If a criminal investigation results in sufficient evidence to recommend criminal prosecution to the Department of Justice, the special agent will prepare a prosecution recommendation report, (see IRM 9.5.8, Investigative Reports). Upon completion, the special agent will submit the prosecution recommendation report for review and approval.

See IRM 9.1.2, Authority for the delegated authority relating to 9.5.12, Processing Completed Criminal Investigation Reports.

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

The Director, Global Financial Crimes & Policy:

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.

The table lists commonly used acronyms and their definitions:

IRM 9.4.1, General, Primary, and Subject Investigations.

IRM 9.4.2, Sources of Information.

IRM 11.3 Disclosure of Official Information.

The SSA has the following responsibilities prior to forwarding the prosecution recommendation report to Centralized Case Review (CCR):

When the above responsibilities, (1) a-e, are completed, the SSA will:

If exhibits are voluminous, the option of an on-site review should be considered. In special situations where arrangements are made in advance, it may not be possible to provide all of the exhibits. In those instances, the decision whether to review exhibits will be made by CCR.

Upon receipt of the SAR and Control Log (Form 9838) from the CCR, the SSA will review the CCR’s comments and recommendation. At the discretion of the SSA, they may forward the SAR directly to CT Counsel; or they may have the assigned special agent address some or all of the CCR’s recommendations prior to sending it to CT Counsel. If the CCR calls for significant/major re-work to the SAR, it will need to be sent back through the CCR after changes are made and prior to submission to CT Counsel.

When all of the above responsibilities, (1) a-e and (2) a-d, are completed, the SSA will:

During CT Counsel’s review, once all substantive issues are resolved, the SSA will request technical assistance to review the tax computations through the appropriate operating division Territory Manager. Technical assistance will be based on available resources of appropriate operating division. If a cooperating agent is assigned to the investigation, the cooperating agent will be assigned to compute the criminal tax for CT Counsel. A Special Enforcement Program (SEP) agent will be assigned in all other instances unless there are no available SEP agents or the area has no SEP resources. If a SEP agent is not available, then a general program agent will be assigned to assist CT Counsel. The SSA will prepare a memorandum from the SAC to the operating division Territory Manager requesting the assignment of a cooperating/SEP/general program agent to review the tax computations.

When the prosecution recommendation report is returned by CT Counsel, the SSA will:

When the prosecution recommendation report is finalized, the SSA will:

The SSA has the option to complete the Assessment of Closed General/Subject Seizure/Primary/Subject Investigation Narrative Appraisal, Form 6082 at the conclusion of the investigation whether the investigation is discontinued, declined, or adjudicated.

The CCR will review all sensitive, tax and tax-related prosecution recommendation reports, including grand jury recommendations. At the discretion of the SAC, the CCR will review non-sensitive, non-tax prosecution recommendation reports. The CCR and CT Counsel are required to review all sensitive investigations, defined per IRM 9.4.1, Investigation Initiation.

The CCR has 10 workdays to review the prosecution recommendation report commencing on the date the prosecution recommendation report package and exhibits are received by CCR.

The CCR will conduct an in-depth review of the prosecution recommendation report package to:

At the conclusion of their review, the CCR will:

The CCR will maintain files and records on all reviews to permit tracking of investigations, trends, and evaluation of the quality of their work in accordance with record retention procedures.

The CCR will keep the Directors, Global Operations and the SACs timely informed of trends and needed changes or modifications in plans, methods, procedures and programs.

Investigations with an early statute of limitations are priority review and should be noted on the control log by the SSA. Request for an expedite review will be considered on a case by case basis with conflicts resolved by the Director, Global Operations or his/her designee. All other investigations will be reviewed in the order received.

All time spent by the CCR to review a prosecution recommendation report will be charged as direct investigative time to that particular investigation.

CT Counsel will review sensitive, tax and tax-related prosecution recommendation reports for legal sufficiency. At the request of the SAC, CT Counsel will review non-sensitive, non-tax prosecution recommendation reports.

The following time periods apply to CT Counsel's review and processing of prosecution recommendation reports. These time periods do not include any time extensions or temporary suspensions of review which may be granted in appropriate cases.

CT Counsel will prepare a Criminal Evaluation Memorandum (CEM).

The CEM will be forwarded to the SAC.

The prosecution recommendation report, appendices, exhibits, CEM, and CCR control log will be forwarded to the submitting SSA.

SB/SE will review the tax computation in criminal tax cases referred to the Department of Justice (DOJ) for criminal prosecution (administrative and grand jury).

The criminal tax computation will be requested after CI and CT Counsel have resolved all substantive issues, allowing the examiner to compute tax on settled facts and focus only on the tax computation.

The request for technical assistance to compute tax will be made through the appropriate territory manager using the Form 6544 (Request for Cooperating Examiner). If a cooperating agent has already been assigned to the case, that agent will be assigned to compute the criminal tax. A SEP Agent will be assigned in all other instances unless resources are not available. In those instances, a general program agent will be assigned to perform the computations.

The SAC will:

If the SAC approves the prosecution recommendation report and decides to make the appropriate referral, the SAC will:

The Director, Global Operations will:

A taxpayer conference will be offered as a matter of course. A taxpayer who is the subject of a criminal prosecution recommendation will be afforded a conference with the SAC and CT Counsel.

The taxpayer conference will not be held if the taxpayer is the subject of a grand jury investigation or if the SAC determines that such a conference would not be in the best interest of the government.

If a taxpayer conference is held, it should be done before the SAC makes a referral to the DOJ, Tax Division.

The SAC determines the location of the taxpayer conference.

The SAC may designate an ASAC to conduct the taxpayer conference with CT Counsel.

At the option of the SAC, CT Counsel may prepare the letter for the SAC's signature to the taxpayer and/or representative offering a conference at a location designated by the SAC or his/her designee.

At the conference, the SAC or his/her designee will give a general oral statement of the alleged violations and the facts supporting the investigation to the extent possible while still protecting the government’s interests. Sufficient facts and figures will be made available to the taxpayer to acquaint him/her with the basis, nature, and other essential elements of the proposed criminal charges (see 26 CFR 601.107(b(2)). Extreme care must be exercised to ensure that no information is disclosed to the taxpayer which might:

At the beginning of the taxpayer conference, the taxpayer will be read his/her constitutional rights against self-incrimination.

The taxpayer may be accompanied at the conference by an attorney, CPA, enrolled agent, or any individual who has knowledge of the facts or who can give information which will assist in establishing the facts in the investigation. However, the SAC or his/her designee may terminate the conference or bar any person(s) accompanying the taxpayer from attendance if their presence is deemed disruptive. While a third party’s presence is considered implied consent for disclosure when accompanying the taxpayer, (see IRM 11.3, Disclosure of Official Information), a written authorization from the taxpayer, consenting to or requesting such disclosure, will be required. This authorization may be oral in those instances where the taxpayer’s statement is being recorded.

When a taxpayer’s representative, who has furnished a power of attorney or tax information authorization, attends the conference without the taxpayer, the representative is entitled to receive (to the extent authorized by the taxpayer) the same information that would be furnished if the taxpayer were present.

At the conclusion of the taxpayer conference, CT Counsel will prepare a conference memorandum. The memorandum is reviewed and signed by the SAC and CT Counsel.

The SAC will send a letter to the taxpayer advising of the decision on the prosecution recommendation.

After the formal conference, the special agent and CT Counsel will discuss the defenses raised by the taxpayer and/or the taxpayer’s representative and determine if those defenses warrant further inquiries.

When DOJ, Tax Division concurs with a prosecution recommendation, prosecution is authorized and the prosecution recommendation is forwarded to the appropriate US Attorney’s Office or assigned to a DOJ, Tax Division attorney.

If DOJ, Tax Division or the US Attorney declines to prosecute a referral, the investigation is returned to the SAC of the referring field office.

All tax and tax-related investigations will be referred to DOJ, Tax Division with the exception of the following:

The following documents will be forwarded with prosecution recommendation referrals: