Internal Revenue Service's Controls Over the Use of Confidential Informants:

Recent Improvements Not Adequate

GGD-77-46: Published: Sep 1, 1977. Publicly Released: Sep 1, 1977.

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Primarily because of inadequate management attention, the Internal Revenue Service (IRS) had not done all it could to get the most benefits with the least risk in dealing with confidential informants.

Informants were sometimes used in ill-defined and overly broad intelligence gathering efforts, procedures for evaluating their information were inadequate, and their use was not systematically reviewed by management. Since 1975, IRS strengthened its controls, but it could do more. Management needs to pay more attention to the fact that an informant is used only after the potential benefits and risks have been properly assessed.

Recommendation for Executive Action

  1. Status: Closed

    Comments: Please call 202/512-6100 for additional information.

    Recommendation: The Commissioner of Internal Revenue should require that higher-level management officials, preferably regional commissioners, authorize the use of any informant who will be gathering information at IRS request or encouragement after a determination that there is reasonable cause to believe a tax law has been violated, no practical alternative for obtaining essential information, and a specific limitation on the time and scope of the informant's activities. The Commissioner should also require that requests to use each such informant show, among other things, why the informant is needed, how he was developed and determined reliable, and how he will be used. In order to spur proper implementation of the guidelines and adequate management attention to informant activities, the Commissioner should review those activities at least annually.

    Agency Affected:

 

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