
From the U.S. Code Online via GPO Access
[wais.access.gpo.gov]
[Laws in effect as of January 2, 2001]
[Document affected by Public Law 106-554 Section 1(a)(7)[303]]
[CITE: 26USC7608]

 
                     TITLE 26--INTERNAL REVENUE CODE
 
                Subtitle F--Procedure and Administration
 
       CHAPTER 78--DISCOVERY OF LIABILITY AND ENFORCEMENT OF TITLE
 
                Subchapter A--Examination and Inspection
 
Sec. 7608. Authority of internal revenue enforcement officers


(a) Enforcement of subtitle E and other laws pertaining to liquor, 
        tobacco, and firearms

    Any investigator, agent, or other internal revenue officer by 
whatever term designated, whom the Secretary charges with the duty of 
enforcing any of the criminal, seizure, or forfeiture provisions of 
subtitle E or of any other law of the United States pertaining to the 
commodities subject to tax under such subtitle for the enforcement of 
which the Secretary is responsible may--
        (1) carry firearms;
        (2) execute and serve search warrants and arrest warrants, and 
    serve subpoenas and summonses issued under authority of the United 
    States;
        (3) in respect to the performance of such duty, make arrests 
    without warrant for any offense against the United States committed 
    in his presence, or for any felony cognizable under the laws of the 
    United States if he has reasonable grounds to believe that the 
    person to be arrested has committed, or is committing, such felony; 
    and
        (4) in respect to the performance of such duty, make seizures of 
    property subject to forfeiture to the United States.

(b) Enforcement of laws relating to internal revenue other than subtitle 
        E

    (1) Any criminal investigator of the Intelligence Division of the 
Internal Revenue Service whom the Secretary charges with the duty of 
enforcing any of the criminal provisions of the internal revenue laws, 
any other criminal provisions of law relating to internal revenue for 
the enforcement of which the Secretary is responsible, or any other law 
for which the Secretary has delegated investigatory authority to the 
Internal Revenue Service, is, in the performance of his duties, 
authorized to perform the functions described in paragraph (2).
    (2) The functions authorized under this subsection to be performed 
by an officer referred to in paragraph (1) are--
        (A) to execute and serve search warrants and arrest warrants, 
    and serve subpoenas and summonses issued under authority of the 
    United States;
        (B) to make arrests without warrant for any offense against the 
    United States relating to the internal revenue laws committed in his 
    presence, or for any felony cognizable under such laws if he has 
    reasonable grounds to believe that the person to be arrested has 
    committed or is committing any such felony; and
        (C) to make seizures of property subject to forfeiture under the 
    internal revenue laws.

(c) Rules relating to undercover operations

       (1) Certification required for exemption of undercover 
                        operations from certain laws

        With respect to any undercover investigative operation of the 
    Internal Revenue Service (hereinafter in this subsection referred to 
    as the ``Service'') which is necessary for the detection and 
    prosecution of offenses under the internal revenue laws, any other 
    criminal provisions of law relating to internal revenue, or any 
    other law for which the Secretary has delegated investigatory 
    authority to the Internal Revenue Service--
            (A) sums authorized to be appropriated for the Service may 
        be used--
                (i) to purchase property, buildings, and other 
            facilities, and to lease space, within the United States, 
            the District of Columbia, and the territories and 
            possessions of the United States without regard to--
                    (I) sections 1341 and 3324 of title 31, United 
                States Code,
                    (II) sections 11(a) and 22 of title 41, United 
                States Code,
                    (III) section 255 of title 41, United States Code,
                    (IV) section 34 of title 40, United States Code, and
                    (V) section 254(a) and (c) \1\ of title 41, United 
                States Code, and
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    \1\ See References in Text note below.

                (ii) to establish or to acquire proprietary corporations 
            or business entities as part of the undercover operation, 
            and to operate such corporations or business entities on a 
            commercial basis, without regard to sections 9102 and 9103 
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            of title 31, United States Code;

            (B) sums authorized to be appropriated for the Service and 
        the proceeds from the undercover operations may be deposited in 
        banks or other financial institutions without regard to the 
        provisions of section 648 of title 18, United States Code, and 
        section 3302 of title 31, United States Code, and
            (C) the proceeds from the undercover operation may be used 
        to offset necessary and reasonable expenses incurred in such 
        operation without regard to the provisions of section 3302 of 
        title 31, United States Code.

    This paragraph shall apply only upon the written certification of 
    the Commissioner of Internal Revenue (or, if designated by the 
    Commissioner, the Deputy Commissioner or an Assistant Commissioner 
    of Internal Revenue) that any action authorized by subparagraph (A), 
    (B), or (C) is necessary for the conduct of such undercover 
    operation.

        (2) Liquidation of corporations and business entities

        If a corporation or business entity established or acquired as 
    part of an undercover operation under subparagraph (B) of paragraph 
    (1) with a net value over $50,000 is to be liquidated, sold, or 
    otherwise disposed of, the Service, as much in advance as the 
    Commissioner or his delegate determines is practicable, shall report 
    the circumstances to the Secretary. The proceeds of the liquidation, 
    sale, or other disposition, after obligations are met, shall be 
    deposited in the Treasury of the United States as miscellaneous 
    receipts.

                       (3) Deposit of proceeds

        As soon as the proceeds from an undercover investigative 
    operation with respect to which an action is authorized and carried 
    out under subparagraphs (B) and (C) of paragraph (1) are no longer 
    necessary for the conduct of such operation, such proceeds or the 
    balance of such proceeds remaining at the time shall be deposited 
    into the Treasury of the United States as miscellaneous receipts.

                             (4) Audits

        (A) The Service shall conduct a detailed financial audit of each 
    undercover investigative operation which is closed in each fiscal 
    year; and
            (i) submit the results of the audit in writing to the 
        Secretary; and
            (ii) not later than 180 days after such undercover operation 
        is closed, submit a report to the Congress concerning such 
        audit.

        (B) The Service shall also submit a report annually to the 
    Congress specifying as to its undercover investigative operations--
            (i) the number, by programs, of undercover investigative 
        operations pending as of the end of the 1-year period for which 
        such report is submitted;
            (ii) the number, by programs, of undercover investigative 
        operations commenced in the 1-year period for which such report 
        is submitted;
            (iii) the number, by programs, of undercover investigative 
        operations closed in the 1-year period for which such report is 
        submitted, and
            (iv) the following information with respect to each 
        undercover investigative operation pending as of the end of the 
        1-year period for which such report is submitted or closed 
        during such 1-year period--
                (I) the date the operation began and the date of the 
            certification referred to in the last sentence of paragraph 
            (1),
                (II) the total expenditures under the operation and the 
            amount and use of the proceeds from the operation,
                (III) a detailed description of the operation including 
            the potential violation being investigated and whether the 
            operation is being conducted under grand jury auspices, and
                (IV) the results of the operation including the results 
            of criminal proceedings.

                           (5) Definitions

        For purposes of paragraph (4)--

        (A) Closed

            The term ``closed'' means the date on which the later of the 
        following occurs;
                (i) all criminal proceedings (other than appeals) are 
            concluded, or
                (ii) covert activities are concluded, whichever occurs 
            later.

        (B) Employees

            The term ``employees'' has the meaning given such term by 
        section 2105 of title 5, United States Code.

        (C) Undercover investigative operation

            The term ``undercover investigative operation'' means any 
        undercover investigative operation of the Service; except that, 
        for purposes of subparagraphs (A) and (C) of paragraph (4), such 
        term only includes an operation which is exempt from section 
        3302 or 9102 of title 31, United States Code.

                     (6) Application of section

        The provisions of this subsection--
            (A) shall apply after November 17, 1988, and before January 
        1, 1990, and
            (B) shall apply after the date of the enactment of this 
        paragraph and before January 1, 2006.

    All amounts expended pursuant to this subsection during the period 
    described in subparagraph (B) shall be recovered to the extent 
    possible, and deposited in the Treasury of the United States as 
    miscellaneous receipts, before January 1, 2006.

(Added Pub. L. 85-859, title II, Sec. 204(14), Sept. 2, 1958, 72 Stat. 
1429; amended Pub. L. 87-863, Sec. 6(a), Oct. 23, 1962, 76 Stat. 1143; 
Pub. L. 94-455, title XIX, Sec. 1906(b)(13)(A), Oct. 4, 1976, 90 Stat. 
1834; Pub. L. 100-690, title VII, Sec. 7601(c)(1), (2), Nov. 18, 1988, 
102 Stat. 4504; Pub. L. 101-508, title XI, Sec. 11704(a)(32), (33), Nov. 
5, 1990, 104 Stat. 1388-519; Pub. L. 104-168, title XII, Sec. 1205(b)-
(c)(2), July 30, 1996, 110 Stat. 1471, 1472; Pub. L. 104-316, title I, 
Sec. 113, Oct. 19, 1996, 110 Stat. 3833; Pub. L. 105-206, title I, 
Sec. 1103(e)(4), July 22, 1998, 112 Stat. 710; Pub. L. 106-554, 
Sec. 1(a)(7) [title III, Sec. 303], Dec. 21, 2000, 114 Stat. 2763, 
2763A-632.)

                       References in Text

    Section 254(c) of title 41, referred to in subsec. (c)(1)(A)(i)(V), 
was repealed by Pub. L. 103-355, title II, Sec. 2251(b), Oct. 13, 1994, 
108 Stat. 3320. See section 254d of Title 41, Public Contracts.
    The date of the enactment of this paragraph, referred to in subsec. 
(c)(6)(B), is the date of enactment of Pub. L. 104-168, which was 
approved July 30, 1996.


                            Prior Provisions

    A prior section 7608 was renumbered section 7613 of this title.


                               Amendments

    2000--Subsec. (c)(6). Pub. L. 106-554 substituted ``January 1, 
2006'' for ``January 1, 2001'' in subpar. (B) and concluding provisions.
    1998--Subsec. (b)(1). Pub. L. 105-206 struck out ``or of the 
Internal Security Division'' after ``Intelligence Division''.
    1996--Subsec. (c)(2). Pub. L. 104-316 struck out ``and the 
Comptroller General of the United States'' after ``Secretary''.
    Subsec. (c)(4)(B)(ii). Pub. L. 104-168, Sec. 1205(c)(1)(A), (B), 
struck out ``preceding the period'' after ``in the 1-year period'' and 
``and'' at end.
    Subsec. (c)(4)(B)(iii), (iv). Pub. L. 104-168, Sec. 1205(c)(1)(C), 
added cls. (iii) and (iv) and struck out former cl. (iii) which read as 
follows: ``the number, by programs, of undercover investigative 
operations closed in the 1-year period preceding the period for which 
such report is submitted and, with respect to each such closed 
undercover operation, the results obtained and any civil claims made 
with respect thereto.''
    Subsec. (c)(5)(C). Pub. L. 104-168, Sec. 1205(c)(2), reenacted 
heading without change and amended text generally. Prior to amendment, 
text read as follows: ``The terms `undercover investigative operation' 
and `undercover operation' mean any undercover investigative operation 
of the Service--
        ``(i) in which--
            ``(I) the gross receipts (excluding interest earned) exceed 
        $50,000; or
            ``(II) expenditures, both recoverable and nonrecoverable 
        (other than expenditures for salaries of employees), exceed 
        $150,000; and
        ``(ii) which is exempt from section 3302 or 9102 of title 31, 
    United States Code.
Clauses (i) and (ii) shall not apply with respect to the report required 
under subparagraph (B) of paragraph (4).''
    Subsec. (c)(6). Pub. L. 104-168, Sec. 1205(b), added par. (6).
    1990--Subsec. (c)(1)(B). Pub. L. 101-508, Sec. 11704(a)(32), struck 
out comma after ``operations''.
    Subsec. (c)(5)(C). Pub. L. 101-508, Sec. 11704(a)(33), substituted 
``interest'' for ``interested'' in cl. (i)(I) and ``title 31'' for 
``title 3'' in cl. (ii).
    1988--Subsec. (b)(1). Pub. L. 100-690, Sec. 7601(c)(1), substituted 
comma for ``or'' before ``any other'' and inserted ``, or any other law 
for which the Secretary has delegated investigatory authority to the 
Internal Revenue Service,'' after ``responsible''.
    Subsec. (c). Pub. L. 100-690, Sec. 7601(c)(2), added subsec. (c).
    1976--Pub. L. 94-455 struck out ``or his delegate'' after 
``Secretary'' wherever appearing.
    1962--Pub. L. 87-863 redesignated existing provisions as subsec. 
(a), added subsec. (a) heading, and added subsec. (b).


                    Effective Date of 1996 Amendment

    Section 1205(c)(3) of Pub. L. 104-168 provided that: ``The 
amendments made by this subsection [amending this section] shall take 
effect on the date of the enactment of this Act [July 30, 1996].''


                    Effective Date of 1988 Amendment

    Section 7601(c)(3) of Pub. L. 100-690, as amended by Pub. L. 101-
647, title XXXIII, Sec. 3301(a), Nov. 29, 1990, 104 Stat. 4917; Pub. L. 
104-168, title XII, Sec. 1205(a), July 30, 1996, 110 Stat. 1471, 
provided that: ``The amendments made by this subsection [amending this 
section] shall take effect on the date of the enactment of this Act 
[Nov. 18, 1988].''


                    Effective Date of 1962 Amendment

    Section 6(b) of Pub. L. 87-863 provided that: ``The amendments made 
by subsection (a) [amending this section] shall take effect on the day 
after the date of enactment of this Act [Oct. 23, 1962].''


                             Effective Date

    Section effective Sept. 3, 1958, see section 210(a)(1) of Pub. L. 
85-859, set out as a note under section 5001 of this title.

                  Section Referred to in Other Sections

    This section is referred to in sections 5558, 5604 of this title.
