IRS chief: We'll rewrite our e-mail search policy

Still unclear is whether taxpayers' other private communications, including on Facebook and Twitter, will receive the same treatment.

The head of the Internal Revenue Service said today the agency would abandon its controversial policy that claimed the right to read taxpayers' e-mail without first obtaining a search warrant.

Steven Miller, the IRS' acting commissioner, said at a U.S. Senate hearing that the no-warrant-required policy would be ditched within 30 days for e-mail, but he did not make the same commitment for other private electronic communications.

"We intend to do that" for e-mail, Miller said, in response to prodding from Sen. Ron Wyden, an Oregon Democrat who has become a frequent champion of civil liberties in the electronic realm.

Internal IRS memos prepared by the agency's lawyers and disclosed last week said Americans enjoy "generally no privacy" in their e-mail, Facebook chats, Twitter direct messages, and similar online communications. Until today's Senate hearing, the IRS had declined to answer questions about the memos.

"When will we actually get a public statement that the agency will not seek to obtain electronic communications without a warrant?" Wyden asked. "When would we get that actual public statement?"

Miller said that it was currently the agency's policy to obtain a "search warrant in advance" when conducting a criminal probe that required access to taxpayers' e-mail records. However, he told Sen. Chuck Grassley, an Iowa Republican, that he didn't know whether that was the case for private communications exchanged through Facebook and Twitter.

One IRS 2009 Search Warrant Handbook obtained by the American Civil Liberties Union argues that "e-mails and other transmissions generally lose their reasonable expectation of privacy and thus their Fourth Amendment protection once they have been sent from an individual's computer." The handbook was prepared by the Office of Chief Counsel for the Criminal Tax Division and obtained through the Freedom of Information Act.

The IRS continued to take the same position, the documents indicate, even after a federal appeals court ruled in the 2010 case U.S. v. Warshak that Americans have a reasonable expectation of privacy in their e-mail. A few e-mail providers, including Google, Microsoft, Yahoo, and Facebook, but not all, have taken the position that Warshak mandates warrants for e-mail.

In response to prodding from Sen. Ron Wyden (left), acting IRS commissioner Steven Miller (right) said the agency would change its written policies.

(Credit: U.S. Senate)

Before the Warshak decision, the general rule since 1986 had been that police could obtain Americans' e-mail messages that were more than 180 days old with an administrative subpoena or what's known as a 2703(d) order, both of which lack a warrant's probable cause requirement.

The rule was adopted as part of the 1986 Electronic Communications Privacy Act in the era of telephone modems, BBSs, and UUCP links, long before gigabytes of e-mail stored in the cloud was ever envisioned. Since then, the 6th Circuit Court of Appeals ruled in Warshak, technology had changed dramatically: "People are now able to send sensitive and intimate information, instantaneously, to friends, family, and colleagues half a world away.... By obtaining access to someone's e-mail, government agents gain the ability to peer deeply into his activities."

A March 2011 update to the IRS manual, published four months after the Warshak decision, says that nothing has changed and that "investigators can obtain everything in an account except for unopened e-mail or voice mail stored with a provider for 180 days or less" without a warrant. An October 2011 memorandum (PDF) from IRS senior counsel William Spatz took a similar position.

The IRS' criminal investigation division boasts nearly 4,000 employees, about 2,600 of whom are special agents who investigate suspected tax criminals. Willfully attempting to conceal income from the IRS is a crime.

IRS statistics for the fiscal year that ended last month show that it secured nearly 2,000 indictments against Americans during that period, with an average prison term of 46 months.

Nina Olson, the National Taxpayer Advocate, a congressionally created position, said during today's hearing that her office was not consulted when the IRS drafted its now-abandoned e-mail access policy.

"Regrettably that memo was not shared with me prior to it being made public -- nor was it circulated for my comments," Olson said. "It might have looked different if the voice of the taxpayer had an opportunity to comment on it."