§ 7602. Examination of books and witnesses
(a)
Authority to summon, etc.
For the purpose of ascertaining the correctness of any return, making a return where none has been made, determining the liability of any person for any internal revenue tax or the liability at law or in equity of any transferee or fiduciary of any person in respect of any internal revenue tax, or collecting any such liability, the Secretary is authorized—
(1)
To examine any books, papers, records, or other data which may be relevant or material to such inquiry;
(2)
To summon the person liable for tax or required to perform the act, or any officer or employee of such person, or any person having possession, custody, or care of books of account containing entries relating to the business of the person liable for tax or required to perform the act, or any other person the Secretary may deem proper, to appear before the Secretary at a time and place named in the summons and to produce such books, papers, records, or other data, and to give such testimony, under oath, as may be relevant or material to such inquiry; and
(b)
Purpose may include inquiry into offense
The purposes for which the Secretary may take any action described in paragraph (1), (2), or (3) of subsection (a) include the purpose of inquiring into any offense connected with the administration or enforcement of the internal revenue laws.
(c)
Notice of contact of third parties
(1)
General notice
An officer or employee of the Internal Revenue Service may not contact any person other than the taxpayer with respect to the determination or collection of the tax liability of such taxpayer without providing reasonable notice in advance to the taxpayer that contacts with persons other than the taxpayer may be made.
(2)
Notice of specific contacts
The Secretary shall periodically provide to a taxpayer a record of persons contacted during such period by the Secretary with respect to the determination or collection of the tax liability of such taxpayer. Such record shall also be provided upon request of the taxpayer.
(d)
No administrative summons when there is Justice Department referral
(1)
Limitation of authority
No summons may be issued under this title, and the Secretary may not begin any action under section
7604 to enforce any summons, with respect to any person if a Justice Department referral is in effect with respect to such person.
(2)
Justice Department referral in effect
For purposes of this subsection—
(A)
In general
A Justice Department referral is in effect with respect to any person if—
(B)
Termination
A Justice Department referral shall cease to be in effect with respect to a person when—
(i)
the Attorney General notifies the Secretary, in writing, that—
(I)
he will not prosecute such person for any offense connected with the administration or enforcement of the internal revenue laws,
(e)
Limitation on examination on unreported income
The Secretary shall not use financial status or economic reality examination techniques to determine the existence of unreported income of any taxpayer unless the Secretary has a reasonable indication that there is a likelihood of such unreported income.