**CHAPTER 400 -- INVESTIGATIONS**

(400)-290 [Disclosure Investigations]{.underline}

290.1 [Overview.]{.underline}

TIGTA-Office of Investigations (OI) initiates investigations to
determine if unauthorized disclosure or inspection of tax returns or
return information has occurred. This Section addresses:

-   [Authority](#Authority)

-   [Statutory Protections of Confidential Taxpayer
    Information](#StatutoryProtectionsConfidentialTaxInfo)

-   [Definitions](#Definitions)

-   [Criminal Disclosure and Inspection
    Statutes](#CriminalDisclosureStatutes)

-   [Initiation and Referral of
    Investigations](#InitiationReferralInvestigations)

-   [Post Indictment Requirements](#PostIndictmentProcedures)

-   [Civil Lawsuits for Unauthorized
    Disclosures](#CivilSuitsDisclosureViolation)

Contact the TIGTA Disclosure Officer to resolve any questions regarding
unauthorized disclosure or inspection of tax returns or return
information.

290.1.1 [Acronyms
Table](../../acronyms-table/acronyms-table.doc#AcronymsTable)[.]{.underline}

290.2 []{#Authority .anchor}[Authority.]{.underline}

Section 9(a) of the [IG Act](http://www.ignet.gov/pande/leg/igact.pdf),
5 U.S.C. Appendix 3, transfers the Office of Chief Inspector of the
Internal Revenue Service (IRS) and its functions, powers, and duties to
TIGTA. Section 9(b) transfers the authorizations of the Office of Chief
Inspector of the IRS to TIGTA. [Treasury Order
115-01](http://www.ustreas.gov/regs/to115-01.htm), dated January 14,
1999, gives TIGTA the duty and responsibility to conduct investigations
relating to the programs and operations of the IRS. Treasury Order
115-01 also gives TIGTA the authority to enforce criminal provisions of
the internal revenue laws and other criminal provisions of law relating
to internal revenue for the enforcement of which the Secretary is
responsible, among others. See [26 U.S.C. §
7608(b)](http://straylight.law.cornell.edu/uscode/html/uscode26/usc_sec_26_00007608----000-.html).

[Section
6-4.200](http://www.usdoj.gov/usao/eousa/foia_reading_room/usam/title6/4mtax.htm#6-4.200)
of the U.S. Attorneys Manual provides that, "The Assistant Attorney
General, Tax Division, has responsibility for all criminal proceedings
arising under the internal revenue laws except \... unauthorized
disclosure of information, 26 U.S.C. § 7213,\...." This language means
that alleged violations of § 7213 shall be taken to the U.S. Attorney
(USA). According to the U.S. Attorneys Manual [Section
9-79.420](http://www.usdoj.gov/usao/eousa/foia_reading_room/usam/title9/79mcrm.htm#9-79.420),
"USA's are required to consult with the Public Integrity Section of
DOJ's Criminal Division before instituting grand jury proceedings,
filing an information, or seeking an indictment of disclosure violations
under § 7213." While the Manual has not been updated since enactment of
The Taxpayer Browsing Protection Act, the Pubic Integrity Section of
DOJ's Criminal Division has indicated that it interprets the manual as
categorizing alleged violations of § 7213A the same as alleged
violations of § 7213.

290.3 []{#StatutoryProtectionsConfidentialTaxInfo .anchor}[Statutory
Protections of Confidential Taxpayer Information.]{.underline}

Congress enacted [26 U.S.C. §
6103](http://straylight.law.cornell.edu/uscode/html/uscode26/usc_sec_26_00006103----000-.html)
to establish the confidentiality of tax returns and tax return
information. Congress also passed laws establishing criminal penalties
and creating civil causes of action for violations of § 6103 to be used
to enforce the protections of § 6103.

[26 U.S.C. §
7213](http://straylight.law.cornell.edu/uscode/html/uscode26/usc_sec_26_00007213----000-.html)
makes it a felony for a current or former federal government employee,
or a contractor providing tax administration services under § 6103(n)
willfully to disclose tax returns or tax return information in a manner
not authorized by Title 26.

[26 U.S.C. §
7213A](http://straylight.law.cornell.edu/uscode/html/uscode26/usc_sec_26_00007213---A000-.html)
makes it a misdemeanor for current federal government employees, or a
contractor providing services under 26 U.S.C. § 6103(n), willfully to
inspect tax returns or tax return information except as authorized by
Title 26.

[26 U.S.C. §
7431(a)(1)](http://straylight.law.cornell.edu/uscode/html/uscode26/usc_sec_26_00007431----000-.html)
permits a taxpayer to bring a civil action for damages against the
United States if a federal employee knowingly, or by reason of
negligence, inspects or discloses that taxpayer's return or return
information in violation of 26 U.S.C. § 6103. See
[Exhibit(400)-290.1](../../400-exhibits/exhibit400-290-1.doc).

290.4 []{#Definitions .anchor}[Definitions.]{.underline}

This section contains the definitions of the following terms:

-   Unauthorized Disclosure

-   Unauthorized Inspection

-   Return

-   Return Information

-   Taxpayer Identity

-   Service Operations

290.4.1 [Unauthorized Disclosure.]{.underline} A disclosure occurs when
a return or return information is made known to any person in any manner
whatever. See 26 U.S.C.

§ 6103(b)(8). An unauthorized disclosure is a disclosure that is not
authorized by Title 26.

290.4.2 [Unauthorized Inspection.]{.underline} Inspection means "any
examination of a return or return information." See 26 U.S.C. §
6103(b)(7). An unauthorized inspection is an inspection that is not
authorized by Title 26.

290.4.3 [Return.]{.underline} 26 U.S.C. § 6103(b)(1) states:

"The term '**return**' means any tax or information return, declaration
of estimated tax, or claim for refund required by, or provided for or
permitted under, the provisions of this title which is filed with the
Secretary by, on behalf of, or with respect to any person, and any
amendment or supplement thereto, including supporting schedules,
attachments, or lists which are supplemental to, or part of, the return
so filed."

290.4.4 [Return Information.]{.underline} 26 U.S.C. § 6103(b)(2) states:

"The term '**return information**' means: A taxpayer\'s identity, the
nature, source, or amount of his income, payments, receipts, deductions,
exemptions, credits, assets, liabilities, net worth, tax liability, tax
withheld, deficiencies, over assessments, or tax payments, whether the
taxpayer\'s return was, is being, or will be examined or subject to
other investigation or processing, or any other data, received by,
recorded by, prepared by, furnished to, or collected by the Secretary
with respect to a return or with respect to the determination of the
existence, or possible existence, of liability (or the amount thereof)
of any person under this title for any tax, penalty, interest, fine,
forfeiture, or other imposition, or offense, and

Any part of any written determination or any background file document
relating to such written determination (as such terms are defined in [26
U.S.C. §
6110](http://straylight.law.cornell.edu/uscode/html/uscode26/usc_sec_26_00006110----000-.html)(b))
which is not open to public inspection under 26 U.S.C. § 6110, and

Any advance pricing agreement entered into by a taxpayer and the
Secretary and any background information related to such agreement or
any application for an advance pricing agreement, but such term does not
include data in a form which cannot be associated with, or otherwise
identify, directly or indirectly, a particular taxpayer. Nothing in the
preceding sentence, or in any other provision of law, shall be construed
to require the disclosure of standards used or to be used for the
selection of returns for examination, or data used or to be used for
determining such standards, if the Secretary determines that such
disclosure will seriously impair assessment, collection, or enforcement
under the internal revenue laws.\'\'

**Note:** The Supreme Court unanimously ruled that information protected
by 26 U.S.C. 6103 retains its protected character even if direct and
indirect identifiers are removed.

290.4.5 [Taxpayer Identity.]{.underline} 26 U.S.C. § 6103(b)(6) states:

"The term '**taxpayer identity**' means the name of a person with
respect to whom a return is filed, his mailing address, his taxpayer
identifying number (as described in § 6109), or a combination thereof."

290.4.6 [Service Operations.]{.underline} In addition to possible
criminal violations, IRS employees' unauthorized disclosures of
confidential taxpayer information is a violation of [31 CFR Part 0,
Department of the Treasury Employee Rules of
Conduct](http://www.access.gpo.gov/nara/cfr/waisidx_00/31cfr0_00.html)
and [IRS Document
12011](http://publish.no.irs.gov/DOCS/PDF/35691D03.PDF), Plain Talk
About Ethics and Conduct.

290.[]{#CriminalDisclosureStatutes .anchor}5 [Criminal Disclosure and
Inspection Statutes.]{.underline}

Criminal disclosure and inspection investigations are based on alleged
violations of the following statutes:

-   [26 U.S.C. §
    7213](http://straylight.law.cornell.edu/uscode/html/uscode26/usc_sec_26_00007213----000-.html)
    unauthorized disclosure of tax returns or tax return information

-   [26 U.S.C.
    7213A](http://straylight.law.cornell.edu/uscode/html/uscode26/usc_sec_26_00007213---A000-.html)
    UNAX-unauthorized inspection of tax returns or tax return
    information

-   [26 U.S.C. §
    7216](http://straylight.law.cornell.edu/uscode/html/uscode26/usc_sec_26_00007216----000-.html)
    disclosure by a tax return preparer

-   [18 U.S.C. §
    1030(a)(2)(B)](http://www4.law.cornell.edu/uscode/18/1030.html)
    unauthorized computer access; if the computer access is to tax
    return information the investigation should consider § 7213 or §
    7213A

-   [18 U.S.C. § 1905](http://www4.law.cornell.edu/uscode/18/1905.html)
    confidential information other than tax returns or return
    information; the unauthorized disclosure or inspection of tax
    returns or return information should be investigated under § 7213 or
    § 7213A

290.5.1 [26 U.S.C. § 7213.]{.underline} The elements of an offense under
26 U.S.C. § 7213, Unauthorized disclosure of information, as applied to
federal government employees, are:

-   Current or former officer or employee of the United States, or
    contractor providing tax administration services under 26 U.S.C.
    6103(n)

-   Willfully;

-   Discloses;

-   Tax returns or return information;

-   In violation of Title 26.

[26 U.S.C. §
6531](http://straylight.law.cornell.edu/uscode/search/display.html?terms=6531&url=/uscode/html/uscode26/usc_sec_26_00006531----000-.html)
provides that the statute of limitations for 26 U.S.C. § 7213 is three
years from the date of the offense.

The penalties upon conviction under 26 U.S.C. § 7213 include
imprisonment for not more than five years, a fine not to exceed \$5,000,
or both, and the costs of prosecution. Conviction results in dismissal
from office or discharge from employment.

290.5.2 [26 U.S.C. § 7213A.]{.underline} The elements of an offense
under 26 U.S.C. § 7213A, Unauthorized inspection of returns or return
information, as applied to federal government employees are:

-   An officer or employee of the United States,

-   Willfully;

-   Inspects see 26 U.S.C. § 6103(b)(7);

-   Any return or return information see 26 U.S.C. § 6103(b)(1) and
    (b)(2);

-   In violation of Title 26.

The statute of limitations for § 7213A is also found in 26 U.S.C. § 6531
and requires that an indictment or information be brought within three
years after the commission of the offense.

Penalties upon conviction include a fine not exceeding \$1,000,
imprisonment for not more than a year, or both. Conviction results in
dismissal from office or discharge from employment.

290.5.3 [26 U.S.C. § 7216.]{.underline} The elements of an offense under
26 U.S.C. § 7216, Disclosure or use of information by preparers of
returns, are:

-   Any person in the business of preparing, or providing services in
    connection with the preparation of, tax returns; or any person who
    for compensation prepares any such return for any other person;

-   Knowingly or recklessly;

-   Discloses any information furnished for, or in connection with, the
    preparation of a tax return; or uses the tax preparation information
    for any purpose other than to prepare or assist in preparing a
    return.

The statute of limitations is three years from the date of the offense,
as provided in 26 U.S.C. § 6531.

A violation of this section is a misdemeanor punishable by imprisonment
for not more than one year, a fine of not more than \$1,000, or both;
and the costs of prosecution.

4.  [18 U.S.C. § 1030(a)(2)(B).]{.underline} The elements of an offense
    under 18 U.S.C.

§ 1030(a)(2)(B), Fraud and related activity in connection with
computers, are:

-   Any individual not necessarily an employee or agent of the United
    States;

```{=html}
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```
-   Intentionally;

-   Accesses a computer;

-   Without authorization or exceeding authorization; and

-   Obtains information from any department or agency of the United
    States.

**Note:** A 18 U.S.C. § 1030(a)(2)(B) investigative file likely contains
the "return information" of third parties.

The statute of limitations applicable to 18 U.S.C. § 1030 is five years
after the date of the alleged offense. See [18 U.S.C. §
3282](http://www4.law.cornell.edu/uscode/18/3282.html).

The penalties upon conviction may include imprisonment for up to ten
years, a fine, or both depending on the conviction history of the
individual and certain factual characteristics of the offense. See 18
U.S.C. § 1030(c) and [18 U.S.C. §
3571](http://www4.law.cornell.edu/uscode/18/3571.html).

290.6 []{#InitiationReferralInvestigations .anchor}[Initiation and
Referral of Investigations.]{.underline}

The type of investigation initiated and the referral procedures are
based on:

-   The status of the subject at the time the alleged misconduct
    occurred

-   The specific statute violation

All allegations relating to disclosure violations should use the
Performance and Results Information System (PARIS) Profile
"UNAX/Disclosure" and the appropriate violation code.

Contact the TIGTA Office of Chief Counsel (OCC) to resolve any questions
regarding disclosure type investigations.

290.6.1 [IRS Employee.]{.underline} Follow the steps listed in the table
below if the person alleged to have committed a disclosure or
unauthorized access violation was an IRS employee at the time the
disclosure or UNAX is alleged to have occurred:

+-------------------------------+--------------------------------------+
| **If an IRS employee\...**    | **Then\...**                         |
+-------------------------------+--------------------------------------+
| Violates 26 U.S.C. § 7213     | 1\) Contact TIGTA OCC, if necessary. |
|                               |                                      |
|                               | 2\) Initiate and conduct an Employee |
|                               |                                      |
|                               | Investigation.                       |
|                               |                                      |
|                               | 3\) Refer to the USA.                |
|                               |                                      |
|                               | 4\) Refer to IRS management.         |
+-------------------------------+--------------------------------------+
| Violates 26 U.S.C. § 7213A    | 1\) Refer to Strategic Enforcement   |
|                               | Division                             |
|                               |                                      |
|                               | (SED) for preliminary analysis, as   |
|                               |                                      |
|                               | necessary.                           |
|                               |                                      |
|                               | 2\) Initiate and conduct an Employee |
|                               |                                      |
|                               | Investigation, if warranted.         |
|                               |                                      |
|                               | 3\) Refer to USA.                    |
|                               |                                      |
|                               | 4\) Refer to IRS management.         |
+-------------------------------+--------------------------------------+
| Violates 18 U.S.C. §          | 1\) Initiate and conduct an Employee |
| 1030(a)(2)(B)                 |                                      |
|                               | Investigation.                       |
|                               |                                      |
|                               | 2\) Refer to USA.                    |
|                               |                                      |
|                               | 3\) Refer to IRS management.         |
+-------------------------------+--------------------------------------+
| Violates 18 U.S.C. § 1905     | 1\) Initiate and conduct an Employee |
|                               |                                      |
|                               | Investigation.                       |
|                               |                                      |
|                               | 2\) Refer to USA.                    |
|                               |                                      |
|                               | 3\) Refer to IRS management.         |
+-------------------------------+--------------------------------------+

290.6.2 [Tax Preparer.]{.underline} If a tax preparer allegedly violates
26 U.S.C. § 7216:

-   Initiate and conduct a Non-Employee (Disclosure) Investigation.

-   Refer to USA.

-   If the preparer is an enrolled practitioner, forward the report to
    the IRS Office of Professional Responsibility. See [Section
    300.8.1](../../400-300/chapter400-300.doc#ReferralToDirectorOfPractice)
    of this Chapter.

290.6.3 [State Employee.]{.underline} If a state employee allegedly
violates 26 U.S.C. § 7213 concerning return or return information
obtained by the state as a result of a Federal-State agreement:

-   Initiate and conduct a Non-Employee (Disclosure) Investigation.

-   Refer to USA.

**Note:** If the return or return information was obtained by the state
as a result of a state law requiring the taxpayer to submit a copy of
his/her federal tax return with his/her state return, then the
disclosure of the return or return information cannot be prosecuted
under 26 U.S.C. § 7213. See [Chapter 700 Chief Counsel, Section
70.5](../../../chapter700-counsel/700-70/700-70.doc#Referrals) of the
TIGTA Operations Manual.

The Referral Memorandum (Form OI 2076) should be annotated in the
remarks section advising the Internal Revenue Service Investigations
Management & Process Improvement (IRS-IM) to forward a copy of the
Report of Investigation (ROI) to the address below for referral to the
Federal-State Program:

> National Director, Governmental Liaison and Disclosure
>
> Communications and Liaison, IRS
>
> CL:GLD
>
> 1111 Constitution Avenue, NW, Room 1609
>
> Washington, D.C. 20224

290.7 []{#PostIndictmentProcedures .anchor}[Post Indictment
Requirements.]{.underline}

The IRS is required by law to notify victims of disclosure or
unauthorized access after an indictment or information is filed
involving the victim's tax information.

290.7.1 [26 U.S.C. § 7431 Notifications.]{.underline} Upon information
or indictment under 26 U.S.C. § 7213, 26 U.S.C. § 7213A, or 18 U.S.C. §
1030(a)(2)(B), field personnel will notify the SAC-Operations of the
indictment or information, and provide the following information:

-   Copy of the indictment or information.

-   Address of the clerk of court where the indictment/information is
    filed.

-   Name, SSN, and last known address of the taxpayer(s) whose account
    information is the subject of the indictment/information.

The SAC-Operations, will provide the information to the IRS Office of
Security and Privacy, which will notify the affected taxpayer(s)
pursuant to the notification provision of 26 U.S.C. § 7431(e).

290.8 []{#CivilSuitsDisclosureViolation .anchor}[Civil Suits for a
Disclosure Violation.]{.underline}

Under 26 U.S.C. § 7431, a taxpayer may sue the United States alleging an
unauthorized disclosure of return or return information by a current or
former federal employee. The IRS Office of Assistant Chief Counsel
(Disclosure and Privacy Law) notifies TIGTA-OI and requests an Employee
Investigation when necessary. See
[Exhibit(400)-290.1.](../../400-exhibits/exhibit400-290-1.doc)

290.8.1 [Notification of a Lawsuit Under 26 U.S.C. § 7431.]{.underline}
The IRS Office of Assistant Chief Counsel (Disclosure and Privacy Law)
notifies the TIGTA OCC that a 26 U.S.C. § 7431 lawsuit has been filed
and provides a copy of the complaint to the TIGTA OCC. The TIGTA OCC
forwards the complaint to the Assistant Special Agent-in-Charge (ASAC),
Complaints Management Team (CMT), who researches the TIGTA-OI indices
and provides any relevant information to the IRS Office of Assistant
Chief Counsel (Disclosure and Privacy Law).

The TIGTA OCC will coordinate with TIGTA-OI regarding what action will
be taken if TIGTA receives a complaint or allegation concerning the
disclosure.

If there is an open TIGTA investigation concerning the disclosure at
issue in the

26 U.S.C. § 7431 lawsuit, TIGTA-OI will coordinate with the TIGTA OCC on
whether to suspend the investigation pending the outcome of the 26
U.S.C. § 7431 lawsuit. Absent information to the contrary, TIGTA-OI will
suspend investigation pending the outcome of the 26 U.S.C. § 7431
lawsuit.

If requested by the IRS Office of Assistant Chief Counsel (Disclosure
and Privacy Law), TIGTA-OI will conduct an Employee Investigation.

The IRS Office of Assistant Chief Counsel (Disclosure and Privacy Law)
will immediately refer to TIGTA-OI any evidence of a violation of 26
U.S.C. § 7213 or any other statute for appropriate investigation.

290.8.2 [Investigating Disclosure Torts.]{.underline} The IRS Office of
Assistant Chief Counsel (Disclosure and Privacy Law) will sometimes
request that TIGTA-OI conduct an Employee Investigation when a 26 U.S.C.
§ 7431 lawsuit has been filed by contacting TIGTA OCC.

-   After receiving notification from TIGTA OCC of the request for an
    Employee Investigation, TIGTA-OI will forward the request with a
    copy of the

> § 7431 complaint to the appropriate field division.

-   The field division will initiate an Employee Investigation.

-   The field division pursues all investigative leads requested. The
    field division interviews the taxpayer that filed the § 7431 suit by
    contacting the taxpayer\'s attorney/representative if the taxpayer
    has an attorney/representative or the taxpayer directly if the
    taxpayer has no attorney/representative.

-   If the investigation discloses evidence indicating a probable
    violation of 26 U.S.C. § 7213, the field division will notify TIGTA
    OCC to suspend the Employee Investigation, and TIGTA OCC will
    apprise the IRS Office of Assistant Chief Counsel (Disclosure and
    Privacy Law).

Within 60 days, the TIGTA OCC will coordinate with TIGTA-OI to advise
the investigating field division of the course of action to be taken.

290.8.3 [Reporting Disclosure Torts.]{.underline} Prepare Employee
Investigations following instructions contained in [Section
250.7](../../400-250/chapter400-250.doc#ROI) of this Chapter, except
there will be no "Allegation" section.

Distribute an original and two copies of the ROI to TIGTA OCC within 30
days after the date the request for investigation is received by the
field division.

The TIGTA OCC sends the ROI to the IRS Office of Assistant Chief Counsel
(Disclosure and Privacy Law).

The SAC will, if deemed necessary, provide a copy of the ROI to the
appropriate IRS office for informational purposes.