Authorization. All search warrants where a special agent is the affiant must be approved by the respective SAC or DFO prior to execution. The SAC or DFO is required to obtain the advice and assistance of Counsel in the preparation and review of all search warrant applications prior to referring them to the appropriate Department of Justice (DOJ) official for authorization.

DOJ authorization. Pursuant to Tax Division Directive No. 52 PDF (revised March 17, 2008), the Tax Division has delegated to U.S. Attorneys the authority to approve certain Title 26 or tax-related Title 18 search warrants directed at the offices, structures, premises, etc. owned, controlled, or under the dominion of the subject or target of a criminal investigation. The Tax Division retains exclusive authority, however, to approve search warrants directed at the offices, structures, or premises owned, controlled or under the dominion of a subject or target of an investigation who is:

Investigations involving third parties. The Tax Division also retains exclusive authority to approve the use of search warrants in criminal investigations involving disinterested third parties, with the exception of:

Significant case policy. It is the policy of the IRS and the Tax Division that search warrants will be utilized with restraint and only in significant criminal tax cases. The significance of a criminal tax case may be determined by considering such factors as:

Sensitive Search Warrants. The SAC is required to obtain the concurrence of the respective DFO for the execution of a search warrant directed at offices, structures or premises owned or controlled by one of the following:

Sensitive search warrant applications must be forwarded to the office of Associate Chief Counsel (CT) for review prior to being forwarded to the DFO. All other search warrant applications are reviewed by field Criminal Tax attorneys and/or Area Counsel prior to being forwarded to the SAC.

Upon receipt of a search warrant application, Counsel must review the warrant and supporting documentation and prepare a memorandum for the SAC or DFO, evaluating investigative necessity, legal sufficiency, and policy compliance. See Exhibit 38.3.1-10.

In all cases, Counsel's memorandum must evaluate whether the three-pronged probable cause test is met. The facts enumerated in the affidavit should clearly establish there is probable cause to believe:

Counsel’s memorandum must also evaluate whether the warrant and supporting documentation describe the location to be searched and the items to be seized with sufficient particularity.

In tax and tax-related investigations, Counsel must review Criminal Investigation’s explanation in Form 13739, Enforcement Action Review Form, of why a search warrant is the least intrusive means available for obtaining the evidence sought. To assist the SAC or DFO in determining whether the "least intrusive means" requirement has been met, Counsel’s memorandum should address whether there are other means available to obtain the records, e.g., whether the taxpayer would provide the records upon request, whether a summons or subpoena could be used to obtain the records, and whether the records could be obtained from a third party.

After the execution of a tax or tax-related search warrant in which a special agent is the affiant, the field Criminal Tax attorney who reviewed the warrant package will review the inventory prepared by Criminal Investigation to determine whether the items seized were within the scope of the warrant and prepare a memorandum to the SAC.

If the Criminal Tax attorney identifies any issue with respect to the inventory or the scope of the seizure, he/she should consult with Criminal Investigation and the prosecutor involved in the investigation to discuss and resolve the issue. The Criminal Tax attorney should attempt to resolve any such issues prior to drafting the inventory review memorandum to the SAC. If any issues cannot be resolved by speaking with the case agent and the supervising prosecutor, the attorney should consult with his/her Area Counsel and the SAC prior to drafting the inventory review memorandum.

The Area Counsel will review, approve, and sign the inventory review memorandum. If signature authority has been delegated to the field Criminal Tax attorney who reviewed the warrant, the Area Counsel should be provided a copy of the memorandum for post review.

The following is a suggested checklist for reviewing affidavits and warrants:

In some instances, evidence may be presented to the IRS by other federal agencies, or by state or local authorities that obtained the evidence through a search or arrest warrant, pen register, or wiretap. Counsel attorneys should evaluate the admissibility of such evidence before Criminal Investigation relies upon and includes the evidence in its search warrant affidavits.

Search warrant affidavits advancing a permeated-with-fraud theory should include a detailed discussion of the information supporting this theory.

Although the content and style of each memorandum must be tailored to the facts of the specific case, Counsel’s written undercover review should contain the information discussed in this subsection.

Criminal Subject(s)/Introductory Paragraph. This section should contain the name/title of the subject/target of the investigation, along with their address. When applicable, the address of where the undercover operation will occur should be listed. The undercover operation should be identified as Group I or Group II, as well as the category under which it falls. The paragraph should state whether the proposed operation meets/does not meet the requirements of IRM § 9.4.8.4(3)(a). Additionally, whether or not the operation raises an issue of entrapment should be stated. If the proposed operation raises an issue of entrapment, add an explanatory sentence, e.g. the evidence fails to establish that the target was predisposed to commit this crime as well as any other noteworthy concerns.

Scope of CT Review. This section should state that IRS-CI is required to consult Counsel in all undercover operations. It should also state Counsel’s role is to render legal advice on all aspects of the operation, as well as to attend all pre-operational and operational meetings. CCDM § 38.1.1.4(4) and CCDM § 38.1.1.4(5).

Standard of Review. This section should mention that Counsel must determine whether the information obtained to date would lead a reasonable person to believe the target is in violation of the law. IRM § 9.4.8.4(3).

Executive Summary. The Executive Summary should provide a succinct summary of the case, including the identity of the target, a description of the criminal conduct that gives rise to the anticipated criminal violations, and the years involved.

Facts. This section should provide a fact neutral description of the investigation to date, avoiding legal conclusions and/or verbatim copying of IRS-CI’s Undercover Memorandum. This section should specifically identify the origin/source of the case, the source of the information on which the undercover operation is to be based, and whether the target is represented by counsel. If the source of the case is a confidential informant, address the informant’s trustworthiness, past criminal history, and corroboration of information provided. Additionally, this section should include whether the informant will be compensated, the potential need for an MOU; and, if the informant has criminal exposure, whether or not those issues have been resolved, e.g., through a written cooperation agreement. Also, if applicable, discuss whether the information provided is tainted, e.g., attorney-client privilege. Provide background information of all applicable individuals/entities involved in the investigation. Insert subsections to enhance the presentation of factual details, if necessary.

Targeting Criteria. This section should indicate whether the proposed undercover operation meets the pre-approved Targeting Criteria for the specific type of undercover operation.

Proposed Operation. This section should describe the proposed undercover operation and identify a clear alignment between the crime articulated and the proposed plan of action. This is to insure IRS-CI does not engage in indiscriminate surveillance. The specific criminal code sections IRS-CI believes the target has violated should be stated. When applicable, discuss undercover equipment to be used and whether a confidential informant will be used, noting the individual’s role, if any, in the scheme. Additionally, note whether using that individual could jeopardize the operation and/or investigation.

Objectives. This section should list the objective of the undercover operation provided in IRS-CI’s Undercover Memorandum. If too many objectives are listed, suggest narrowing the operation to meet fewer objectives. Make sure the plan of action aligns with the objectives of the operation.

Analysis. This section should address the Reasonable Person Standard of Review and Entrapment.

Brady, Giglio and Other Evidentiary Issues/Suggestions. This section should analyze the undercover operation from an evidentiary perspective. Counsel should consider how likely the operation is to generate Brady/Giglio material. Those considerations should be balanced with the probative value of any evidence generated by the undercover operation. This section should also address any other issues that are presented or may arise in the undercover operation. This is not to suggest that by advising against an undercover operation the intent is to deprive the target of his rights to present exculpatory material in good faith. The Brady/Giglio analysis referenced here typically comes into play when there is reason to believe that a crime has been committed, but based upon the plan of action, there is a risk that the target will make false exculpatory statements.

Conclusion. In this section, clearly state Counsel’s opinion as to whether the proposed undercover operation is legal/not legal, whether it raises/does not raise any issues of entrapment and whether it satisfies the reasonable person standard. If the proposed operation raises an issue of entrapment, repeat the explanatory sentence from the beginning of the memo. Include a request that Counsel be notified of any pre-operational meetings.

Under 18 U.S.C. § 2516 (Title I), courts may authorize electronic interception of the contents of wire and oral communications during the investigation of specific criminal offenses, which are listed in the statute.

Statutes and IRS policy prohibit non-consensual monitoring of oral and wire communications for Title 26 purposes; however, the Service may receive Title I information. Law enforcement officers who obtain wiretap evidence are permitted to turn such evidence over to other law enforcement officers for the latter’s use and special agents are considered investigative or law enforcement officers to whom information may be disclosed. Law enforcement officers are permitted to use wiretap evidence in their official duties, such as issuing summonses, investigating tax offenses or preparing special agent reports. 18 U.S.C. § 2517.

Law enforcement officers are also permitted to use the evidence in a grand jury, in court or any other proceeding, or they may disclose it via testimony. Prior to such use, however, the law enforcement officers must obtain a derivative use order that must be based upon the court’s finding that the evidence of the nonspecified crime (i.e., tax offense) was otherwise (or properly) intercepted. Failure to obtain such an order can result in dismissal of the case or liability for civil damages due to unauthorized disclosure. The derivative use order should be obtained as soon as practicable.

The Criminal Tax attorney reviews the validity of the Title I order and so advises the SAC in a memorandum. The US Attorney’s office obtains the appropriate derivative use order for Criminal Investigation.

An electronic communication is any transfer of signs, signals, writing, images, sounds, data, or intelligence of any nature transmitted in whole or in part by a wire, radio, electromagnetic, photoelectronic, or photooptical system that affects foreign or interstate commerce. See 18 U.S.C. § 2510(12). Electronic communications do not include wire or oral communications, communications through a tone-only paging device, communications from a tracking device, or electronic funds transfer information stored by a financial institution. Examples of electronic communications include communications through digital/display pagers, electronic mail (email), and fax transmissions.

Section 2516(3) of Title 18 of the United States Code allows for the interception of electronic communications when such interception may provide or has provided evidence of any federal felony, including Title 26 offenses. To intercept such communications, electronic communication intercept orders must be based upon an application and an affidavit. The Criminal Tax attorney evaluates these affidavits for factual and legal sufficiency and prepares a memorandum for review by the Area Counsel. Once the Area Counsel approves the memorandum, it must be forwarded to the Associate Chief Counsel (CT) for final approval and signature. Once signed by the Associate Chief Counsel (CT), the memorandum will be returned to the Area Counsel for dissemination to Criminal Investigation.

To ensure uniformity, applications for the interception of fax transmissions and pagers must be approved by the same DOJ officials who approve wire and oral interception applications and must comply with the procedures provided in 18 U.S.C. § 2518. Consequently, applications for pagers and facsimile transmissions should be coordinated through the office of Associate Chief Counsel (CT).

Definition. Consensual monitoring occurs when at least one party to a conversation agrees to have the conversation monitored using a device, such as a body bug, telephone bug (suction cup), room bug, or video bug. Because a party to the conversation consents to the recording of it, this activity does not implicate Title I. Consensual monitoring can take two forms: telephonic and non-telephonic. Neither form requires a court order, but prior DOJ or US Attorney approval is required.

Full Consent. If all participants consent to monitoring, authorization is unnecessary, regardless of whether it is telephonic or non-telephonic monitoring. See IRM 9.4.7, Consensual Monitoring.

Partial Consent. In telephonic and non-telephonic monitoring, if less than all participants consent to the monitoring, authorization must be obtained. See IRM 9.4.7, Consensual Monitoring.

Telephonic Monitoring. A Form 8041, Request for Authorization to Use Electronic Equipment and Consensual Monitoring, is used to request approval for telephonic monitoring. The request must be in writing before authorization is granted; however, if time does not permit, the request may be oral, with Form 8041 being submitted at the earliest practical time. The SAC has the authority to approve the requests and this authority may not be delegated. The Criminal Tax attorney will assist Criminal Investigation personnel when questions arise and review for legal sufficiency.

Non-telephonic Monitoring. To obtain authorization for non-telephonic monitoring, requests must be in writing on Form 8041. Oral requests are allowed if there is a bona fide emergency, but these must be confirmed in writing within two working days after the oral request is made. The form must note approval by an attorney for DOJ or the US Attorney’s office, along with his/her name and position. The Criminal Tax attorney will assist Criminal Investigation personnel when questions arise and review for legal sufficiency.