Special agents receive assignments from their managers as to information items or for full-scale investigations. Information item assignments are usually limited inquiries to determine whether sufficient potential exists to conduct a full-scale investigation of a taxpayer. If a full-scale investigation is authorized, one or more special agents are assigned and the investigation continues until the evidence is sufficient for the agent to recommend prosecution or until there is no longer reason to believe that a prosecutable case can result with available resources. The taxpayer is notified if CID closes its criminal case and returns the matter for civil disposition. An agent conducting an information assignment normally reviews the taxpayer’s returns and other related IRS documents. If the case has been referred from within the IRS, the referring employee is interviewed. Informants, if any, are also interviewed. The special agent often confers with supervisors or senior agents concerning the potential of the case, and recommends whether the case merits full-scale investigation or should be returned for civil disposition. The District Chief of the Criminal Investigation Division (CID) or the Chief’s designee makes the final decision.
RULES GOVERNING SPECIAL AGENT’S ACTIONS
Criminal Investigation Division (CID) special agents have broad powers in securing evidence, including authority to administer oaths, to take testimony of witnesses, to examine books and records, to serve administrative summonses, and to execute search and arrest warrants.
Taxpayers who are placed under arrest must be given Miranda warnings. The extent to which a taxpayer will be given Miranda warnings depends on whether he is in custody at the time of first contact by the special agent. If he is under arrest or imprisoned, the special agent must give the full Miranda warnings, even though there is no relation between the tax investigation and the reasons that the taxpayer is in custody. Interviews conducted in an IRS office or at the taxpayer’s home or business are normally noncustodial. Case law establishes that the filing of a Form 2848, Power of Attorney and Declaration of Representative, is not an invocation of the right to counsel that precludes the special agent from interviewing the signer without the representative present.
WITHDRAWAL FROM CRIMINAL INVESTIGATION
A taxpayer who was made aware that he was being investigated is generally notified when the investigation is terminated. A case in which an investigation is terminated may be referred back to the Examination or Collection Division of the IRS. If additional indications of fraud are found after the criminal investigation is discontinued, the revenue agent must refer the matter back to the Criminal Investigation Division (CID).
TAX LIABILITY OF INFORMANT
An action for damages may be brought against the government if it intentionally compromises the liability of a taxpayer’s representative in exchange for information that the taxpayer conveyed to the representative.