FORMS: 9.16 INFORMATION SUBJECT TO INQUIRY
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This form is useful during an IRS tax examination or audit. It establishes the legal basis for information that can be the subject of inquiry during a tax audit or examination.


Information Subject to Inquiry

"Revenue agents... are authorized to examine any books, papers, records, or memoranda bearing upon matters required to be included in Federal tax returns and to take testimony relative thereto and to administer oaths. See section 7602 of the Code and the regulations thereunder." [26 CFR 601.105(b)(1)]

"Sec. 7602. Examination of books and witnesses

(a) Authority to summon, etc.

For the purpose of... making a return where none has been made, determining the liability of any person for any internal revenue tax... 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... 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

(3) To take such testimony of the person concerned, under oath, as may be relevant or material to such inquiry." [26 USC 7602]

"Sec. 301.7602-1 Examination of books and witnesses.

(a) In general. For the purpose of... making a return where none has been made, determining the liability of any person for any internal revenue tax... any authorized officer or employee of the Internal Revenue Service may examine any books, papers, records or other data which may be relevant or material to such inquiry; and take such testimony of the person concerned, under oath, as may be relevant to such inquiry.
(b) Summons. For the purposes described in paragraph (a) of this section the Commissioner is authorized to summon the person liable for tax or required to perform the act... 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 take such testimony of the person concerned, under oath, as may be relevant or material to such inquiry." [26 CFR 301.7602-1]

"[Relating to procedures under 26 USC 7602, the Commissioner] must show that the investigation will be conducted pursuant to a legitimate purpose, [and] that the inquiry may be relevant to the purpose." [United States v. Powell (379 U.S. 48)]