Can’t Wait?

Upon completion of the grand jury investigation, cases originating in an examination function will be released from Grand Jury Suspense and returned for civil settlement. Examiners who had access to grand jury information are "tainted" for civil settlement and cannot be assigned to the case. Rule 6(e) precludes the use of " matters occurring before the grand jury" in any subsequent civil action. Per Rule 6(e)(3)(B), Any person to whom matters are disclosed under subparagraph (A)(ii) of this paragraph shall not utilize that grand jury material for any purpose other than assisting the attorney for the government in the performance of such attorney's duty to enforce federal criminal law.

The examiner may use information in public record, including the search warrant affidavit, indictment, plea agreement and other information in the court file. As discussed above, the grand jury revenue agent will gather this information during the grand jury investigation and at the conclusion of the grand jury investigation, forward the information to the territory manager designee.

Since the taxpayer may not be convicted for all years in the indictment, information available may not be complete. A Rule 6(e) order may be obtained through the U.S. Attorney’s Office to disclose grand jury information when the information is needed "preliminarily to or in connection with a judicial proceeding." There must be a "particularized need" in that the information cannot be obtained from some other source. An IRS civil examination does not meet this requirement. There must be specific litigation, such as a Tax Court or District Court proceeding.

The touchstone of Rule 6(e)’s applicability is whether the disclosed material would "elucidate the inner workings of the grand jury." The "inner workings" test would preclude disclosure of evidence which tended to reveal the identity and/or testimony of witnesses, the direction of the investigation and the deliberation of the grand jurors.

The examiner should ask Cl if they have possession of specific documents known to be non-grand jury evidence. A memorandum from the field territory manager to the SAC should be prepared providing a brief explanation of the situation and the specific documents requested.

Grand jury evidence cannot be released even when the taxpayer volunteers to execute a waiver authorizing disclosure. The taxpayer could furnish records in their possession even though the grand jury subpoenaed those very records.

If a court determines the IRS has improperly used grand jury material, the court may refuse to admit the evidence, reverse the burden of proof and/or require the IRS to proceed with evidence not derived from the grand jury. Further, the court may decide to dismiss the case, without prejudice, due to government misconduct. If the court determined the IRS intentionally used grand jury material, attorney and legal fees could be awarded to the taxpayer.