Requests for enforcement of summonses (except those specifically required to be forwarded to the Office of the Associate Chief Counsel (Procedure & Administration) or to the Tax Division) will be forwarded directly to the U.S. Attorney.

Requests for civil enforcement of summonses may also be sent directly to the U.S. Attorney where a summons has been issued to a financial institution and neither the financial institution nor noticee has raised any defense to enforcement, and where any defenses raised are merely procedural and not substantive (e.g., defective service, failure to give notice, etc.). Frivolous constitutional defenses are not considered substantive and may be referred directly to the U.S. Attorney. In cases where there is doubt as to whether the defense is frivolous, the request for enforcement should be sent to the Tax Division. Defenses of the frivolous nature contemplated by this paragraph include but are not limited to:

With respect to examination or collection summonses referred directly to the U.S. Attorney, where enforcement is sought under IRC 7604(b), U.S. Attorneys are instructed that the approval of the Tax Division is required. U.S. Attorneys do not have to obtain prior authorization from the Tax Division to institute summons enforcement proceedings with respect to summonses issued by Examination and Collection, except where individual taxpayers or others have refused to produce records and have invoked the privilege against self-incrimination under the Fifth Amendment of the Constitution.

Requests for civil enforcement of summonses issued by Small Business / Self-Employed (SB/SE), Large Business & International (LB&I), Tax Exempt And Government Entities (TEGE) or Criminal Investigation (CI) will require reference through the Office of the Associate Chief Counsel (Procedure & Administration), if Field Counsel approves the request for enforcement in the following situations:

Except as provided above with respect to designated and related summonses, after review and approval by Procedure & Administration, all approved summons enforcement requests will be forwarded to the Tax Division. Those disapproved will be returned to the originating Field Counsel office. The Tax Division will prepare and file the necessary pleadings. Enforcement applications will usually take the form of orders to show cause why the summons should not be complied with.

Requests for civil enforcement of summonses issued by the Criminal Investigation Division (except those specifically required to be forwarded to Procedure & Administration (see CCDM 34.6.3.3.2, above), or allowed to be forwarded directly to the U.S. Attorney (see CCDM 34.6.3.3.1, above)), should be sent to the Tax Division. Requests for civil enforcement of summonses issued by SB/SE, LB&I, TEGE and Criminal Investigation where the summons was issued to a financial institution, and where substantive defenses other than procedural defenses have been raised (see CCDM 34.6.3.3.2 above), shall also be sent to the Tax Division.

DOJ requires that all summons enforcement actions against attorneys be referred to the Tax Division and approved by the Assistant Attorney General regardless of the type of information being sought in the summons. This includes summonses issued to attorneys for purposes of obtaining client-related information or summonses issued to attorneys for obtaining information regarding the attorneys’ own tax liabilities. The same policy applies where a summons has been served on an attorney and the taxpayer files a Petition to Quash.

If a request for enforcement of a summons may be referred directly to the Tax Division, the following procedures may be followed. A letter, containing adequate discussion of all relevant law and facts, is sent to DOJ, Attn: Civil Trial Section, ___Region, and is signed on behalf of the Chief Counsel by the Area Counsel or his/her delegate, with distribution as follows:

Instructions in CCDM 34.6.3.3.2 (3)-(7) above should be followed.

A district court judge may designate a magistrate to conduct hearings (including evidentiary hearings) and submit to a judge of the court proposed findings of fact, conclusions of law, and recommendations for disposition. 28 U.S.C. § 636. It is beyond the magistrate’s enumerated powers to render a final decision. But, pursuant to the 1979 Magistrate Act, 28 U.S.C. § 636(c), a magistrate, upon consent of the parties, may conduct hearings and render final decisions.

Whenever a proposed recommendation rendered by a magistrate is adverse to the position asserted by the Government, a request may be received from DOJ for the Chief Counsel’s views as to the advisability of filing objections to the findings of fact and conclusions of law.

Frequently, an adverse recommendation will be brought to Field Counsel’s attention locally by the court, the Area Director, or the U.S. Attorney. In many instances, Field Counsel may have knowledge of the adverse decision because of prior work in connection with the case.

After learning of an adverse recommendation, Field Counsel will immediately consider the matter and prepare a letter on Area Counsel stationery addressed to the U.S. Attorney or Assistant Attorney General, Tax Division, as appropriate.

This letter will contain a legal analysis and a recommendation as to the advisability of filing and prosecuting an objection from the magistrate’s recommendation, giving due effect to the facts and law applicable to the case.

It is important that Field Counsel consider the record in reaching a conclusion as to the position the office should adopt, i.e., is the Government’s position set out clearly and supported by competent testimony and documentary evidence?

The letter will recommend for or against making an objection and will be signed on behalf of the Chief Counsel at the field level.

Time Limitations. Generally, a party has ten days from being served with a copy of the magistrate’s findings and recommendation to file and serve written objections. 28 U.S.C. § 636. When objections are filed within the 10-day period, "… A judge of the court shall make a de novo determination of those portions of the report or specified proposed findings or recommendations to which objection is made." (28 U.S.C. § 636(b)(1).) Field Counsel should take necessary precautions to ensure that the date for filing objections is observed. If necessary, the U.S. Attorney should be contacted for purposes of seeking an extension of time for filing the notice of objection. Such action should be cleared by telephone with the Tax Division, as appropriate.

In the event no objections are filed, the court remains under a duty to review the magistrate’s proposals because those proposals are not self-operative. The nature of that review will vary with the circumstances, and the court has the discretion to determine the extent to which it will review the matter. At least a minimal review is necessary because only a court order can put the proposal into effect. Webb v. California , 468 F. Supp. 825 (E.D. Cal. 1979).

An enforcement of a summons case should be closed under the following conditions:

The First Amendment is sometimes raised as a defense (1) to compliance with summonses and (2) in investigations and requests for injunctive relief for violations of sections 6700 and 6701. Not all speech is protected speech. Two types of unprotected speech are implicated in this context: false commercial speech and speech that aids or abets unlawful conduct.

When government action is challenged on First Amendment grounds, the permissibility of the action will depend on whether the communication or expressive conduct is protected speech. Speech penalized under sections 6700 and 6701 is not protected speech. Because speech and conduct penalized by these sections is not eligible for First Amendment protection, the speech and conduct can be enjoined under sections 7402, 7407, or 7408. Section 6700 generally penalizes persons who organize or participate in selling a plan or entity, and who state that investing in the plan or entity will confer a tax benefit, while knowing or having reason to know that the statement is false or fraudulent as to a material matter. Its purpose is to penalize persons who promote abusive tax shelters. Section 6701 generally penalizes persons who aid or assist in preparing a return or other document (or portion thereof), while knowing or having reason to believe the document will be used in connection with a material matter arising under the tax laws, and while knowing that if the document is so used, it will result in the understatement of another person’s tax liability. Speech that violates these provisions can be false speech made in a commercial context and/or speech that aids or abets unlawful actions. Nevertheless, abusive tax shelter promoters and others who disseminate false tax information will at times raise the First Amendment as a defense to summons enforcement or to the government’s request for injunctive relief.

In circumstances in which a First Amendment privilege may be raised, field Counsel may be asked to assist the client with several matters, which include (1) describing the basic principle underlying the privileges of free speech and association, (2) distinguishing between speech that is and is not protected by the First Amendment, (3) evaluating the evidence to defend against a claim of First Amendment privilege, and (4) drafting the summons or injunction request. IRM 34.6.3.4.1(4) below describes categories of speech not protected by the First Amendment.

The First Amendment to the United States Constitution prohibits the government from “abridging the freedom of speech.” Accordingly, the First Amendment protects a person’s right to express and explore ideas and to associate with others to do so. The privilege includes the right to utter, print, distribute, receive, read, inquire about, contemplate, and teach ideas, regardless of the medium in which the ideas are expressed. The law does, however, distinguish between protected speech and unprotected speech. In the tax context, protected speech includes statements and discussions about the tax laws, whether true or not, including frivolous constitutional arguments. A person or group is free to profess and discuss virtually any erroneous, frivolous argument about the tax laws or their application, even if the discussions perpetuate false ideas and information about the tax laws. These types of protected speech do not, without more, violate any law. However, false commercial speech, speech that aids or abets unlawful conduct, and speech that incites imminent lawlessness are categories of speech not protected by the First Amendment. Thus, whether false speech about the tax laws is or is not protected depends on the context in which it occurs.

Field Counsel and Procedure & Administration will provide pre-issuance review of any informal document requests (IDR) or summonses that seek tax accrual or other audit workpapers. This will ensure that the procedures of IRM 4.10.20, Requesting Audit, Tax Accrual, or Tax Reconciliation Workpapers, are followed. These procedures do not apply to Criminal Investigation summonses.

Tax accrual workpapers and audit workpapers are defined in IRM 4.10.20.2, Audit Workpapers, Tax Accrual Workpapers, and Tax Reconciliation Workpapers Defined.

In general, audit or tax accrual workpapers will be requested only in unusual circumstances. This standard, described in IRM 4.10.20.3.1, Unusual Circumstances Standard, applies to all requests for tax accrual workpapers that do not involve a listed transaction as defined in Treas. Reg. § 1.6011-4, to any request for tax accrual workpapers involving a listed transaction for returns filed on or before February 28, 2000, and to requests for any audit workpapers other than tax accrual workpapers.

In 2002, the Service modified its historical policy of restraint in requesting tax accrual workpapers. In general, the modified policy applies to returns filed by taxpayers claiming benefits from listed transactions. Announcement 2002-63, 2002-2 C.B. 72. A listed transaction is defined in Treas. Reg. § 1.6011-4, and subsection (b)(2) defines listed transactions to include substantially similar transactions. The Service’s policies governing requests for tax accrual workpapers in listed transaction circumstances vary according to when the tax return was filed, as described in IRM 4.10.20.3.2.2, Returns filed after February 28, 2000, but before July 1, 2002, and IRM 4.10.20.3.2.3, Returns filed on or after July 1, 2002.

In order to effectively audit returns and to examine tax credits when taxpayers use software programs, the Service may summon the following data (in addition to other potential information): an executable copy of the software; the source code, including data-based descriptions, record layouts, and descriptions of physical file formats; and the underlying manuals and documentation to the software and to the source code.

IRC 7612 prohibits the issuance of a summons for computer source code unless certain conditions enumerated in that section are satisfied, and requires that the Service take certain precautions whenever it comes into possession of any computer software or related materials.

Requests for this information should be made as early in the audit as possible and as soon as the agents determine they will need to examine this information.

Any such proposed summons must be submitted to the appropriate Field Counsel for pre-issuance review. Field Counsel may seek assistance from the Chief, Branch 3 (Collection, Bankruptcy & Summonses) in drafting the summons.

Enforcement. In the event that the Service requests civil enforcement of any summons issued pursuant to this procedure, the appropriate Field Counsel office will review the request and, if enforcement is appropriate, the Field Counsel office will prepare a letter to the Tax Division requesting and authorizing a suit for enforcement of the summons. The Field Counsel office will forward the enforcement letter to Procedure & Administration for review prior to transmission to the Tax Division.

Proceeding to Quash. If the Service must defend against a proceeding to quash a summons issued pursuant to this procedure, the defense letter will be prepared by the appropriate field office, and then forwarded to Procedure & Administration for review prior to transmission to the Tax Division.

In general when a summons is issued to a third party, the Service is required to issue a notice to the taxpayer or other person who is identified in the description of records sought. IRC 7609(g) provides a limited exception where the Service can dispense with the giving of notice. To dispense with notice under IRC 7609(a) and (b), the United States district court for the district within which the person summoned resides or is found must enter an order, on the basis of the facts and circumstances alleged, that there is reasonable cause to believe the giving of notice may lead to attempts to conceal, destroy, or alter records relevant to the examination, to prevent the communication of information from other persons through intimidation, bribery, or collusion, or to flee to avoid prosecution, testifying, or production of records. IRC 7609(g). The determination by the court will be ex parte and solely upon petition and supporting affidavits.

If the Area Director’s office requests that Field Counsel obtain a court order to allow the notice requirements to be dispensed with, Field Counsel will review the request to determine if the facts and circumstances indicate that the required showing can be made. If approved, Field Counsel will prepare a letter to the U.S. Attorney containing the law and sufficient facts justifying court approval. The distribution of the letter should be as specified in CCDM 34.6.3.3.1.

If the Field Counsel contemplates disapproving a request for civil enforcement of any summons issued by Criminal Investigation, an informal conference may be arranged between the Special Agent in Charge and Field Counsel for the purpose of clarifying the available evidence or for discussing the merits of the proposed legal action.

If Field Counsel still disapproves or no agreement is reached, a memorandum will be transmitted to the Special Agent in Charge setting forth the reasons for concluding that legal action should not be instituted. A copy should also be sent to the Director, Field Operations.

Upon receipt of Field Counsel’s memorandum, the Special Agent in Charge may choose to prepare a report setting forth his or her views. The Special Agent in Charge’s memorandum will be forwarded to the Director, Field Operations within ten working days of reviewing Field Counsel’s memorandum. A copy of the memorandum will be forwarded to Field Counsel.

Within 30 days of receipt of the memorandum, the Director, Field Operations, may inform Field Counsel in writing of his or her disagreement. A copy of the Special Agent in Charge’s report should be forwarded with the Director, Field Operations’ memorandum.

In the event of disagreement between the Director, Field Operations, and Field Counsel, the Director, Field Operations may refer the matter to the Chief, Criminal Investigation. If the Chief agrees with the Director, he or she should discuss the matter with the Area Counsel in an attempt to resolve the differences. If they do not reach an agreement, the Chief may submit a memorandum report to the Associate Chief Counsel (Procedure & Administration) requesting that the Office of Chief Counsel consider the case. One copy of the memorandum report will be forwarded to Area Counsel and one copy will be forwarded to the Special Agent in Charge. The Associate Chief Counsel (Procedure & Administration) will make the final decision.

The Field Counsel office servicing the Area Director where requests for a collateral investigation originate will process all requests for summons enforcement. A copy of the summons enforcement request will be sent to the Field Counsel in the jurisdiction where the summons enforcement action is to be instituted. That Field Counsel will coordinate the matter to the extent necessary. Thus, when the Area Director, Area 1, sends a collateral request for summons issuance to the Area Director, Area 2, the Field Counsel for Area 1 will process the summons enforcement request. At the time the Field Counsel office for Area 1, forwards a request for summons enforcement, it will forward a copy of the summons enforcement request to the Field Counsel in Area 2 who will provide any necessary coordination with the U.S. Attorney’s Office in Area 2.

Summonses may be issued pursuant to exchange of information requests from tax treaty partners of the United States even if the United States has no tax interest and no claim for U.S. taxes are potentially due and owing. United States v. Burbank & Company, Ltd., 525 F. 2d 9 (2d Cir. 1975), rev’g in part and aff’g in part , 74-2 U.S.T.C. ¶ 9779 (S.D.N.Y. 1974), cert. denied , 425 U.S. 934 (1976). In order to be enforced, these tax treaty summonses need to comply with the good faith requirements of United States v. Powell, 379 U.S. 48 (1964), and other statutory requirements for summonses such as the notice requirements for third-party record-keeper summonses in IRC 7609(a). United States v. Stuart, 489 U.S. 353 (1989), citing Powell, 379 U.S. at 57-58. Summonses may also be issued pursuant to exchange of information requests from countries with which the United States has entered into a tax information exchange agreement (TIEA). Zarate Barquero v. United States, 18 F.3d 1311 (5th Cir. 1994). In view of the complexity of the questions involved, it is believed that tax treaty and TIEA summonses will require special treatment. Therefore, Branch 7, Office of the Associate Chief Counsel (International), in conjunction with Procedure & Administration, has worked out special procedures for the processing of exchange of information requests, and when necessary to secure the requested information through issuance and service of summonses by agents in field offices.

Preparation. Upon receiving a request from a treaty or TIEA partner (foreign country), the Deputy Commissioner (International) (LB&I) or his/her delegate will make a determination as to whether the request falls within the exchange of information provisions of the tax treaty or tax information exchange agreement with that country.

Enforcement. If after issuance, it becomes necessary to seek judicial enforcement of a tax treaty or TIEA summons, the letter to the Tax Division, requesting and authorizing a suit to enforce the summons, will be prepared by the Field Counsel office for the area in which the summons was served. The Field Counsel office will forward the enforcement letter to Branch 7, Associate Chief Counsel (International), which will review the letter and coordinate the case as necessary with Procedure & Administration, prior to transmission to the Tax Division.

Proceeding to Quash. If a party brings a proceeding to quash a tax treaty or TIEA summons, the defense letter will be prepared by the Field Counsel’s office for the area in which the summons was served. The defense letter will be forwarded to Branch 7, Office of the Associate Chief Counsel (International), for review, and coordination as necessary with Procedure & Administration, prior to transmission to the Tax Division.

Field Counsel shall obtain such statements or declarations from area offices needed in connection with enforcement or quash proceedings. All matters concerning the incoming request from the treaty or TIEA country shall be coordinated with Branch 7, Associate Chief Counsel (International), and that office will advise the Office of Deputy Commissioner (International) (LB&I) in the preparation of any documents that may be requested of that office in conjunction with such proceedings.

The procedures for processing requests for grants of statutory use immunity under 18 U.S.C. 6001 §§ et seq. are set forth in IRM 9.6.1.3. Field Counsel attorneys should familiarize themselves with these procedures for handling act of production immunity requests. Under these procedures, Field Counsel is directly involved in the drafting of the summons and in the agency proceeding and review of the documents produced pursuant to the limited grant of immunity. Enforcement letters relating to witnesses who fail to comply with act of production immunity orders are to be forwarded to Procedure & Administration for review. These letters will be coordinated with the Criminal Tax Division.