§7602 Examination of books and witnesses

Summary

Allows the IRS to check if a tax return is right, make a return if none was filed, figure out who owes tax, and collect unpaid tax. To do that, the IRS can look at books and records, summon people to appear and bring records and give sworn testimony, and take sworn statements. The IRS can also use these powers to investigate crimes connected to tax laws. There are limits. If IRS staff will contact people other than the taxpayer, the taxpayer must normally get a notice naming a period (no longer than 1 year) when those contacts will happen, and the notice must be given at least 45 days before that period starts. The IRS must give the taxpayer a list of people it contacted during that period or on request. Exceptions include when the taxpayer agrees, when notice would hurt collection or risk someone’s safety, or during a criminal probe. The IRS cannot issue or try to enforce a summons while a Justice Department referral is in effect (for example, when the IRS has asked for a grand jury or prosecution or requested certain return disclosures); the referral ends when the Attorney General tells the IRS in writing that prosecution or a grand jury will not go forward, a final criminal case is finished, or the AG otherwise ends it. Each tax period and each tax in a separate chapter are handled separately. The IRS must have a reasonable indication before using financial-status methods to find hidden income. Records gotten under these rules may be shared only for expert help to the IRS, and only IRS or Office of Chief Counsel staff may question witnesses under oath.