PRIA, Government Policy, Made Personal

Summary

The IRS can examine books, papers, records, and other data. It can summon people who are liable for tax, their officers or employees, or anyone who holds their records to bring those items and give sworn testimony. The IRS can do this to check a return, make a return if none was filed, figure out who owes tax (including transferees or fiduciaries), collect taxes, or investigate offenses tied to tax laws. The IRS must have a reasonable indication before using financial‑status or economic‑reality methods to look for unreported income. The IRS must tell a taxpayer before it contacts other people about that taxpayer’s tax liability. The notice must name a contact period of no more than 1 year and generally be given at least 45 days before the period starts. The IRS will give a record of whom it contacted during that period, and will provide it on request. Exceptions apply if the taxpayer agreed, if notice would jeopardize collection or cause reprisal, or if a criminal investigation is pending. If the Justice Department has been asked to investigate or prosecute a person, the IRS may not issue or try to enforce a summons for that person while that referral is in effect; the referral ends when the Attorney General says prosecution won’t happen, a grand jury action is stopped, there is a final court outcome, or a related disclosure request is resolved. The IRS may only share records obtained here with outside experts who are helping the IRS, and only IRS staff or the Office of Chief Counsel may question witnesses under oath on the IRS’s behalf.

Title 26, §7602

Internal Revenue Code, Source: USLM XML via OLRC

(a)Authority to summon, etc.

For the purpose of ascertaining the correctness of any return, making a return where none has been made, determining the liability of any person for any internal revenue tax or the liability at law or in equity of any transferee or fiduciary of any person in respect of any internal revenue tax, or collecting any such liability, the Secretary is authorized—

(1)To examine any books, papers, records, or other data which may be relevant or material to such inquiry;

(2)To summon the person liable for tax or required to perform the act, or any officer or employee of such person, or any person having possession, custody, or care of books of account containing entries relating to the business of the person liable for tax or required to perform the act, or any other person the Secretary may deem proper, to appear before the Secretary at a time and place named in the summons and to produce such books, papers, records, or other data, and to give such testimony, under oath, as may be relevant or material to such inquiry; and

(3)To take such testimony of the person concerned, under oath, as may be relevant or material to such inquiry.

(b)Purpose may include inquiry into offense

The purposes for which the Secretary may take any action described in paragraph (1), (2), or (3) of subsection (a) include the purpose of inquiring into any offense connected with the administration or enforcement of the internal revenue laws.

(c)Notice of contact of third parties

(1)General notice

An officer or employee of the Internal Revenue Service may not contact any person other than the taxpayer with respect to the determination or collection of the tax liability of such taxpayer unless such contact occurs during a period (not greater than 1 year) which is specified in a notice which—

(A)informs the taxpayer that contacts with persons other than the taxpayer are intended to be made during such period, and

(B)except as otherwise provided by the Secretary, is provided to the taxpayer not later than 45 days before the beginning of such period.

Nothing in the preceding sentence shall prevent the issuance of notices to the same taxpayer with respect to the same tax liability with periods specified therein that, in the aggregate, exceed 1 year. A notice shall not be issued under this paragraph unless there is an intent at the time such notice is issued to contact persons other than the taxpayer during the period specified in such notice. The preceding sentence shall not prevent the issuance of a notice if the requirement of such sentence is met on the basis of the assumption that the information sought to be obtained by such contact will not be obtained by other means before such contact.

(2)Notice of specific contacts

The Secretary shall periodically provide to a taxpayer a record of persons contacted during such period by the Secretary with respect to the determination or collection of the tax liability of such taxpayer. Such record shall also be provided upon request of the taxpayer.

(3)Exceptions

This subsection shall not apply—

(A)to any contact which the taxpayer has authorized;

(B)if the Secretary determines for good cause shown that such notice would jeopardize collection of any tax or such notice may involve reprisal against any person; or

(C)with respect to any pending criminal investigation.

(d)No administrative summons when there is Justice Department referral

(1)Limitation of authority

No summons may be issued under this title, and the Secretary may not begin any action under section 7604 to enforce any summons, with respect to any person if a Justice Department referral is in effect with respect to such person.

(2)Justice Department referral in effect

For purposes of this subsection

(A) In general

(B)Termination

A Justice Department referral shall cease to be in effect with respect to a person when—

(i)the Attorney General notifies the Secretary, in writing, that—

(I)he will not prosecute such person for any offense connected with the administration or enforcement of the internal revenue laws,

(II)he will not authorize a grand jury investigation of such person with respect to such an offense, or

(III)he will discontinue such a grand jury investigation,

(ii)a final disposition has been made of any criminal proceeding pertaining to the enforcement of the internal revenue laws which was instituted by the Attorney General against such person, or

(iii)the Attorney General notifies the Secretary, in writing, that he will not prosecute such person for any offense connected with the administration or enforcement of the internal revenue laws relating to the request described in subparagraph (A)(ii).

(3)Taxable years, etc., treated separately

For purposes of this subsection, each taxable period (or, if there is no taxable period, each taxable event) and each tax imposed by a separate chapter of this title shall be treated separately.

(e)Limitation on examination on unreported income

The Secretary shall not use financial status or economic reality examination techniques to determine the existence of unreported income of any taxpayer unless the Secretary has a reasonable indication that there is a likelihood of such unreported income.

(f)Limitation on access of persons other than Internal Revenue Service officers and employees

The Secretary shall not, under the authority of section 6103(n), provide any books, papers, records, or other data obtained pursuant to this section to any person authorized under section 6103(n), except when such person requires such information for the sole purpose of providing expert evaluation and assistance to the Internal Revenue Service. No person other than an officer or employee of the Internal Revenue Service or the Office of Chief Counsel may, on behalf of the Secretary, question a witness under oath whose testimony was obtained pursuant to this section.

Notes & Related Subsidiaries

Editorial Notes

Amendments

2019—Subsec. (c)(1). Pub. L. 116–25, § 1206(a), amended par. (1) generally. Prior to amendment, text read as follows: “An officer or employee of the Internal Revenue Service may not contact any person other than the taxpayer with respect to the determination or collection of the tax liability of such taxpayer without providing reasonable notice in advance to the taxpayer that contacts with persons other than the taxpayer may be made.” Subsec. (f). Pub. L. 116–25, § 1208(a), added subsec. (f). 1998—Subsec. (c). Pub. L. 105–206, § 3417(a), added subsec. (c). Former subsec. (c) redesignated (d). Subsec. (d). Pub. L. 105–206, § 3417(a), redesignated subsec. (c) as (d). Former subsec. (d) redesignated (e). Pub. L. 105–206, § 3412, added subsec. (d). Subsec. (e). Pub. L. 105–206, § 3417(a), redesignated subsec. (d) as (e). 1982—Pub. L. 97–248 redesignated existing provisions as subsec. (a), added subsec. (a) heading, and added subsecs. (b) and (c). 1976—Pub. L. 94–455 struck out “or his delegate” after “Secretary” wherever appearing.

Statutory Notes and Related Subsidiaries

Effective Date

of 2019 Amendment Pub. L. 116–25, title I, § 1206(b),

July 1, 2019, 133 Stat. 990, provided that: “The amendment made by this section [amending this section] shall apply to notices provided, and contacts of persons made, after the date which is 45 days after the date of the enactment of this Act [

July 1, 2019].” Pub. L. 116–25, title I, § 1208(b),

July 1, 2019, 133 Stat. 991, provided that: “The amendment made by this section [amending this section]— “(1) shall take effect on the date of the enactment of this Act [

July 1, 2019]; and “(2) shall not fail to apply to a contract in effect under section 6103(n) of the Internal Revenue Code of 1986 merely because such contract was in effect before the date of the enactment of this Act.”

Effective Date

of 1998 Amendment Pub. L. 105–206, title III, § 3417(b), July 22, 1998, 112 Stat. 758, provided that: “The

Amendments

made by subsection (a) [amending this section] shall apply to contacts made after the 180th day after the date of the enactment of this Act [July 22, 1998].”

Effective Date

of 1982 Amendment Pub. L. 97–248, title III, § 333(b), Sept. 3, 1982, 96 Stat. 623, provided that: “The

Amendments

made by subsection (a) [amending this section] shall take effect on the day after the date of the enactment of this Act [Sept. 3, 1982].”

§7602 Examination of Books and Witnesses

Summary

Title 26, §7602

Notes & Related Subsidiaries

Editorial Notes

Amendments

Statutory Notes and Related Subsidiaries

Effective Date

Effective Date

Amendments

Effective Date

Amendments

Citations & Metadata