25.5.5.4 (04-30-1999)
Rights and Privileges of Person Summoned
1.Persons summoned to testify before the Service or to produce records may assert certain rights or defenses including the following:
A.Fifth Amendment Privilege Against Self Incrimination
B.Right to Be Represented by Counsel
C.Attorney-Client, Federally Authorized Tax Practitioner-Taxpayer, Husband-Wife, and Clergy-Penitent Privileges
D.Right to Make an Audio Recording of the Proceeding
E.IRC 7609 Noticee's Right to Petition to Quash a Third-Party Summons
F.Right of Third-Party Witness to Refuse Unreasonable Requests and to Raise Appropriate Defenses
G.Representation Issues
H.Disclosure Issues
25.5.5.4.1 (04-30-1999)
Fifth Amendment Privilege Against Self Incrimination
1.The Fifth Amendment to the Constitution provides that no person shall be compelled to be a witness against himself. However, information or evidence furnished voluntarily by an individual taxpayer or witness who has been summoned may be used even though it may be incriminating.
2.IRC 7602 authorizes the Service to summon taxpayers and third parties to testify and to produce books and records. However, if answering a question would tend to incriminate the summoned person, that person may assert his or her Fifth Amendment privilege and refuse to answer. In contrast, a summoned person has no Fifth Amendment privilege in the contents of voluntarily created, pre-existing documents because the Government did not compel that person to create the documents. However, the act of producing those documents may tend to incriminate a summoned person because the mere act of production compels that person to tacitly admit that the documents exist, they are in that person’s possession, and he or she believes the documents produced are those required by the summons. Whether any of these tacit admissions may tend to incriminate a summoned person will depend on the facts and circumstances of each case. Consequently, that person may have a valid Fifth Amendment privilege against producing voluntarily created, pre-existing documents. This situation may exist when a taxpayer (or other person) is summoned to produce the records of his or her sole proprietorship.
3.If a taxpayer transfers the records of his or her sole proprietorship to another person, the Service can summon the third party to produce those records. The taxpayer cannot raise a Fifth Amendment objection to prevent a summoned third party from producing these records because the privilege against self-incrimination is personal to the taxpayer, i.e., it extends only to testimony and records sought from the taxpayer. This is true even though the taxpayer could have successfully avoided producing the records pursuant to a Fifth Amendment objection when they were in his or her possession. However, a significant exception to this rule exists when the taxpayer transfers the records of his or her sole proprietorship to an attorney to obtain legal advice. If, under these circumstances, the taxpayer could have avoided producing these records while they were in his or her possession, the attorney-client privilege will prevent the Service from summoning the records from the attorney so long as the taxpayer transferred the records to obtain legal advice.
Note:
IRC 7525 extends the attorney-client privilege to communications between a taxpayer and a federally authorized tax practitioner in noncriminal tax matters before the Service and noncriminal tax proceedings in federal court. See IRM 25.5.5.4.3(1)b, Privileged Communication and Summons.
4.While a warning of constitutional privilege against self-incrimination (e.g., "You have the right to not answer questions that may incriminate you." ) may not be required as a matter of law, such warning may have substantial significance from an evidentiary standpoint in overcoming a contention that the testimony or information was given involuntarily, under compulsion. A witness who contends that the testimony or information was given involuntarily, under compulsion, has the burden of sustaining that contention.
5.Summonsing a taxpayer or other witness to take a handwriting exemplar is within the authority of IRC 7602 . This does not violate any constitutional rights or policies enunciated by Congress. Compulsion of handwriting exemplars is neither a search nor a seizure subject to Fourth Amendment protections nor testimonial evidence protected by the Fifth Amendment privilege against self-incrimination. A handwriting exemplar is an identifying physical characteristic.
25.5.5.4.1.1 (04-30-1999)
Rights Concerning Partnership and Other Unincorporated Association Books and Records
1.The Supreme Court has ruled that an individual cannot rely upon the privilege against self-incrimination to avoid producing the records of a collective entity that are in his or her possession, even if these records might incriminate him or her personally. Partnership books and records are not the personal property of an individual; they are the collective property of a group of persons.
2.Partnership books and records voluntarily submitted by one partner may be used in evidence against the other partners without violating their constitutional rights.
3.A trustee can be directed to comply with a summons which calls for the production of certain books and records of the trust. Since the trust is a separate entity, the trustee can not claim the Fifth Amendment privilege. The books were held in a representative rather than a personal capacity.
25.5.5.4.1.2 (04-30-1999)
Rights Concerning Corporate Books and Records
1.The privilege against self-incrimination under the Fifth Amendment does not apply to corporations. The theory for this is that the State, having created the corporation, has reserved the power to inquire into its activities, and that an inanimate corporate body should not be afforded the same protection as a natural person in avoiding incrimination. A corporate officer may not refuse to produce corporate records held by him or her in an official capacity, even though their production may incriminate him or her or the corporation.
25.5.5.4.1.2.1 (04-30-1999)
Rights of Corporate Officers
1.The mere fact that a corporate officer may not refuse to produce corporate records does not take away the constitutional protection against self-incrimination which is the right of any individual. The corporate officer may still refuse to give testimony or exhibit personal records which may tend to incriminate him or her as an individual, or to testify regarding the whereabouts of corporate records not in his or her possession. Also, the corporate officer’s act of production may not be used against him or her in court.
25.5.5.4.2 (04-30-1999)
Right to Be Represented by Counsel
1.A witness who appears in response to a summons must be afforded the opportunity to be represented by an attorney.
25.5.5.4.3 (04-30-1999)
Privileged Communication and Summons
1.There are certain special types of relationships in which information communicated by one person to the other is held confidential and privileged between them. This privilege may exist between:
A.Attorney and Client
In general, the communications from a taxpayer to an attorney that are made to secure legal advice are privileged, and the attorney cannot be compelled to disclose that information to the Service. Also, if the taxpayer creates records to facilitate the exchange of privileged communications with the attorney, those records are privileged. However, if a taxpayer turns over pre-existing records to an attorney, the Service can obtain those records, unless they were otherwise privileged from production while in the taxpayer’s possession.
B.Federally Authorized Tax Practitioner and Taxpayer
RRA 98 created a new confidentiality privilege in IRC 7525 for communications between taxpayers and "any federally authorized tax practitioner " concerning "tax advice." "Federally authorized tax practitioners" are the persons described in Circular 230 as subject to regulation. "Tax advice" means any advice given "with respect to a matter which is within the scope of the individual’s authority to practice." The new privilege may be asserted both in "any noncriminal tax matter before the Internal Revenue Service" and in "any noncriminal tax proceeding in Federal court with respect to such matter." It may be asserted "to the extent the communication would be considered a privileged communication if it were between a taxpayer and an attorney," except for written communications made "in connection with the promotion of the direct or indirect participation of the person in any tax shelter. "
The new privilege does not arise automatically but must be asserted by the taxpayer. Service employees may still seek the same information in the same manner as before. The only difference is that taxpayers may now assert, in noncriminal proceedings, a confidentiality privilege for communications made after the date of enactment to federally authorized tax practitioners concerning tax advice sought or received. When questions of statutory interpretation arise, consult Associate Area Counsel.
C.Husband and Wife
D.Clergyman and Penitent
E.Psychotherapist-Patient
2.Privileged communications cannot be obtained by issuing a summons. If the Service anticipates that the summoned person may raise any privilege, the Service should ask for a privilege log to support the claim. The request may be made in the summons, but it can only be requested because a summons cannot require a person to create a new document. Associate Area Counsel may be contacted for assistance with a privilege log. See IRM 9.4.5.11, Rights of Witnesses and Prospective Defendants During Interview, in the Investigative Techniques Handbook for further information on privileged communication.
25.5.5.4.4 (10-28-2011)
Right to Make an Audio Recording of the Proceeding
1.Taxpayers or their representatives may ask to make audio-tape recordings of the proceedings. If the taxpayer requests to tape record the interview, the taxpayer must give 10 days advance notice and the recording must be at the taxpayer's expense and with the taxpayer's own equipment. The Service employee must also record the meeting. Cameras or videotape equipment are not permitted. At no time should employees try to physically confiscate this equipment. Follow the requirements of IRC 7521 and the procedures set forth in IRM 4.10.3.2.6, Requests to Tape Record Interviews, and IRM 5.1.12.4, Taxpayer Requests to Record an In-Person Interview, concerning audio-taped interviews.
25.5.5.4.5 (10-28-2011)
Right to Petition to Quash a Third-Party Summons
1.See in IRM 25.5.6.6.2, Right to File Petition to Quash Summons, of this Summons Handbook.
25.5.5.4.6 (04-30-1999)
Rights of Third-Party Witnesses to Refuse Unreasonable Requests and Raise Valid Defenses
1.Third-party witnesses are protected against summonses that are overbroad and fail to satisfy the relevancy test in IRC 7602(a). Refer to IRM 25.5.4.4.1, Relevancy and Materiality of Summoned Information.
2.Third-party witnesses may assert all valid rights and privileges, including the Fifth Amendment privilege against self-incrimination, the right to be represented by counsel, the spousal privilege, and the attorney-client privilege.
25.5.5.4.7 (10-28-2011)
Noncompliance by the Witness or a Representative
1.When a summoned witness or the witness’ representative indicates the witness will not comply with the summons:
A.do not make any indication or agreement, express or implied, that it is not necessary or required for the witness to appear, and
B.inform the witness or representative that refusal or failure to comply with the summons may result in judicial remedies provided by law, but if a valid reason exists, such as an illness, reschedule the date by mutual agreement to another fixed date.
2.The witness’ representative cannot appear instead of the witness on the appearance date set in the summons.
3.Continue with the interview when a summoned taxpayer or witness claims either the self-incrimination privilege of the Fifth Amendment, the attorney-client privilege or the confidential communications privilege under IRC 7525 even though it is clear that the questions will not be answered. Have the summoned taxpayer claim the privilege for each question.
4.If the summoned person refuses to submit to questioning and to the request for documents, that person cannot be compelled to remain and continue the interview.
5.Prepare a memorandum describing the facts and occurrences during the interview, include the questions asked and the responses given.
6.If a summoned taxpayer appears and wishes to suspend the interview to consult with an authorized representative, continue with the interview. Inform the taxpayer that an interview may usually be suspended for that purpose, but not when it is required by a summons. IRC 7521(b)(2) .
7.If a witness has been summoned to appear for more than one day (see the Notes at IRM Exhibit 25.5.2–1(10) - (11), General Instructions for Preparation of a Summons) and the witness indicates (for good reason) that he cannot appear on one or more of the continuing dates, do not release the witness from the obligation to appear on those days unless that person agrees in writing to appear on other mutually agreeable dates, identified by hour, month, day, and year in the written statement.
25.5.5.4.8 (04-30-1999)
Disclosure Issues
1.In addition to an attorney, a summoned party is permitted to have other persons present during the interview. Written authorization from the taxpayer is required for consenting to or requesting such disclosure.
Note:
However, when a witness appears pursuant to a summons and is accompanied by a person (other than the taxpayer) who does not represent the individual witness, such person may be excluded from the interview. An example of a situation in which a person may be excluded from the interview is where a corporate official (witness) is summoned in his/her individual capacity regarding an examination of the corporation, and an attorney representing the corporation, who does not also represent the witness, attempts to attend the interview. However, if the witness refuses to be interviewed if that person is excluded and the person is a designee of the taxpayer within the meaning of IRC 6103(c) and its regulations, the interview will proceed unless the interviewing officer decides that continuing the interview will impede development of the case. If this decision is made, the interview will be terminated and a request will be made to Associate Area Counsel for a recommendation for judicial enforcement of the summons by the Department of Justice and exclusion of the person from any future interviews pursuant to the court’s order.
2.Information obtained as a result of a summons issued in a tax administration investigation or examination is considered return information subject to the disclosure provisions of IRC 6103 and related regulations, and IRC 7213, 7213A, and 7431. Information obtained in a "pure" money laundering or Bank Secrecy Act investigation or examination does not fall within the above-listed disclosure provisions.
Note:
In a money laundering or Bank Secrecy Act investigation or examination, once a "related statute" call has been made, from that point forward all information obtained, including information resulting from a summons, becomes return information subject to the above-listed disclosure provisions.
3.Make no commitments to the taxpayer or third-party witness to:
A.provide a greater degree of confidentiality or limitation of use than is provided by existing law and regulation;
B.limit the disclosure of information, such as agreeing that information will not be turned over to other agencies otherwise entitled to disclosure of that information upon proper request, or
C.impose other conditions regarding the acceptance and use of information by the IRS, such as agreeing to use tax data for civil purposes only.
4.Take precautions to ensure that no violations of law concerning the disclosure of return information occurs.
