One of the principal responsibilities of a SEP agent is to obtain early and accurate information.

SEP agents must initiate and proceed with in-depth examinations on the assumption that cases will result in litigation. It is, therefore, incumbent upon the SEP agent to obtain as much documentation as possible.

During the examination, the SEP agent may obtain oral testimony which may significantly affect the outcome of the case. The SEP agent should have the individual attest to the accuracy of their statements by preparing and signing an affidavit or statement.

The average individual is not familiar with the law, therefore, the SEP agent should advise them that preparing or the giving of a false statement is a criminal offense. Therefore, an attested statement has greater validity when properly prepared and voluntarily given.

Affidavits and statements are used to:

Some of the methods to record statements by a SEP agent are as follows:

The SEP agent may decide to administer an oath to the taxpayer and/or witness at the start of the interview. The authority to administer oaths and affirmations, whether pursuant to the issuance of a summons or a request for information, is in IRC sections 7602 and 7622. While CI may normally administer oaths on a regular basis, it is recommended that SEP agents seek Area Counsel guidance prior to the creation of an oath to record statements.

For additional information on oaths and the waiver of constitutional rights, see IRM 9.4.5.11.3.2.2 and related exhibits.

Requests to make audio tape, audio disk, stenographic or other verbatim recordings of interviews will ordinarily be allowed except where the taxpayer or representative's behavior is disruptive. Requests to make video recordings will not be permitted.

A request to record an interview requires:

If the ten (10) calendar day advance notice is not given and/or Service equipment is not available, a new appointment will be scheduled.

When the SEP agent has concerns that testimony may later change, the Service can record an interview of a taxpayer or witness. In instances where the Service initiates the recording, the provision to record at an IRS office is not required.

The Service must notify the individual ten (10) calendar days in advance of the interview using Pattern Letter 2156. The Territory Manager must approve all Service initiated recordings. See Exhibit 4.10.3-1 for a copy of the pattern letter.

At the outset of the recording the SEP agent must identify themselves, provide the taxpayer's name and SSN/EIN, the date, time, place and purpose of the proceeding. Each participant in the proceeding also must identify themselves, their role in the proceeding, and their acknowledgement to the making of a verbatim recording.

The arrival or departure of a participant must be noted on the recording.

Written records presented to the taxpayer or witness must be clearly identified on the recording.

At the conclusion, the SEP agent should state the interview has been completed, the recording has ended and the time.

Immediately after the interview, the recording should be labeled with the date and a brief description of the contents.

Upon request, the Service will provide the taxpayer with a transcript or copy of the recording if the taxpayer provides reimbursement for the cost of the transcription or reproduction.

IRC section 7521(a)(2) requires that the Service notify the taxpayers of its intent to record an interview. The code section does not require that the taxpayer must consent to the audio recording. Cumulative Bulletin Notice 89-51 (1989-1 CB 691) does specify that the taxpayer must be given prior notice of the intent to record an interview and provide a transcript upon request. See also IRM 4.10.3.2.5 (Examination of Returns chapter) for further guidance on audio recordings.

SEP agents can utilize evidence secured by federal, state or local law enforcement agencies in securing leads and developing cases.

SEP agents should obtain a copy of the search warrant and/or inventory to document how the evidence was obtained.

Consult Area Counsel if there is a motion to suppress the search warrant or other technical problems with the search warrant evidence. In U.S. v. Janis, 76-2 USTC 16,299, 428 U.S. 433, 96 S. Ct. 3021, the Service was allowed to use evidence for civil purposes that was suppressed from criminal usage by the local authorities.

Evidence developed from a court ordered electronic monitoring can be an important source of information in SEP cases. The evidence may support a computation of income for a period of time in cases such as wagering or narcotics as well as links to assets, expenditures, associates of a taxpayer or other leads. Generally, the evidence will consist of tapes of actual telephone conversations, listing of telephone numbers called (Pen Register) and places from which calls were received (Trap and Trace).

Title 18 USC section 2517 sets forth a statutory theme under which disclosure and use of intercepted oral and wire communications are permitted. Section 2517(1) permits law enforcement officers who obtain wiretap evidence to turn such evidence over to other law enforcement officers for the latter's use. Section 2517(2) permits the receiving law enforcement officer to use wiretap evidence in their official duties, such as issuing summonses; obtaining jeopardy assessments; investigating tax offenses or preparing a Special Agent's Report (SAR).

Caution -Title 18 USC section 2515 prohibits the use of evidence derived from intercepted wire communications, if that information is in violation of the law. Before receiving such evidence, SEP agents must obtain the subsequent court order releasing the evidence to the IRS for use in an income tax examination. Follow the procedures set forth below to preserve the IRS's right to use this evidence.

The SEP agent is responsible for initiating an application for disclosure. On a U.S. District Court approved case the application should be made through Area Counsel to the U.S. Attorney's office. On a state court approved case, the application will be made through Area Counsel to either the District Attorney's office or the U.S. Attorney's office. When the order is obtained through the District Attorney's office, the final order should be forwarded to Area Counsel after receipt for its approval of the order.

Once approval of the court and/or Area Counsel is secured, the SEP agent will make arrangements for a SA to be assigned to accompany the SEP agent to secure the evidence. The SA will make a determination about the criminal aspects of the evidence received. If none is found or prosecution is declined due to dual prosecution or other reasons, the SA will refer the evidence to the SEP agent for civil purposes.

Disclosure by the SEP agent should be limited to those named on the order. Title 18 USC section 2517(3) allows disclosure of such evidence while giving testimony under oath in any proceeding held under the authority of the United States.

When closing an unagreed case, the electronic communications evidence must be removed from the case file and stored in a secured access storage area within an IRS office to prevent unauthorized disclosure. The workpapers should indicate that additional evidence is under the control of the SEP agent and would be available for litigation. On an unagreed case, the evidence should be held in the secured area until the statutes for any claims have expired at which time the evidence should be destroyed.

See IRM 31.7.5 (Electronic Surveillance) for further information on electronic surveillance.