Part 9. Criminal Investigation

Chapter 1. Criminal Investigation Mission and Strategies

Section 2. Authority

9.1.2 Authority

Manual Transmittal

December 26, 2023

Purpose

(1) This transmits revised IRM 9.1.2, Authority.

Material Changes

(1) Added Internal Controls to be compliant with IRM 1.1.2.2.4, Address Management and Internal Controls and IRM 1.4.2, Resource Guide for Managers, Monitoring and Improving Internal Control.

(2) Added Acronym Table, section 9.1.2.1.4.

(3) Section 9.1.2.2(1) updated to state “Title 26 United States Code (USC) §7608(b) provides the initial authority to special agents of Criminal Investigation (CI) with the duty of enforcing any of the criminal provisions of the internal revenue laws, and to investigate violations to the provisions of the internal revenue laws and related statutes.”

(4) Section 9.1.2.2(2) updated to state “Pursuant to 26 USC §7602, 26 USC §7622, and Treasury Order 150–10, the Commissioner and his/her designated officers and employees are authorized to summon the person liable for tax or any person having possession, custody, or care of books and account for testimony and to administer oaths. The other data relating to the business of the person liable for tax or required to perform the act.”

(5) Section 9.1.2.2.3(b) removed the parenthesis “(as set forth in the previous paragraph)” and removed “Note: Property seized under 18 USC §981 where investigatory jurisdiction is solely with another bureau whose representatives are not present at the time of the seizure, shall be turned over to that bureau.”

(6) Added section 9.1.2.2.4 to the end of section 9.1.2.2.3.

(7) Section 9.1.2.2.5, renumbered to 9.1.2.2.4, updated to state “In Servicewide DO 25-5, the Commissioner delegated the authority to initiate criminal investigations of financial institutions that are not currently examined by Federal bank supervisory agencies, except for brokers or dealers in securities, to the Director, National Operations Division (CI) and Chiefs, CI to include CI Director, Operations Support; Deputy Director, Operations Policy and support and Special Agents in Charge. The Commissioner also delegated the authority to initiate criminal investigations of banks and brokers or dealers in securities to the Chief, CI. The Commissioner's authority for DO 25-5 is derived from Treasury Directive 15–41. See DO 25-5 in IRM 1.2.2.14.5, Servicewide Policies and Authorities - Delegation of Authorities to Perform Certain Functions to Enforce 31 CFR 103 (Bank Secrecy Act Regulations).”

(8) Section 9.1.2.2.6 renumbered to 9.1.2.2.5.

(9) Section 9.1.2.3.1 updated cross reference to IRM 1.2.2.14.1.

(10) Section 9.1.2.3.2(3)(j) updated verbiage in parenthesis to state “generally pertaining to the taxation of gasoline and fuel sales”.

(11) Section 9.1.2.3.2(5) updated cross reference to IRM 1.2.2.14.6.

(12) Section 9.1.2.7.2 updated cross reference to IRM 1.2.2.10.2.

(13) Section 9.1.2.8 updated cross reference to IRM 1.2.2.10.6.

(14) Additional revisions, deletions, and grammatical changes were made throughout the section that did not result in substantive changes but contributed to procedural clarity of the subject matter.

Effect on Other Documents

This IRM supersedes IRM 9.1.2, dated September 6, 2013.

Audience

CI

Effective Date

(12-26-2023)

Guy A. Ficco
Deputy Chief, Criminal Investigation
for
James C. Lee
Chief, Criminal Investigation

9.1.2.1 (01-16-2008)

Program Scope and Objectives

  1. Purpose: This section discusses the more common delegated authorities within the U.S. Department of the Treasury and its bureaus.

  2. Audience: All Criminal Investigation (CI) employees.

  3. Policy Owner: Director, Global Financial Crimes & Policy.

  4. Program Owner: Director, Global Financial Crimes & Policy.

  5. Primary Stakeholders: All CI employees.

  6. Contact Information: N/A

  7. Goal: To provide guidance and clarity of the authority directive within the IRS-CI.

9.1.2.1.1 (12-26-2023)

Background

  1. The authority to enforce Federal laws is derived from a variety of statutes. These statutes may assign the enforcement of a given law to a particular department such as the Treasury Department and its bureaus including the Internal Revenue Service (IRS), or enforcement may simply fall to a legal arm of the government, such as the Department of Justice (DOJ).

  2. The various departments of the government then further delegate the authority to enforce the laws through Orders and Directives issued to agencies. The agencies then issue Delegation Orders (or Rules) to specific functions and sometimes even specific positions of employment within the agency itself.

9.1.2.1.2 (12-26-2023)

Authority

  1. IRM 9.1.2, Authority, lists the authorities which other IRM cite to delegate authority.

9.1.2.1.3 (12-26-2023)

Roles and Responsibilities

  1. The Director, Global Financial Crimes & Policy is responsible for developing, maintaining, and overseeing this IRM and ensuring compliance with current policies and procedures.

9.1.2.1.4 (12-26-2023)

Program Management and Review

  1. The Director, Global Financial Crimes & Policy:

    1. Review the IRM annually.

    2. Update the IRM when content is no longer accurate and reliable to ensure employees correctly complete their work assignments and for consistent administration of the tax laws.

    3. Incorporate all permanent interim content into the next revision of the IRM section prior to the expiration date.

9.1.2.1.5 (12-26-2023)

Program Controls

  1. The Director, Global Financial Crimes & Policy will review the instructions and guidelines relating to the investigation of tax returns and other IRS documents for procedural, operational, and editorial changes.

9.1.2.1.6 (12-26-2023)

Acronyms

  1. The following table lists the terms and acronyms used throughout this IRM section and their definitions.

    Acronym Definition
    BSA Bank Secrecy Act
    CI Criminal Investigation
    DO Delegation Order
    DOJ Department of Justice
    SAC Special Agent in Charge
    USC United States Code
9.1.2.1.7 (12-26-2023)

Related Resources

  1. Delegation Order 25-1.

  2. IRM 1.2.2.14.5, Servicewide Policies and Authorities - Delegation of Authorities.

  3. IRM 9.4.9, Search Warrants, Evidence, and Chain of Custody.

  4. IRM 9.7, Asset Seizure and Forfeiture.

  5. IRM 30.2.2, General Counsel Orders and Directives

  6. Treasury Order 150-35

9.1.2.2 (12-26-2023)

General Authority to Enforce Internal Revenue Laws and Related Statutes

  1. Title 26 United States Code (USC) §7608(b) provides the initial authority to special agents of Criminal Investigation (CI) with the duty of enforcing any of the criminal provisions of the internal revenue laws, and to investigate violations to the provisions of the internal revenue laws and related statutes.

  2. Pursuant to 26 USC §7602, 26 USC §7622, and Treasury Order 150–10, the Commissioner and his/her designated officers and employees are authorized to summon the person liable for tax or any person having possession, custody, or care of books and account for testimony and to administer oaths. The authority also extends to the examination any books, papers, records, or other data relating to the business of the person liable for tax or required to perform the act, as may be relevant or material to such inquiry.

  3. The IRS also has explicit enforcement responsibilities with regard to 18 USC §1956 and 18 USC §1957, dealing with money laundering, and 31 USC §5311 et seq., dealing with the Bank Secrecy Act (BSA). Pursuant to Treasury Directive 15-42, the Commissioner, IRS has been delegated:

    1. Investigatory authority over violations of 18 USC §1956 and 18 USC §1957 where the underlying conduct is subject to investigation under Title 26 or under the BSA as amended i.e. 31 USC §5311, et seq. (other than violations of 31 USC §5316; and

    2. Seizure and forfeiture authority over violations of 18 USC §981 and 31 USC §5317, relating to violations of 31 USC §5313 and 31 USC §5324, and 18 USC §1956 and 18 USC §1957 which are within the investigatory jurisdiction of IRS.


    By commissions given each officer of CI, the Commissioner designates such individuals as having the authority to perform all duties conferred upon such officers, under all laws and regulations administered by the IRS, including the authority to investigate, require, and receive information related to the aforementioned laws and regulations. Servicewide Delegation Order (DO) 9-2 (formerly DO-158) authorizes the Special Agent in Charge (SAC) to investigate violations of 18 USC §1956 and 18 USC §1957 where the underlying conduct is subject to investigation under Title 26 or the BSA (i.e., 31 USC §5311 et seq. (other than violations of 31 USC §5316)). See DO 9-2 in IRM 1.2.48, Servicewide Policies and Authorities - Delegation of Authorities for CI Activities under the Money Laundering Control Act and Bank Secrecy Acts.

  4. In Servicewide DO 25-5, the Commissioner delegated the authority to initiate criminal investigations of financial institutions that are not currently examined by Federal bank supervisory agencies, except for brokers or dealers in securities, to the Director, National Operations Division (CI) and Chiefs, CI to include CI Director, Operations Support; Deputy Director, Operations Policy and support and Special Agents in Charge. The Commissioner also delegated the authority to initiate criminal investigations of banks and brokers or dealers in securities to the Chief, CI. The Commissioner's authority for DO 25-5 is derived from Treasury Directive 15–41. See DO 25-5 in IRM 1.2.2.14.5, Servicewide Policies and Authorities - Delegation of Authorities to Perform Certain Functions to Enforce 31 CFR 103 (Bank Secrecy Act Regulations).

  5. Under the Commissioner, CI's responsibilities include the investigation of all alleged criminal violations arising under the Internal Revenue laws and related criminal statutes. See IRM 9.1.3, Criminal Statutory Provisions and Common Law, for a discussion of the statutes under CI jurisdiction.

9.1.2.3 (09-07-2001)

Authority for Certain Investigative Techniques

  1. The following authority is granted to special agents in performance of their duties.

9.1.2.3.1 (12-26-2023)

Authority to Interview

  1. Title 26 USC §7602 authorizes the Secretary of the Treasury or his delegate to examine books and records, and to take testimony under oath. This authority was delegated to the Commissioner under Treasury Order 150-10 and 26 CFR §301.7602-1 through 26 CFR §301.7605-1. The Commissioner has delegated that authority to other IRS employees via Servicewide DO 25-1 (Rev. 1), which is located in IRM 1.2.2.14.1.

  2. Delegation Order 25-1 authorizes special agents to issue and serve summonses, examine books and records, question witnesses, and take testimony under oath.

9.1.2.3.2 (12-26-2023)

Authority to Issue a Summons, Examine Records, and Take Testimony

  1. The authority granted to the Secretary or his/her delegate by 26 USC §7602 to issue a summons, examine records, and take testimony is granted to the Commissioner of Internal Revenue by Treasury Order 150–10 and 26 CFR §301.7602–1 through 26 CFR §301.7605–1. The Commissioner has delegated that authority to other IRS employees in DO 25-1. Detailed information about the summons and instructions for its preparation is found in IRM Chapter 25.5, Summons.

  2. Field offices will designate CI as the issuing compliance function on Form 2039, Summons "Internal Revenue Service (Division)" line.

  3. The provisions of the law relating to the use and enforcement of a summons are contained in the following sections of Title 26:

    1. 26 USC §7602 - Examination of Books and Witnesses,

    2. 26 USC §7603 - Service of Summons,

    3. 26 USC §7604 - Enforcement of Summons,

    4. 26 USC §7605 - Time and Place of Examination,

    5. 26 USC §7609 - Special Procedures for Third-Party Summonses,

    6. 26 USC §7610 - Fees and Costs for Witnesses,

    7. 26 USC §7622 - Authority to Administer Oaths and Certify,

    8. 26 USC §7402 - Jurisdiction of District Courts,

    9. 26 USC §7210 - Failure to Obey Summons,

    10. 26 USC §6420(e)(2), 26 USC §6421(g)(2), and 26 USC §6421(j)(2) (generally pertaining to the taxation of gasoline and fuel sales).

  4. Pursuant to 26 USC §7610, payments may be made to third parties who request reimbursement for costs incurred in complying with a summons.

  5. Delegation Order 25-6 (formerly DO-178, Rev. 6), which is located in IRM 1.2.2.14.6, delegates the authority to use appropriated funds to pay search costs, reproduction costs, and transportation costs, incurred while complying with a third-party summons, to the Chief, CI.

9.1.2.3.3 (11-10-2004)

Authority to Take Handwriting Exemplars

  1. Whenever an agent becomes aware that the authenticity or origin of a document may be in question, he/she should attempt to obtain handwriting exemplars of the parties involved. An agent's authority to summons a taxpayer or other witness for the purpose of taking handwriting exemplars is provided by 26 USC §7602. This authority does not violate any Constitutional rights or policies enunciated by Congress. Compulsion of handwriting exemplars is neither a search nor seizure subject to Fourth Amendment protections nor testimonial evidence protected by the Fifth Amendment privilege against self-incrimination. A handwriting exemplar is an identifying physical characteristic.

9.1.2.3.4 (12-26-2023)

Authority for Searches with Warrants

  1. The basic authority for conducting searches and making seizures is found in the Fourth Amendment to the Constitution of the United States which states: "the right of the people to be secure in their persons, houses, papers, and effects against unreasonable searches and seizures shall not be violated, and no warrants shall issue, but upon probable cause, supported by oath or affirmation, and particularly describing the place to be searched and the persons or things to be seized." The Fourth Amendment protects individuals against unreasonable searches and seizures by the government. The scope of this protection extends to any area in which an individual has a reasonable expectation of privacy. Further, the Fourth Amendment provides that all warrants shall be based upon probable cause and supported by oath or affirmation.

  2. Title 26 USC §7302 provides that it shall be unlawful to have or to possess any property used, or intended for use, in violating the provisions of the Internal Revenue laws, or regulations prescribed under such laws, and that no property rights shall exist in any such property.

  3. Title 26 USC §7608, authorizes special agents to serve search warrants and seize personal property subject to forfeiture.

  4. A search warrant may be issued pursuant to 18 USC Chapter 205, and the Federal Rules of Criminal Procedure (Fed. R. Crim. P.), for the search of the personal property used, or intended for use, in violation of the Internal Revenue laws or regulations.

  5. Title 18 USC §3105; 18 USC §3109; Fed. R. Crim. P. R 41; 26 USC §7302; 26 USC §7321; and 26 USC §7608 provide the statutory authority for searches and seizures conducted by special agents. Pertinent parts of Rule 41 provide for warrants to be issued by a Federal judge or magistrate upon the affidavit of a law enforcement officer. A warrant issued under this rule may provide for the search and seizure of any of the following:

    1. Property that constitutes evidence of the commission of a criminal offense,

    2. Contraband, the fruits of crime, or things otherwise criminally possessed,

    3. Property designed or intended for use or which is or has been used as the means of committing a criminal offense,

    4. Person for whose arrest there is probable cause, or who is lawfully restrained,

  6. The phrase, Federal law enforcement officer, as used in Rule 41, refers to any government agent, other than an attorney for the government as defined in Fed. R. Crim. P. Rule 1(b)(1), who is engaged in the enforcement of the criminal laws and is within any category of officers authorized by the Attorney General to request the issuance of a search warrant.

  7. For more information concerning search authority and procedure see IRM 9.4.9, Search Warrants, Evidence, and Chain of Custody.

9.1.2.3.5 (01-16-2008)

Authority for Warrantless Searches

  1. Searches can be made without a warrant so long as the consent of the property owner is obtained first or the search is incident to a lawful arrest.

  2. A search without a warrant may be made with the consent of the person who has the right to give such consent. The consent must be voluntarily given and not the result of any undue influence or duress. Any coercion will invalidate the search and seizure. The courts have held that only persons whose constitutional rights have been violated will be heard in objection to the search. The rights guaranteed are personal and may be waived only by the person having the right of immediate possession. One person may not waive such rights for another unless the person so waiving has authorized possession of the premises.

  3. A person lawfully arrested may be searched without a warrant and the premises under his/her immediate custody and control may be searched for weapons.

  4. For more information concerning search authority and procedure, see IRM 9.4.9, Search Warrants, Evidence and Chain of Custody.

9.1.2.4 (12-26-2023)

Authority to Arrest

  1. The authority of special agents to make arrests is provided by 26 USC §7608. This section provides, in part, that a special agent is authorized: to execute and serve search warrants and arrest warrants; to serve subpoenas and summonses issued under authority of the United States; to make arrests without warrant for any offense against the United States relating to the Internal Revenue laws that is committed in his/her presence, or for any felony cognizable under such laws if he/she has reasonable grounds to believe that the person to be arrested has committed or is committing any such felony; and to make seizures of property subject to forfeiture under the Internal Revenue laws.

  2. The Supreme Court has stated that, in the absence of a controlling Federal statute, the law of arrest of the state where the arrest is made is controlling. In the absence of a statute authorizing a federal officer to make an arrest without a warrant, that officer has the same powers of arrest as a private citizen. The power of a special agent is to make an arrest without a warrant as a private citizen, when valid under state law, is not made invalid because the crime is outside the scope of the Internal Revenue laws. An arrest without a warrant is a serious matter and could subject the person making the arrest to criminal and civil liability for false imprisonment or false arrest. Therefore, in order for a special agent to be authorized to make a warrantless arrest (as a private citizen), it is generally necessary that a violation constituting a felony be committed in his/her presence or he/she must reasonably believe that the person whom he/she arrests has committed a felony.

  3. Every state has its own requirements in granting Federal law enforcement officers state peace officer status. Even if peace officer status is recognized by your state, check with counsel before taking any position as a recognized peace officer.

9.1.2.4.1 (12-26-2023)

Authority To Carry Firearms

  1. There is no specific statutory authority for special agent to carry firearms. The General Counsel, Department of the Treasury, has concluded that no specific authority is necessary because "where a Federal officer has authority to make an arrest, he/she has implied authority to carry firearms" . Authority for special agents to make arrests is contained in 26 USC §7608(b).

  2. The authority to carry firearms is limited to the conduct of official duties in enforcing any of the criminal provisions of the Internal Revenue laws or other criminal provisions of laws relating to the Internal Revenue where the enforcement is the responsibility of the Secretary or his/her delegate.

  3. Authority to carry or use privately owned weapons during off-duty hours, as a private citizen, is subject to local civil and criminal restrictions. Special agents may not use their position or credentials to qualify under state or local laws to purchase, license, carry, or use private weapons. Credentials may be displayed as occupational identification, upon request, but not to influence any decision a state or local law enforcement officer may make concerning the special agents ability to carry a concealed weapon.

9.1.2.5 (12-26-2023)

Authority to Compromise a Tax Investigation

  1. The Secretary of the Treasury or the Secretary’s delegate may compromise any civil or criminal tax case prior to referral to the Department of Justice, DOJ (26 USC §7122(a)). The Secretary has delegated this authority to the Commissioner of Internal Revenue (26 CFR §601.203). Strict compliance with the statutory provisions is required to effect a compromise. Accordingly, an attempted settlement by subordinate IRS officials will not bar criminal prosecution. A valid compromise is as complete a discharge from prosecution as an acquittal by a jury.

  2. Criminal Investigation pursues offers in compromise in investigations in which criminal proceedings are pending only if specifically requested by Counsel.

  3. After referral of an investigation to the DOJ, authority to compromise rests with the Attorney General.

  4. Tender of tax or the actual payment thereof, prior to a verdict or plea of guilty, is not a bar to criminal prosecution.

9.1.2.6 (11-10-2004)

Authority to Settle Criminal Cases

  1. When a taxpayer, represented by counsel, expresses a desire to negotiate an expedited plea agreement prior to the formal completion of an administrative investigation, the special agent will advise taxpayer’s counsel (see IRM 9.6.2, Plea Agreements and Sentencing Process for detailed information on the expedited plea program):

    1. The IRS does not have the authority to engage in plea negotiations, because this authority rests exclusively with the DOJ.

    2. Plea negotiations have to be conducted by either the United States Attorney’s office or the DOJ, Tax Division.

9.1.2.7 (11-10-2004)

Authority to Seize Property for Forfeiture

  1. The authority to seize assets for forfeiture comes from the Internal Revenue Code (Title 26 of the USC) and Title 18 and 31 of the USC. For more information concerning seizure authority and procedure, see IRM Chapter 9.7, Asset Seizure and Forfeiture.

9.1.2.7.1 (12-26-2023)

Title 26 Seizures

  1. Title 26 USC §7608, authorizes special agents to serve search warrants and seize personal property subject to forfeiture.

  2. Title 26 USC §7302 provides that it shall be unlawful to have or possess any property which is used, or intended for use, in violation of the Internal Revenue laws or regulations prescribed under such laws. It further provides that no property rights shall exist in any such property, and that a search warrant may be issued as provided in 18 USC Chapter 205 and the Fed. R. Crim. P., for the seizure of such property. Title 26 USC §7321 authorizes the Secretary to seize any property subject to forfeiture pursuant to 26 USC §§7301, 7302, and 7303.

  3. A search warrant may be issued for the seizure of property used or intended to be used in violation of the Internal Revenue laws. (Fed. R. Crim. P. R41(b)). A seizure in violation of the Fourth Amendment will not sustain a forfeiture, unless the property seized is contraband per se.

  4. Servicewide DO 9-1 (formerly DO-157, Rev. 7), which is located in IRM 1.2.2.10.1, authorizes special agents to seize personal property for forfeiture to the United States when such property was used or intended to be used in violation of those Internal Revenue laws other than Chapters 51, 52 and 53 of the Internal Revenue Code.

9.1.2.7.2 (12-26-2023)

Title 18 Seizures

  1. Title 18 USC §981(e) vests civil seizure and forfeiture authority in the Secretary of the Treasury relating to violations of:

    1. 18 USC §1956 (within the investigatory jurisdiction of IRS),

    2. 18 USC §1957 (within the investigatory jurisdiction of IRS),

    3. 18 USC §1960 (within the investigatory jurisdiction of IRS).

  2. The Secretary of the Treasury, through Treasury Order 101-05, delegated the authority to the Under Secretary (Terrorism & Financial Intelligence). Treasury Directives 15-42 further delegated this authority to the Commissioner, IRS. The Commissioner issued Servicewide DO 9-2 (formerly DO-158, Rev. 2), which is located in IRM 1.2.2.10.2, specifying various activities in the civil seizure and forfeiture process delegated to certain CI personnel.

  3. The criminal forfeiture procedures found in Title 18, as they relate to the IRS, are governed by four statutory authorities. Three of these authorities are incorporated into the money laundering criminal forfeiture statute by reference, while the fourth is a consequence of the fact that criminal processes are governed by the Fed. R. Crim. P. These statutory authorities are as follows:

    1. 18 USC §982(b) which states that the provisions of 21 USC §853 shall govern the seizure and disposition of any property subject to forfeiture under 18 USC §982.

    2. 21 USC §853(e)(1) provides for a temporary restraining order prior to the conclusion of a criminal investigation to preserve the availability of the property for forfeiture by restraining transfer of the property or further encumbrances.

    3. 21 USC §853(f) provides for the use of a seizure warrant for property subject to forfeiture under 18 USC §982 and §853(f).

    4. Pursuant to 21 USC §853(j), and by reference in 21 USC §881(d), civil forfeiture proceeds according to the Supplemental Rules of Certain Admiralty or Maritime Claims and Asset Forfeiture (Civil Judicial Forfeiture Procedures, 19 USC §1602 et seq.) (Civil Administrative Forfeiture Procedures).

    5. In addition, because criminal forfeiture is an integral part of the underlying criminal prosecution, the Fed. R. Crim. P. govern the general process by which property is criminally forfeited.

9.1.2.8 (12-26-2023)

Criminal Referral Authority

  1. Treasury Order 150-35 delegates criminal referral authority to the Commissioner and to Treasury General Counsel.

    1. The Commissioner has the authority to refer all criminal matters within the jurisdiction of the IRS to the DOJ for grand jury investigation, criminal prosecution, or other criminal enforcement action requiring court order or DOJ approval.

    2. Treasury General Counsel has exclusive authority to make referrals in criminal matters for judicial enforcement of summonses and to determine which court decisions of a criminal tax matter should be appealed. He/she has concurrent authority with the Commissioner to refer a criminal matter to DOJ for pre-referral advice. This authority has been re-delegated to Chief Counsel by General Counsel Order No. 4, Delegation of Authority to Chief Counsel, which is located in IRM 30.2.2, General Counsel Orders and Directives (see Exh. 30.2.2-6, General Counsel Order No. 4, Delegation of Authority to Chief Counsel).

  2. Delegation Order 9-6 (formerly DO-206, Rev. 1 and DO-263, Rev. 2), which is located in IRM 1.2.2.10.6, delegates the Commissioner's criminal referral authority to SACs, CI.

9.1.2.9 (01-16-2008)

Conflict of Laws

  1. Federal laws prevail over state laws (statutory or constitutional), and state law, if in conflict, must yield. ( United States Constitution, Article VI, Clause 2, The Supremacy Clause).