42.00
RESTRICTIONS ON OBTAINING
AND
USING
"TAX RETURNS," "TAXPAYER RETURN INFORMATION,"
AND
"RETURN INFORMATION"
Updated
September 2001
42.01 STATUTORY LANGUAGE: 26 U.S.C. § 6103(a)
42.02 GENERALLY
42.03 THE STATUTORY STRUCTURE
42.03[1] Generally
42.03[2] Return Information Remains Subject to
The Non-Disclosure Rules of § 6103 Even After it Has Been Made Public
42.04 "RETURN INFORMATION" DEFINED: 26 U.S.C. § 6103(b)
42.04[1] Generally
42.04[2] Information Obtained from Non-IRS Sources Is Not "Return Information"
42.05 PERMISSIBLE DISCLOSURES OF RETURNS AND RETURN INFORMATION
42.05[1] Generally
42.05[2] Section 6103(h) -- Disclosure to Certain Federal Officers and Employees
for Purposes of Tax Administration, etc.
42.05[3] Disclosures to the Department of Justice for Tax Administration
42.05[3][a] Procedures for Disclosure
42.05[3][b] Joint Tax-Non-Tax Criminal Investigation
42.05[3][c] Investigative Disclosures
42.05[3][d] Disclosure in Judicial and Administrative Tax Proceedings
42.05[4] Section 6103(i) - Disclosure to Federal Officers or Employees for
Administration of Federal Laws Not Related to Tax Administration
42.05[4][a] Generally
42.05[4][b] Disclosure Pursuant to Court Order: Tax Returns and Taxpayer
Return Information
42.05[4][c] Application for the Order
42.05[4][d] Use or Further Disclosure of Returns and Return Information in
Judicial Proceedings
42.05[4][d][i] Information Obtained by Ex Parte Order
42.05[4][d][ii] Other Return Information Obtained by Letter
42.05[4][d][iii] Withholding Return Information and Suppression
42.05[4][d][iv] Disclosure of Return Information For Other Purposes
42.06 REMEDIES FOR VIOLATIONS OF § 6103
42.06[1] Criminal Sanctions
42.06[2] Civil Remedies
APPENDIX
Sample Application For Section 6103(i)(1) Order
Sample 6103(i)(1) Order
42.01 STATUTORY LANGUAGE: 26 U.S.C. § 6103(a)
§ 6103. Confidentiality and disclosure of returns and return
information
(a) General rule. -- Returns and return information shall
be confidential, and except as authorized by this title
--
(1) no officer or employee of the
United States
,
(2) no officer or employee of any State, any local child
support enforcement agency, or any local agency administering a program
listed in subsection (l)(7)(D) who has or had access to returns or
return information under this section, and
(3) no other person (or officer or employee thereof) who has
or had access to returns or return information . . . [pursuant to
certain provisions of this section],
shall disclose any return or return information obtained by him in any
manner in connection with his service as such an officer or an employee
or otherwise or under the provisions of this section. For purposes of
this subsection, the term "officer or employee" includes a former
officer or employee.
42.02 GENERALLY
Section 6103 of the Internal Revenue Code of 1986 generally prohibits
the disclosure of "tax returns" and other "tax return information" outside the
Internal Revenue Service (IRS) unless the disclosure falls within one of the
specific provisions of section 6103(c) through (o). Note particularly that
the statute provides the sole and exclusive means by which return information
may be disclosed; the courts do not possess any extra-statutory power to order
the IRS to produce return information, either sua sponte or on a motion
by a defendant. See
United States
v. Lochmondy, 890 F.2d
817, 823-24 (6th Cir. 1989) (Section 6103(i) grants no authority for courts to
issue sua sponte orders for the disclosure of tax information);
United States
v. Barnes, 604 F.2d 121, 145-46 (2d Cir. 1979).
In cases involving "tax administration" (e.g., criminal tax
prosecutions or other criminal cases that have been specifically designated as
"related" to tax administration) that have been referred to the Department of
Justice, the IRS may, in its own discretion, disclose to the Department of
Justice prosecutors handling the case the tax returns and tax return
information that "may" relate to the case (section 6103(h)(2)). Under section
6103(h)(2), the prosecutors may use the returns and return information for
investigative purposes. Section 6103(h)(4) authorizes the prosecutor to
introduce into evidence at trial a return or piece of return information that
"is" relevant to the case.
In non-tax criminal cases, Federal prosecutors may obtain and use for
investigative purposes returns and other information filed with the IRS by a
taxpayer only through an ex parte order of a
United States
district
court based upon an application (that must be signed by the
United States
Attorney) showing that the information is relevant to an ongoing criminal
prosecution. [FN1] The prosecutor may use that information at trial
(e.g., introduce it into evidence or otherwise make it public in the
proceeding) only upon a showing to the court that the information is
"probative of an issue" in the case.
Willful violations of the provisions of section 6103 are punishable as a
felony and dismissal from Federal service, while negligent violations subject
the
United States
to a suit for damages. See 42.06, infra.
42.03 THE STATUTORY STRUCTURE
42.03[1] Generally
Section 6103(a) requires officers and employees of the
United States
to
keep tax returns and return information confidential, and prohibits them from
disclosing such information, except as authorized by the Internal Revenue
Code. [FN2] Section 6103(b) defines "return," "return information," and
"taxpayer return information." Sections 6103(c) - (o) contain the exceptions
that allow disclosure of returns and returns information to taxpayers, the
Department of Justice, and other governmental entities. Section 6103(p)
provides rules and procedures for the handling, storage, and disposition of
return information by the IRS and by those within the Department to whom
return information has been disclosed. [FN3]
42.03[2] Return Information Remains Subject to The Non-Disclosure Rules
of § 6103 Even After it Has Been Made Public
The section 6103 prohibitions on disclosure are source-based. That is,
the statute bars the public disclosure of information directly from IRS files,
as well as the disclosure of returns and return information that has been
accumulated in Department files. The statute contains no exception that lifts
the non-disclosure prohibition for return information once it has been
disclosed in public, such as in a judicial proceeding. (In contrast, the
secrecy provisions of Federal Rule of Criminal Procedure (Fed. R. Crim. P.)
6(e) governing disclosures of "matters occurring before the grand jury," are
held not to apply to information once it has been publically disclosed.)
Section 6103 does not, however, ban the disclosure of information that
is taken from the public record. Thus, for example, the statute, as
interpreted by the majority of the circuits, prohibits the disclosure from IRS
files (or Department files when disclosure has been made to the Department
under the statute) of a tax-crime defendant's name, or the fact that he was
under investigation or has been indicted for a particular tax crime. To the
extent that same information has been placed in the public record
(e.g., included in an indictment), its dissemination from the public
record does not violate the statute.
Although two circuits have held that once return information has been
made public in a judicial proceeding, the non-disclosure restrictions of
section 6103 no longer apply, Rowley v. United States, 76 F.3d
796, 799-801 (6th Cir. 1996); Lampert v.
United States
, 854 F.2d
335, 338 (9th Cir. 1988), three other circuits have held that even public
disclosure of return information does not lift the non-disclosure bar to the
same information in the files of the IRS, because the statute does not contain
an exception that permits the disclosure of return information after it has
been made public, Johnson v. Sawyer, 120 F.3d 1307, 1318-19 (5th
Cir. 1997); Mallas v.
United States
, 993 F.2d 1111, 1120 (4th
Cir. 1993); Rodgers v. Hyatt, 697 F.2d 899, 906 (10th Cir.
1983). The Seventh Circuit, in Thomas v.
United States
, 890
F.2d 18, 20-21 (7th Cir. 1989), concluded that an IRS press release based on
information in a court opinion did not violate the prohibitions of section
6103 because the "immediate source" of the information in the press release
was a public document. See also Rice v. United States,
166 F.3d 1088, 1091 (10th Cir. 1999) (holding that information about a
taxpayer being classified as "return information" turns on the "immediate
source" of the information).
Prosecutors should not make any out of court disclosures of return
information. They should exercise great care to ensure that any information
provided, for example, to the press, comes only from publicly available
information, such as the indictment. See Memorandum to All United
States Attorneys from Loretta Argrett, Assistant Attorney General, Tax
Division, re: Press Releases in Cases Involving the IRS (October 15,
1997), found in Chapter 2, supra, at 3-36 - 3-39.
42.04 "RETURN INFORMATION" DEFINED: 26 U.S.C. § 6103(b)
42.04[1] Generally
Section 6103(b) defines three categories of information: "return,"
"return information," and "taxpayer return information." A "return" is any
tax or information return filed with the Internal Revenue Service by, on
behalf of, or with respect to a taxpayer. See Section 6103(b)(1).
"Return information" is essentially any information relating to the taxpayer
received by, recorded by, prepared by, furnished to, or collected by the
Internal Revenue Service. See Section 6103(b)(2). This category
includes virtually all information about a taxpayer's dealings with the IRS,
including whether a particular person is a taxpayer, the amount of any
liability, and whether the taxpayer is, will be, or has been investigated. In
short, this category includes all information about a taxpayer and his or her
liability in the possession of the IRS. See Mallas v.
United States
,
993 F.2d 1111, 1118 (4th Cir. 1992) (information contained in a revenue
agent's report considered "return information"); Chamberlain v.
Kurtz, 589 F.2d 827, 840 (5th Cir. 1979) ("return information" is any
information concerning a taxpayer's liability which has been collected by
the IRS). See also
Church
of
Scientology
of
California
v. Internal
Revenue Service, 484
U.S.
9, 15 (1987). "Taxpayer return information"
is "return information" which is filed with, or furnished to, the Internal
Revenue Service by or on behalf of the taxpayer to whom the return
information relates. See Section 6103(b)(3). It would include, for
example, financial statements, offers in compromise, protest letters, and
similar documents.
42.04[2] Information Obtained from Non-IRS Sources Is Not "Return
Information"
Return information does not include information that does
not come from IRS files. Thus, information that a prosecutor gathers as part
of a grand jury investigation is not "return information" because it is not
information "collected by" the IRS. This is true even in a grand jury
investigation into tax offenses. Under Rule 6(e)(3)(A)(ii), Fed. R. Crim. P.,
IRS agents working on a grand jury investigation are "assist[ing] . . . [the]
attorney for the government in the performance of such attorney's duty to
enforce federal criminal law." The information that they gather at the
direction of the Assistant United States Attorney (AUSA), or under the
authority of the grand jury, is being collected by the Attorney General and
the grand jury. It is not information being "collected by" the IRS, and thus
is not "return information" under the section 6103(b) definition. See
Baskin v.
United States
, 135 F.3d 338, 342 (5th Cir. 1998)
(copies of checks obtained by grand jury not return information) Ryan v.
United States
, 74 F.3d 1161, 1163 (11th Cir. 1996) (financial
information independently obtained by prosecutor not "return information," as
it did not come from IRS files); Stokwitz v.
U.S.
Dept. of the
Navy, 831 F.2d 893, 897 (9th Cir. 1987) (taxpayer's retained copies of
returns seized from his desk by Navy investigators not "returns" or "return
information" under section 6103 because they did not come from IRS files).
42.05 PERMISSIBLE DISCLOSURES OF RETURNS AND RETURN INFORMATION
42.05[1] Generally
Subsections 6103(c) through (o) set out the situations in which returns
and return information may be disclosed. The subsections authorizing
disclosure to the Department of Justice for use in litigation, sections
6103(h) and 6103(i), are discussed in detail below. The other eleven
subsections under which disclosure of taxpayer returns and return information
may be authorized are as follows:
1. Section 6103(c) -- Disclosure of returns or return
information at the taxpayer's request. See, e.g., Tierney
v. Schweiker, 718 F.2d 449, 454 (D.C. Cir. 1983).
2. Section 6103(d) -- Release of returns and return
information to State tax officials and State and local law
enforcement agencies charged with the administration of State tax
laws to assist in the administration of such laws. See
Huckaby v. Internal Revenue Service, 794 F.2d 1041,
1046 (5th Cir. 1986).
N.B.: There is no other provision authorizing the disclosure
of returns and return information to State or local officials.
Thus, returns and return information may not be
disclosed to state agents or officers who may be working on task
forces or otherwise assisting prosecutors in investigating or
prosecuting Federal crimes. Disclosure for the sole and limited
purpose of assisting the Federal criminal investigation may be
appropriate to those State police officers or agents who have been
deputized as Deputy United States Marshals.
3. Section 6103(e) -- Disclosure of a taxpayer's returns
and return information to individuals who have a material interest
in that information. The section lists those persons who will be
deemed to have a material interest in such information
(e.g., either the husband or the wife in the case of a
joint return, a partner in a partnership, a stockholder owing more
than 1 percent of the outstanding stock of a corporation in the
case of a corporate return, etc.). See, e.g., Martin v.
IRS, 857 F.2d 722, 724 (10th Cir. 1988) (partnership
returns).
4. Section 6103(f) -- Disclosure of returns and return
information to committees of Congress.
See
Church
of
Scientology v. Internal Revenue Service, 484
U.S.
9, 15
(1987).
5. Section 6103(g) -- Disclosure of returns and return
information to the President, and employees of the White House
designated by the President. See
United States
v.
Barrett, 837 F.2d 1341, 1354 (5th Cir. 1988).
6. Section 6103(j) -- Disclosure of returns and return
information to be used in structuring the census and conducting
related statistical analyses. See Baskin v. United
States, 135 F.3d 338, 341 (5th Cir. 1998).
7. Section 6103(k) -- Disclosure of returns and return
information for tax administration purposes. Section 6103(k)(6)
permits the disclosure of return information by Service employees
for investigative purposes. Agents and other employees may
"disclose return information to the extent that such disclosure is
necessary in obtaining information, which is not otherwise
reasonably available . . . ." See Vote v. United
States, 753 F. Supp. 866, 870 (D.
Nev.
1990),
aff'd, 930 F.2d 31 (9th Cir. 1991). See also Barrett
v.
United States
, 795 F.2d 446, 450 (5th Cir. 1986), for a
discussion of information which is not "otherwise reasonably
available."
8. Section 6103(l) -- Disclosure of returns and return
information for purposes other than tax administration --
e.g., programs administered by the Social Security
Administration, Railroad Retirement Board, Department of Labor,
etc.. See
United States
v. Bacheler, 611 F.2d 443,
446 (3d Cir. 1979).
9. Section 6103(m) -- Disclosure of taxpayer identity
information to various agencies and individuals. See Ryan
v. Bureau of Alcohol, Tobacco and Firearms, 715 F.2d 644,
652 (D.C. Cir. 1983).
10. Section 6103(n) -- Disclosure of returns and return
information as necessary in conjunction with the "processing,
storage, transmission, and reproduction" of returns and return
information; and for purposes of "programming, maintenance,
repair, testing and procurement of equipment." See
Wiemerslage v.
United States
, 838 F.2d 899, 900 (7th
Cir. 1988).
11. Section 6103(o) -- Disclosure of returns and return
information relating to alcohol, tobacco and firearms taxes, and
returns and return information relating to the wagering excise tax
for limited purposes.
42.05[2] Section 6103(h) -- Disclosure to Certain Federal Officers and
Employees for Purposes of Tax Administration, etc.
Section 6103(h) is one of two provisions that authorize disclosure of
returns and return information to the Department of Justice for use in
investigating and prosecuting criminal cases. It governs the disclosure of
return information to specified federal officers and employees for purposes of
tax administration, including the use of returns and return information in
criminal and civil tax litigation. Section 6103(h)(1) provides the authority
for employees of the Department of the Treasury to have access to returns and
return information as needed for tax administration purposes. [FN4]
See First Western Govt. Securities, Inc. v. United
States, 796 F.2d 356, 360 (10th Cir. 1986).
42.05[3] Disclosures to the Department of Justice for Tax Administration
Section 6103(h)(2), which governs the disclosure of return information
to officers and employees of the Department of Justice in tax cases, states in
part:
In a matter involving tax administration, a return or return
information shall be open to inspection by or disclosure to officers and
employees of the Department of Justice (including
United States
attorneys) personally and directly engaged in, and solely for their
use in, any proceeding before a Federal grand jury or preparation
for any proceeding (or investigation which may result in such a
proceeding) before a Federal grand jury or any Federal or State court,
but only if --
(A) the taxpayer is or may be a party to the proceeding, or the
proceeding arose out of, or in connection with, determining the
taxpayer's civil or criminal liability, or the collection of such
civil liability in respect of any tax imposed under this title;
(B) the treatment of an item reflected on such return is or may
be related to the resolution of an issue in the proceeding or
investigation; or
(C) such return or return information relates or may relate to a
transactional relationship between a person who is or may be a
party to the proceeding and the taxpayer which affects, or may affect,
the resolution of an issue in such proceeding or investigation.
(Emphasis added.)
The italicized portions of the statutory language indicate the
circumstances under which returns and return information may be disclosed to
Department attorneys. First, the matter must involve "tax administration."
That term is defined in section 6103(b)(4) to include the enforcement and
litigation of the tax laws and "related statutes." Preparing for and
conducting grand jury investigations and prosecuting tax offenses, or offenses
charged under statutes that have been determined to be "related to" tax
administration, are activities that are part of "tax administration." For
cases involving the interpretation of "tax administration," See Rueckert
v. I.R.S., 775 F.2d 208, 209-12 (7th Cir. 1985);
United States
v. Mangan, 575 F.2d 32, 40 (2nd Cir. 1978).
Second, the disclosure is made to those attorneys who are "personally
and directly" involved in the litigation of the tax matter, and not to the
Department of Justice itself. Thus, the individual prosecutors or attorneys
handling a case or matter are responsible for controlling and managing the
returns and returns information and for any subsequent disclosures. The term
"personally and directly engaged in" includes supervisors and support staff.
Treas. Reg. § 301.6103(h)(2)-1.
Finally, the information to be disclosed to Department attorneys must
meet one of the criteria set out in (A), (B), and (C), commonly referred to as
the "party," "item," and "transaction" tests. Department attorneys may have
access to the return information of any taxpayer who is or may be a party to a
tax case, or whose liability gives rise to a case under the federal tax laws.
United States
v. Michaelian, 803 F.2d 1042, 1044 (9th Cir. 1986)
(disclosure to obtain search warrant); United States v. Olson,
576 F.2d 1267, 1270 (8th Cir. 1978) (taxpayer as party to case). Second,
under the "item" test, prosecutors may obtain those items on a third party's
return that are or may be related to a pending case or investigation.
Finally, Department attorneys involved in a tax case may be given access to
third party return information that reflects a transaction between the
taxpayer and the third party, if the information pertaining to the transaction
is or may be related to a pending case or investigation. Davidson v.
Brady, 559 F.Supp. 456, 461 (W.D. Mich. 1983), aff'd on other
grounds, 732 F.2d 552 (6th Cir. 1984). Under both the item test and the
transaction test, access to return information is limited to those portions of
the third party return that reflect the relevant item or transaction.
See S. Rep. No. 94-938(I) at 682 (1976).
42.05[3][a] Procedures for Disclosure
Section 6103(h)(3) provides two different methods by which taxpayer and
third party return information may be released to the Department of Justice.
The first method is used in any case that has been "referred" to the
Department. Upon referral, the Internal Revenue Service may disclose returns
and return information pertaining to the referred case to the Department
attorneys responsible for the case. See Section 6103(h)(3)(A);
United States
v. Bacheler, 611 F.2d 443, 447 (3d Cir. 1979). Although
the section contains no definition as to what constitutes a "referral," the
term has generally been construed as an institutional decision by the Internal
Revenue Service to request that Justice defend, prosecute or take other
affirmative action in a case, or where the Internal Revenue Service seeks pre-
referral advice from the Department.
The term "referral" is defined in section 7602(d) of the Internal
Revenue Code in the context of an administrative summons and includes a
recommendation for a grand jury investigation or criminal prosecution for
offenses connected with the administration or enforcement of the internal
revenue laws. However, a "referral" for section 6103 purposes is not limited
to a referral as defined in section 7602, but would also include other matters
where the Department of Justice is asked to prosecute, defend or take action
on a case on behalf of the IRS, including search warrants, summons
enforcement, writs of entry, etc. See
United States
v.
Michaelian, 803 F.2d 1042, 1048-49 (9th Cir. 1986) (disclosure to
Justice to obtain a search warrant.); Bacheler, 611 F.2d at 447-
48 (technical requirements of a referral);
United States
v. Chemical
Bank, 593 F.2d 451, 456-57 (2nd Cir. 1979) (technical requirements of
a referral). The term "referral" should also be understood to include
disclosures made for the purpose of obtaining pre-referral advice from the
Department.
In those instances where no "referral" has been made, the Department may
obtain tax returns and return information by a written request to the
Secretary of the Treasury from the Attorney General, the Deputy Attorney
General, or an Assistant Attorney General, that sets forth the need for
disclosure of a specific return or specific return information. Section
6103(h)(3)(B).
(N.B.: The authority to request returns and return information
by letter is limited to the specified officials and cannot be delegated.
Thus, a United States Attorney cannot use this provision to obtain returns or
return information.
Redford
v. United States, 84-1 U.S.M.C.
Par. 9421 (D.
Tenn.
1984).
42.05[3][b] Joint Tax-Non-Tax Criminal Investigation
Under specific limited conditions, prosecutors may use returns and
return information in the non-tax portion of a joint tax/non-tax investigation
under section 6103(h). Treas. Reg. § 301.6103(h)(2)-1 authorizes the use
of returns and return information in the non-tax portion of an investigation
pursuing both tax and non-tax charges if: (1) the return information has been
obtained for use in, and is being used in, the tax portion of the case; (2)
the tax portion of the investigation has been duly authorized by the Tax
Division; and (3) the information will be directly used in connection with
the tax administration proceeding. The regulation also requires that if the
tax administration portion of the investigation is terminated, the prosecutor
cannot continue to use the information without obtaining an order under
section 6103(i). [FN5]
42.05[3][c] Investigative Disclosures
Section 6103(h) contains no specific provision for investigative
disclosures by federal prosecutors. Treas. Reg. §
301.6103(h)(2)-1(b)(i)-(iii) allows redisclosure of returns and return
information by federal prosecutors. Such redisclosures include, but are not
limited to, disclosures made: (1) to accomplish any purpose or activity of the
nature described in 26 C.F.R. 301.6103(k)(6)-1 (e.g., verify
correctness of return; determine responsibility for filing return; establish,
verify or collect any tax liability or penalty; identify misconduct under the
tax laws; obtain services of persons with special knowledge or skill; (2) to
interview and obtain relevant information from a taxpayer or third-party
witness who may be called in the proceeding; or (3) to conduct plea or
settlement negotiations, or to obtain stipulations of facts. Redisclosure of
return or taxpayer return information for such purposes is permitted only in
those instances where the proper purpose of section 6103(h) cannot otherwise
be accomplished without the disclosure.
42.05[3][d] Disclosure in Judicial and Administrative Tax Proceedings
Section 6103(h)(2) only authorizes the disclosure of tax return
information to the Department of Justice. Section 6103(h)(4) governs
the Department's further dissemination of that material in judicial and
administrative tax proceedings. The section contains "party," "item," and
"transaction" tests similar to those in section 6103(h)(2). It also
authorizes disclosure:
(D) to the extent required by order of a court pursuant to section 3500
of title 18, United States Code, or rule 16 of the Federal Rules of
Criminal Procedure, such court being authorized in the issuance of such
order to give due consideration to congressional policy favoring the
confidentiality of returns and return information as set forth in this
title.
However, such return or return information shall not be disclosed as
provided in subparagraph (A), (B), or (C) if the Secretary determines
that such disclosure would identify a confidential informant or
seriously impair a civil or criminal tax investigation.
Return information may be disclosed in judicial proceedings, pursuant to
section 6103(h)(4), as long as one of the four listed criteria is met.
Conklin v. United States, 61 F.3d 915 (10th Cir. 1995) (unpublished
table decision) (application of section 6103(h)(4)(B)). The authority in
section 6103(h)(4) extends only to judicial and administrative tax
proceedings; it does not allow disclosures to the public or for any other
purpose.
Note that sections 6103(h)(4)(A) - (C) contain more stringent tests than
the parallel tests in sections 6103 (h)(2)(A) - (C). Under subsection
(h)(2), the IRS is permitted to disclose returns and return information to
the Department of Justice if the taxpayer "is or may be" a party to the
proceeding, the treatment of an item on the return "is or may be" related to
the resolution of an issue in the proceeding or investigation, or such
return or return information "relates or may relate" to a transactional
relationship between a person who is or may be a party and the taxpayer.
However, in section (h)(4), the disclosure of the information by the
Department is limited to those instances in which a "taxpayer is a
party," the information "is directly related to" the resolution of an
issue in the proceeding or investigation, or such return or return
information "directly relates to" a transactional relationship between a
person who is a party and the taxpayer. [FN6] See
United States
v. Mangan, 575 F.2d 32, 38-39 (2d Cir. 1978); United
States v. Tsanas, 572 F.2d 340, 348 (2d Cir. 1978). [FN7]
Finally, section 6103(h)(4) allows the prosecutor to produce returns and
return information when ordered to do so by the court to meet the Government's
discovery obligations. Standing court rules providing for discovery are
sufficient to meet the requirement for a court order. Although that section
specifically refers only to Federal Rule of Criminal Procedure 16 and 18
U.S.C. ' 3500, it must be read to allow disclosure of return information
necessary to meet the Government's obligation to provide exculpatory
information to the defendant under Brady v. Maryland, 373
U.S.
83 (1963), and
United States
v. Giglio, 405
U.S.
150
(1972).
42.05[4] Section 6103(i) - Disclosure to Federal Officers or Employees
for Administration of Federal Laws Not Related to Tax Administration
42.05[4][a] Generally
Section 6103(i) authorizes the disclosure of tax returns and return
information to Department of Justice prosecutors for use in nontax criminal
investigations and prosecutions. The statute distinguishes between
information obtained from the taxpayer or his representative and return
information in general. Section 6103(i) provides that a federal agency
enforcing a nontax federal criminal law must obtain an ex parte order
in order to obtain a tax return or taxpayer return information. Other return
information can be obtained through a written request by a specifically
designated federal official.
42.05[4][b] Disclosure Pursuant to Court Order: Tax Returns and Taxpayer
Return Information
Section 6103(i)(1) provides that tax returns and taxpayer
return information (i.e., return information that was submitted to
the IRS by the taxpayer or his representative) may, upon the grant of an ex
parte order by a Federal district court judge or magistrate, be disclosed
to officers and employees of any federal agency (not to the agency itself) for
nontax criminal investigation purposes.
