The opinion of the court was delivered by: NICKERSON
NICKERSON, District Judge
The United States has submitted an ex parte application for the production by the Internal Revenue Service ("IRS") of income tax returns and taxpayer return information filed by certain persons being investigated or prosecuted for alleged violations of the narcotics laws. The application seeks an order, pursuant to 26 U.S.C. § 6103(i)(1),
directing the IRS to provide that information to Assistant United States Attorneys and agents of the Drug Enforcement Administration conducting the investigation.
The statute authorizes district court judges to order that income tax returns or taxpayer return information
be open to federal officials involved in a proceeding or investigation "pertaining to the enforcement of a specifically designated Federal criminal statute (not involving tax administration) to which the United States or such agency is or may be a party." § 6103(i)(1)(A). The court may grant such an ex parte order upon determining
"on the basis of the facts submitted by the applicant that -
(i) there is reasonable cause to believe, based upon information believed to be reliable, that a specified criminal act has been committed;
(ii) there is reason to believe that such return or return information is probative evidence of a matter in issue related to such criminal act; and
(iii) the information sought cannot reasonably be obtained from any other source . . ."
The return or return information shall be open "but only to the extent necessary as provided in such order."
Upon reading the application of the Assistant United States Attorney, the court is satisfied as to the first and third of the enumerated factors. Without reviewing the material sought, however, it is difficult to determine whether that material " is probative evidence" (emphasis supplied) or the extent to which it is "necessary". § 6103(i)(1)(A).
The court is aware of no reported decision which sheds light on the issue of the appropriate procedure to be used in making those determinations. A literal reading of § 6103(i)(1) (B) would appear to limit the court's inquiry to "facts submitted by the applicant." The statute does not, by its terms provide for in camera inspection of the requested material to determine its probative value. The court finds, however, that such in camera inspection is necessary to effectuate the purposes of the statute.
Section 6103 was amended in 1976 as part of the Tax Reform Act of 1976, Pub.L. 94-455, Title XII, 90 Stat. 1667. The new law completely restructured the procedures applicable to official requests for information filed with the IRS. Under prior law, federal prosecutors could obtain such information by routine request to the IRS without any application to the courts. See, e.g., United States v. Costello, 255 F.2d 876 (2d Cir. 1958), cert. denied 357 U.S. 937, 2 L. Ed. 2d 1551, 78 S. Ct. 1385 (1958); United States v. Tucker, 316 F. Supp. 822 (D. Conn. 1970).
In proposing the amendment of § 6103, the Senate Committee on Finance
"decided that the information that the American citizen is compelled by our tax laws to disclose to the Internal Revenue Service was entitled to essentially the same degree of privacy as those private papers maintained in the home. Present law and practice does not afford him that protection . . . the Justice Department and other federal agencies, as a practical ...