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October 29, 2015
IRS Has Always Required Warrants to Track Phones, Koskinen Says
by Luca Gattoni-Celli

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This article first appeared in the October 28, 2015 edition of Tax Notes Today.

IRS policy has always required that it obtain a warrant to use cellphone-tracking surveillance devices known as Stingrays and that they be used only in criminal cases, Commissioner John Koskinen said October 27.

"Our policy has always been that you have to demonstrate it is a criminal case. You have to get a warrant for it," Koskinen told reporters after a Senate Finance Committee hearing on the IRS's response to the exempt organizations screening controversy.

"You have to make sure" only to use the devices in criminal cases, Koskinen continued. "We have never used it in civil issues."

At the hearing, Finance Committee ranking minority member Ron Wyden, D-Ore., and member Chuck Grassley, R-Iowa, asked Koskinen about the IRS's use of the technology. Wyden sits on the Senate Select Intelligence Committee and Grassley chairs the Judiciary Committee. Both have advocated greater oversight and disclosure of government surveillance, including Stingrays.

Their questions followed a report by the British newspaper The Guardian that the IRS acquired the so-called cell-site simulator devices in 2009 and 2012.

In 2012 the IRS obtained a Hailstorm model, thought to be the technology's most current iteration. A broadcasted signal fools nearby cellphones into connecting to the device, which gathers metadata, including location data, and sometimes communications content, from all those phones, even when only one is specified as a target. Harris Corp. makes the Hailstorm and a model called the Stingray, which has become a generic term for cell-site simulators.

Koskinen told Wyden that only IRS employees in its Criminal Investigation division use cell-site simulators and solely based on probable cause of criminal activity. Koskinen said the IRS uses them "primarily in cases of money laundering, terrorism, and organized crime," adding that he would provide information about the frequency of their deployment within 30 days.

Koskinen stressed that IRS practices follow Justice Department rules governing the technology. Announced September 3, the DOJ rules include requiring a warrant to use a Stingray in most cases and requiring that data be cleared from the device after each mission and at least once a day.

Koskinen repeated this assurance to Grassley when asked if the IRS would issue its own policy, saying it would continue to abide by the DOJ standards, as well as any updates to them.

Grassley's office later told Tax Analysts that he plans to follow up with the IRS in writing regarding its use of cell-site simulators.

A major concern about cell-site simulator technology, particularly advanced devices such as the Hailstorm, is that it can be used to surveil communications themselves, including phone calls, and that government authorities would be able to do so with virtual impunity.

"What it does is primarily allow you to see point to point where communications are taking place," Koskinen said of the technique used by the IRS, also assuring Wyden that the technique does not allow it to overhear voice calls. However, he added, "You may pick up texting."

Finance Committee member Dean Heller, R-Nev., urged his colleagues not to take Koskinen's response as an answer. "I would anticipate that it would take one rogue member [of CI to] take an issue like this and expand it far beyond what the scope of it was initially intended," Heller said.

Fred Stokeld contributed to this article.

Follow Luca Gattoni-Celli (@TheGattoniCelli) on Twitter for real-time updates.

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