC, as well as subject to the penalties for unauthorized disclosures. When state and local personnel are formally appointed, they will be advised in writing of the disclosure restrictions and penalties for unauthorized disclosures. Exhibit 2-2 reflects the required content of such written notice.
### [9.5] 2.6.5 (09-30-1998) Attempted Bribery in Grand Jury Investigations
If an allegation or overture of bribery is made during a grand jury investigation, CI will inform Inspection and give them the name of the attorney for the government assigned to the investigation. CI will not give Inspection any other information during this initial report. CI will inform the attorney for the government of the incident and that it has been reported to Inspection pursuant to the Rules of Conduct. Inspection will contact the attorney for the government regarding the incident. Inspection will coordinate any subsequent investigation with the attorney for the government and CI.
### [9.5] 2.6.6 (09-30-1998) Reports and Closing Procedures in Grand Jury Investigations
The following sections contain information relating to reports and closing procedures in grand jury investigations.
### [9.5] 2.6.6.1 (09-30-1998) Final Report
At the end of the grand jury investigation, the special agent will prepare a final report similar to the final report in an administrative investigation and address it to the attorney for the government. If prosecution is recommended: the Chief will forward the report to Counsel for review (except in OCDETF and "pure" money laundering investigations). In OCDETF and "pure" money laundering prosecution reports, the Chief (CI) will make a direct referral to the attorney for the government. NOTE: Approval for indictment of any tax violations must be obtained by the attorney for the government from the Department of Justice, Tax Division. The special agent should prepare separate exhibit folders for documents governed by Rule 6(e) and clearly identify them as grand jury information. The Chief should not give copies of the report to any person not specifically on the Grand Jury Access List.
### [9.5] 2.6.6.2 (09-30-1998) Post-Closing Civil Actions
After all criminal matters have been concluded, CI will confer with the attorney for the government for the purpose of pursuing any civil action. If the attorney for the government agrees that civil action should be pursued, CI will seek Counsel's assistance in reviewing the information gathered for the purpose of pursuing civil action. If Counsel determines that civil action is warranted, Counsel will apply for a Rule 6(e) order to allow use of the grand jury information by the appropriate civil function(s). If the court grants the Rule 6(e) order authorizing full disclosure for civil purposes, the Chief will forward a copy of the SAR and supporting documents to the civil function. If a Rule 6(e) order cannot be obtained and the investigation has civil potential solely on the basis of non-grand jury information, the special agent will: consult with the attorney for the government to determine whether the information is non-grand jury information and can be disclosed; then, if disclosable, confer with Counsel to determine whether Service policy allows the information to be given to the appropriate civil division(s); then, if Counsel concurs, the Chief (CI) will transmit the non-grand jury information to the Chief of the affected civil function by memorandum, but will not refer to the grand jury investigation nor refer to nor draw conclusions based on grand jury information.
### [9.5] 2.6.6.3 (09-30-1998) Disposal of Records
If civil action is not to be pursued, or if the special agent's report does not recommend prosecution, and the attorney for the government returns records to the Service for disposition, or directs the Service to dispose of other grand jury records, the special agent should: document how the records are to be disposed of, secure the approval of the attorney for the government, retain the record of disposition in the office files. As a general rule, third party records should be returned to their owners; records which are to be retained should be stored in accordance with existing Service guidelines; and records which are to be destroyed should be shredded or incinerated.
### [9.5] 2.6.6.4 (09-30-1998) Notification of Counsel
The special agent should notify the designated Counsel attorney (if applicable) that the investigation was concluded without a prosecution recommendation.
### [9.5] 2.7 (09-30-1998) LISTS OF AUTHORITY FOR REQUESTING GRAND JURY INVESTIGATIONS
Department of the Treasury General Counsel Order No. 4; Department of the Treasury Order No. 150-23; Department of the Treasury Order No. 150-100; Department of the Treasury Order No. 150-13; Tax Division Directive No. 86-59; Internal Revenue Service Delegation Order No. 143; Internal Revenue Service Delegation Order No. 206.
Exhibit [9.5] 2-1 (09/30/98)
MEMORANDUM OF UNDERSTANDING CONCERNING ACCESS TO GRAND JURY MATTERS FOR INTERNAL AUDIT PURPOSES

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(1) | The purpose of this Memorandum of Understanding is to set forth the understanding between the Chief Operations Officer, the Office of Assistant Commissioner (Criminal Investigation), the Office of Chief Inspector and the Office of Chief Counsel, regarding the ability of the Internal Audit Division to gain access to non-grand jury and grand jury related materials.
(2) | Additionally, this memorandum sets forth the responsibilities and duties of the Criminal Investigation Division personnel in the Districts, in regard to assisting the Internal Audit Division in carrying out those duties. This memorandum also sets forth procedural guidance for resolving disputes over the proper classification of evidentiary matters as grand jury or non-grand jury materials and the release of same to the Internal Audit Division.
(3) | All District and Internal Audit Division employees are reminded that they must work together in a cooperative effort to ensure their responsibilities are carried out in a smooth, efficient and professional manner.
(4) | All functions must keep in mind that these guidelines are intended to assist them in fulfilling their responsibilities in helping the Commissioner carry out the mission of the Service ". . .to collect the proper amount of tax revenue at the least cost. . .and perform in a manner warranting integrity, efficiency and fairness. . .." Background:
(5) | The Internal Audit Division has a vital function in helping ensure that the Service fulfills its purpose and mission. Part of the duties of the Internal Audit Division involve reviewing staffing and budget allocations and operations relating to criminal investigations.
(6) | In order for the Internal Audit Division to carry out its role, it is at times necessary for employees assigned to that Division to review case files and reports relating to open and closed files of investigations and all other matters conducted by the Criminal Investigation Division. However, because a significant percentage of criminal investigations are being conducted by the Criminal Investigation Division under the auspices of a grand jury, Internal Audit Division has experienced problems in accomplishing its mission.
(7) | The Internal Audit Division has indicated that they have been denied access to files which were at some point under the auspices of a grand jury. As a result, the Internal Audit Division is unable to conduct a complete review of relevant operations. When this occurs Internal Audit must issue a qualified report based upon scope impairment. Because such reviews often relate to operational and integrity issues such reports are disfavored.
(8) | Criminal Investigation is concerned that disclosure of the grand jury files to the Internal Audit Division would violate Rule 6(e) of the Federal Rules of Criminal Procedure and, possibly, subject their personnel to potential contempt sanctions under that Rule.
(9) | All parties to the agreement understand that gaining access to such files implicates an extremely sensitive area of the law and may require consultation with the local United States Attorney who had the responsibility for conducting the grand jury investigation. The Internal Audit Division shall endeavor to not cause a violation of Rule 6(e) by Criminal Investigation personnel. Criminal Investigation personnel will afford as much cooperation and assistance to the Internal Audit Division as possible; and, shall apply a uniform approach to disclosure of matters within their possession involving grand jury referred cases, i.e. the same standard will apply to disclosures to the Internal Audit Division as apply to disclosures to Examination.
(10) | The balance of this memorandum sets forth the internal guidelines to be followed when the Internal Audit Division needs to gain access to files containing grand jury information. General Guidelines:
(11) | 1. All personnel are directed to fully comply with the requirements of Rule 6(e) of the Federal Rules of Criminal Procedure. Rule 6(e) clearly and expressly states that government personnel may only receive "matters occurring before the grand jury" for the purpose of assisting "an attorney for the government in the performance of such attorney's duty to enforce federal criminal law" . Fed. R. Crim. P. 6(e)(3)(B). Pursuant to this provision, the "attorney for the government" (typically the Assistant United States Attorney) may obtain the services of IRS personnel, including Special Agents, Office of Chief Counsel attorneys, and Internal Audit Division agents, to assist him/her in the enforcement of the federal criminal law. This memorandum does not address such situations. Rather, it concerns the disclosure to Internal Audit Division personnel for purposes independent of assisting the "attorney for the government" in the performance of such attorney's duty to enforce the federal criminal law. In this regard, employees should be aware that a government employee who discloses grand jury matters for purposes other than criminal law enforcement has violated Rule 6(e) and "knowing violations of Rule 6(e) may be punished as a contempt of court" . Rule 6(e)(2). Therefore, it is understood that employees of the Internal Revenue Service, subject to the exceptions set forth in Rule 6(e), are not permitted to receive or review matters which are actually matters occurring before the grand jury.
(12) | 2. All parties understand that evidence which is clearly within the scope of Rule 6(e) shall not be disclosed except in a manner which complies with Rule 6(e). Examples of items which are generally considered to be matters occurring before the grand jury and which can not be disclosed include: transcripts of witnesses testimony; target identification data; witness data; and, grand jury subpoena data.
(13) | 3. Items which are not matters occurring before the grand jury within the meaning of Rule 6(e) shall be made available for review by the Internal Audit Division upon request.
(14) | 4. Members of the Criminal Investigation Division will comply with the requirement that evidence which is not grand jury material is to be segregated and labeled as such in accord with relevant IRM Guidelines. Such evidence may be turned over for further use by Internal Audit Personnel. Typically, such evidence would include evidence which was obtained, or records prepared, prior to a referral of an investigation to the grand jury. In instances where the I.R.M. Guidelines have not been followed, and Internal Audit requires access to such case files, Criminal Investigation personnel shall expeditiously act to segregate the materials. Those items which are not matters occurring before the grand jury may then be shared with the Auditors.
(15) | 5. Other items, in addition to evidence which was obtained prior to a grand jury referral, may be disclosed without violating Rule 6(e). The mere fact that items were obtained or produced during the course of a grand jury investigation does not automatically mean that those items are subject to the rule of secrecy set forth in Rule 6(e). Examples of items which can be disclosed without violating Rule 6(e) include such things as: public information; manpower allocation and budget allocation data; surveillance reports; reports of undercover activity; and, notes of interviews which took place outside of the grand jury that do not contain substantive references to what is transpiring within the grand jury.
(16) | 6. In many situations the determination of whether an item of information is within Rule 6(e) is not easily resolved. As general guidance, Criminal Investigation Division and Internal Audit Division personnel may look to LGM, CT-3 "In Re: Grand Jury Evidence-Matters Occurring Before A Grand Jury," which is incorporated herein by reference, and may consult Counsel as required.
(17) | 7. All personnel are reminded that the ultimate decision as to the release of evidence acquired during the pendency of a grand jury may, at times, fall within the purview of the United States Attorney's office. Therefore, the Internal Audit Division may be required to seek permission, with the assistance of the District Director, from the appropriate United States Attorney's Office to have access to the desired material.
(18) | Procedural Guidelines: In the event a request for materials is made and such request involves a matter investigated by a grand jury, the following procedures shall be followed:
(19) | 1. Criminal Investigation Division personnel shall promptly grant Internal Audit Division personnel the opportunity to review all materials which were obtained prior to the grand jury referral and all items which were obtained or produced during the grand jury investigation which are not matters occurring before the grand jury. Counsel will be available at all levels in this process to provide legal advice on questions regarding the classification of grand jury materials.
(20) | 2. The Criminal Investigation Division shall inform the Internal Audit Division of the fact that full disclosure of all items in their file is not possible because they are of the belief that certain items are within the scope of the rule of grand jury secrecy. The Criminal Investigation Division shall also, in very generic terms, advise the Internal Audit Division of the nature and type of items not being released, e.g. a transcript of a person's testimony.
(21) | 3. In the event the Internal Audit Division believes that the items not being released should not be restricted by Rule 6(e) and are of importance to them in completing their investigation and duties, the Internal Audit Division shall so advise the Criminal Investigation Division and request that the Criminal Investigation Division disclose such items. The Internal Audit Division shall tailor any such requests in specific terms and in as narrow a fashion as possible.
(22) | 4. Upon receiving such a request, the Criminal Investigation Division shall promptly reconsider its decision not to release the requested items and shall inform the Internal Audit Division of its position.
(23) | 5. In the event that the Internal Audit Division disagrees with the decision of the Criminal Investigation Division the Internal Audit Division shall bring the issue to the attention of the appropriate District Director and shall solicit the District Director's assistance in resolving any such impasses.
(24) | 6. In the event that the District Director and the Internal Audit Division can not reach agreement, they may, in turn, raise the issue to the attention of the appropriate Regional Commissioner and shall solicit the Regional Commissioner's input in resolving any disagreements.
(25) | 7. In the event any of these procedures require legal determinations on whether the materials in dispute are, or are not, grand jury materials, Counsel may be consulted to assist in resolving the issue. It is also suggested that the Counsel attorney involved in the grand jury matter be consulted as that attorney may be in the best position to review the evidence in question. The Counsel attorney may coordinate as necessary with the United States Attorney's office, the Deputy Regional Counsel (Criminal Tax), and the Assistant Chief Counsel (Criminal Tax).
(26) | 8. All parties involved in such disputed matters will treat these matters as priorities and shall provide an expedited review of such issues.
(27) | 9. It is anticipated that most disagreements over what is and is not grand jury matters will be resolved at the lowest level possible with appropriate legal advice being provided at the district level. However, if such matters can not be resolved or there is disagreement with a determination made by the local United States Attorney, the matter may be brought to the attention of the Assistant Chief Counsel (Criminal Tax). The Assistant Chief Counsel (Criminal Tax) may in turn, if unable to resolve the matter, refer the matter to the Department of Justice for final resolution.
(28) | _____ /s/ Teddy R. Kern | Chief Inspector (I)
(29) | _____ /s/ David G. Blattner | Chief Operations Officer (COO)
| _____ /s/ David B. Palmer | for Assistant Commissioner (CI)
| _____ /s/ Barry J. Finkelstein | for Associate Chief Counsel (L)
(30) | Date: March 8, 1991
Exhibit [9.5] 2-2 (09/30/98)
STATEMENT REGARDING USE AND DISCLOSURE OF FEDERAL TAX INFORMATION BY STATE OR LOCAL GOVERNMENT EMPLOYEE APPOINTED TO ASSIST A FEDERAL GRAND JURY INVESTIGATION

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(1) | STATEMENT REGARDING USE AND DISCLOSURE OF FEDERAL TAX INFORMATION BY STATE OR LOCAL GOVERNMENT EMPLOYEE APPOINTED TO ASSIST A FEDERAL GRAND JURY INVESTIGATION
(2) | I understand that I have been formally appointed pursuant to (U.S. CODE SECTION UNDER WHICH APPOINTED) to assist in a Federal Grand Jury Investigation and that because of this appointment I am considered a Federal employee for Federal tax information disclosure purposes.
(3) | I understand that during the course of this appointment I may receive Federal tax information under Section 6103(h) or (i) of the Internal Revenue Code.
(4) | I understand that such information is provided solely for use in the Federal Grand Jury Investigation in which I am assisting and related Federal judicial or administrative proceedings, and for no other purpose.
(5) | I specifically understand that such information may not be used or disclosed for state or local law enforcement.
(6) | I understand that the willful, unauthorized disclosure of Federal tax information is a crime (felony) under Section 7213(a) of the Internal Revenue Code punishable by a fine of not more than $5,000, or imprisonment of not more than 5 years, or both, together with the costs of prosecution. Such disclosure may also give rise to civil liability under Internal Revenue Code Section 7431.
(7) | (Signature)
(8) | Name:
(9) | Title:
(10) | Address:
(11) | Department:
### Internal Revenue Manual | ### Hndbk. 9.5 Chap. 2 GRAND JURY INVESTIGATIONS | ### (09-30-1998)

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