Obtaining Information from the Government—Disclosure Statutes, written by John A. Galotto, Esq., of McKee Nelson LLP, Christopher P. La Puma, Esq., of Mattel Corporation, and Neeraj Pai, Esq., of McKee Nelson LLP, discusses the primary disclosure statutes providing access to IRS information, the Freedom of Information Act, §§6104 and 6110 of the Internal Revenue Code (the “Code”), and the Privacy Act of 1974, as well as statutory prohibitions on disclosure and §§6103 and 6105.  

This Portfolio covers a number of specific and crucial topics, including  

• access to IRS information pursuant to disclosure statutes and the disclosure of information under the Freedom of Information Act 
• disclosure in judicial and administrative tax proceedings, §6103(h)(4); the proceeding pertaining to Tax Administration Under §6103(h)(4); and the persons to whom the disclosure may be made under §6103(h)(4)  
• the deletion of taxpayer identifying details from §6110 documents and actions to restrain disclosure 
• waivers, including waivers of the deliberative process privilege, waiver by adoption, waiver by disclosure, and at-issue waivers 
• exemptions from disclosure under §6110,  National Secrets (§6110(c)(2)), and information exempted from disclosure under any other Statute (§6110(c)(3)) 
• the FOIA Context vs. Litigation Context, the burden of proof, the law of privilege that applies, and the elements of the attorney-client privilege 

In addition, this Portfolio discusses the availability and scope of discovery in the context of civil tax litigation in the federal district courts, the U.S. Tax Court, and the U.S. Court of Federal Claims, as well as actions taxpayers may bring to remedy disclosure violations by the government. 

Obtaining Information from the Government—Disclosure Statutes allows you to benefit from:

• Hundreds of hours of original research on specific tax planning topics from leading practitioners in this area
• Invaluable practice documents including tables, charts and lists
• Plain-English guidance from world-class experts
• Real-world and in-depth analysis that lets you explore various options
• Time-saving access to relevant sections of tax laws, regulations, court cases, IRS documents and more
• Alternative approaches to both common and unique tax scenarios 

This Portfolio is part of the U.S. Income Portfolios Library, a comprehensive series that includes more than 200 Portfolios, which covers every federal tax topic with expert, in-depth analysis, and offer commentary on a wide range of federal taxation topics, including Compensation Planning, Deductions and Credits, Partnerships and Corporations, Special Pass-Through Entities, Corporate Reorganizations, Real Estate, Procedure and Administration, and more.

Detailed Analysis

I. Introduction

II. Access to IRS Information Pursuant to Disclosure Statutes

A. In General

B. Disclosure of Information Under the Freedom of Information Act

1. Overview

2. Publicly Available Information

3. Agency Records of IRS Subject to Disclosure upon Request Under FOIA

a. Definition of Agency Records

b. The Two-Prong Test

c. Materials That Do Not Qualify as “Agency Records”

4. Procedures Governing Requests for IRS Agency Records Under FOIA

a. Introduction

b. Requests for Disclosure

c. Agency Response

(1) Search by IRS

(2) Deadlines for Responding to FOIA Requests

(3) Production by IRS

(4) Denial of Request

d. Administrative Appeal

e. Judicial Review

(1) Exhaustion of Administrative Remedies

(2) Court Action

f. Timetable for Regular (Not Expedited) Processing

(1) FOIA Deadlines & Automatic Extensions

(2) Informal Requests for Extension

(3) Open America Doctrine

(4) Realistic Expectations Regarding IRS Response Time

g. Requests for Expedited Processing

(1) Procedure for Requesting Expedited Processing

(a) Initial Request for Expedited Processing

(b) Agency Response to Expedited Processing Request

(c) Administrative Appeal of Denial of Expedited Processing Request

(d) Judicial Review of Request for Expedited Processing

(2) Grounds for Receiving Expedited Processing

(a) “Compelling Need”

(b) Threat to Life or Physical Safety

(c) Media Requests

(d) Loss of Substantial Due Process Rights

(e) General Public Interest

h. Fees

i. Attorney's Fees

j. Injunctive or Declaratory Relief

k. Improper Failure to Disclose

l. Reverse FOIA

5. FOIA Exemptions

a. Exemption 1 - National Security Information

b. Exemption 2 - Personnel Rules and Practices

c. Exemption 3 - Information Specifically Exempted by Statute

d. Exemption 4 - Trade Secrets and Confidential Information

e. Exemption 5 - Inter-Agency or Intra-Agency Memoranda

f. Exemption (b)(6) - Personal and Medical Files

g. Exemption 7 - Law Enforcement Records

(1) Exemption 7(A)

(2) Exemption 7(B)

(3) Exemption 7(C)

(4) Exemption 7(D)

(5) Exemption 7(E)

(6) Exemption 7(F)

h. Exemptions 8 and 9 - Bank Records and Records Concerning Wells

i. Exclusions from Disclosure

j. Waiver of FOIA Exemptions

C. Disclosure Under 6103

1. Overview

2. Relationship Between FOIA and 6103

3. General Rule - 6103(a)

4. Returns and Return Information - 6103(b)

a. “Return” Defined

b. “Return Information” Defined

5. Disclosure to Designee of Taxpayer - 6103(c)

6. Disclosure to State Officials - 6103(d)

7. Disclosure to Persons Having Material Interest - 6103(e)

8. Disclosure to Committees of Congress, the President and Certain Appointees - 6103(f) & (g)

9. Disclosure to Federal Officials for Purposes of Tax Administration - 6103(h)(1), (2) & (3)

a. Disclosure to and by Treasury Personnel - 6103(h)(1)

b. Disclosure to DOJ Personnel - 6103(h)(2) & (3)

c. Disclosure by DOJ Personnel

10. Disclosure in Judicial and Administrative Tax Proceedings - 6103(h)(4)

a. Proceeding Pertaining to Tax Administration Under 6103(h)(4)

b. Persons to Whom Disclosure May Be Made Under 6103(h)(4)

c. Taxpayer as Party - 6103(h)(4)(A)

d. Item Directly Related - 6103(h)(4)(B)

e. Transactional Relationship - 6103(h)(4)(C)

f. Criminal Discovery - 6103(h)(4)(D)

g. Impairment of Civil or Criminal Tax Investigation

11. Disclosure to Federal Officials in Non-tax Criminal Investigations and for Anti-Terrorism Purposes - 6103(i)

12. Disclosure of IRS Statistical Studies - 6103(j)

13. Disclosure for Tax Administration Purposes - 6103(k)

a. Categories of Disclosures Under 6103(k)

b. Disclosure Under 6103(k)(6)

(1) Activities Covered

(2) “To the Extent Necessary”

(3) “Not Otherwise Reasonably Available”

(4) Disclosures in Criminal Investigations

14. Disclosure to Government Agencies for Non-Tax Purposes - 6103(l)

15. Disclosure of Taxpayer Identity Information - 6103(m)

16. Disclosure to Government Service Providers - 6103(n)

17. Alcohol, Tobacco, Firearms and Gambling Taxes - 6103(o)

18. Redisclosure of Returns and Return Information - 6103(p)

19. Disclosure for Jury Selection Purposes

D. Disclosure of Information Under 6110

1. Introduction

2. Enactment of 6110

a. FOIA Litigation Involving Written Determinations

b. Enactment of 6110

c. Exclusivity of 6110

d. Post-Enactment Litigation and Expansion of 6110 to Include Chief Counsel Advice

3. Lack of Precedential Value

4. Documents and Information Obtainable Under the 6110 Disclosure Regime

a. Written Determinations

b. Background File Documents

c. IRS Obligation to Retain Background File Documents to Reference Written Determinations

d. Prior Written Determinations

e. Third Party Contact Information

5. Documents and Information Not Subject to 6110

6. Exemptions from Disclosure Under 6110

a. National Secrets ( 6110(c)(2))

b. Information Exempted from Disclosure Under Any Other Statute ( 6110(c)(3))

c. Trade Secrets ( 6110(c)(4))

d. Material Damaging to the Standing of Financial Institutions ( 6110(c)(6))

e. Geological Information ( 6110(c)(7))

f. FOIA Exemptions Without Parallel Under 6110

g. Modified FOIA Exemption Regime for Deletions of Chief Counsel Advice

7. Deletion of Taxpayer Identifying Details from 6110 Documents and Actions to Restrain Disclosure

a. Deletion of Identifying Details

b. Actions to Restrain Disclosure

c. Proposed Deletions to Taxpayer-Requested Determinations

8. Requests for Additional Disclosure

9. Requests for Third-Party Contact Information

10. Time for Disclosure Under 6110

a. In General

b. Postponement Due to Action to Restrain Disclosure

c. Postponement Due to Incomplete Status of Transaction

d. Postponement in Enforcement Cases

11. Procedures for Obtaining Access Under 6110

a. Items Routinely Made Available for Public Inspection

b. Items Available Only Upon Written Request

c. Procedures for Requesting Background File Documents

d. Fees

12. Judicial Remedies for IRS Failure to Make Deletions or Comply with Required Time Limits

E. Disclosure of Information Under the Privacy Act of 1974

1. Introduction

2. Limitations of the Privacy Act

3. Agency Publication and Reporting Requirements

4. Exemptions from Disclosure Under the Privacy Act

5. Making a Privacy Act Request

6. Judicial Remedies for Violation of Privacy Act

F. Public Access to Exempt Organization Materials Under 6104

1. Section 6104(a)(1)(A) - Public Inspection of Material Relating to Tax Exempt Organizations

2. Section 6104(a)(1)(B) - Public Inspection of Material Relating to Pension and Other Plans

3. Section 6104(b) - Public Inspection of Information Returns

4. Information Subject to Deletion

5. Documents and Information Not Subject to 6104

6. Inspection Procedures

7. Section 6104(d) - Disclosure Obligations Imposed on Exempt Organizations

G. Disclosure of Tax Convention Information Under 6105

III. Defenses and Objections Raised by the Government to Statutory and Civil Discovery Requests

Introductory Material

A. FOIA Context vs. Litigation Context

B. Burden of Proof

C. What Law of Privilege Applies

D. Attorney-Client Privilege

1. Elements of the Attorney-Client Privilege

2. Burden of Proof

3. Government's Assertion of the Privilege

4. Waiver of the Attorney-Client Privilege

E. Work Product Doctrine

1. Elements of the Work Product Doctrine

2. Government's Assertion of the Work Product Doctrine

3. Work Product Balancing Test

4. Waiver of Work Product Protection

F. Deliberative Process Privilege

1. In General

2. Burden of Proof Regarding Deliberative Process Claim

3. Authority to Assert Deliberative Process Privilege

4. Elements of The Deliberative Privilege - Predecisional and Deliberative

a. “Predecisional”

b. “Deliberative”

5. Balancing Test

6. Analysis of Deliberative Process Privilege by the U.S. Tax Court

7. Government Misconduct Exception to Deliberative Process Privilege

8. Waiver of the Deliberative Process Privilege

a. Waiver by Adoption

b. Waiver by Disclosure

c. At Issue Waiver

G. Section 6103

H. Relevance

1. Greenberg's Express Doctrine

2. Constitutional Rights Violations

3. Abuse of Discretion Cases

a. Section 482 Cases

b. IBM Unequal Treatment Cases

4. Penalties

5. Challenges to Validity of Regulations

6. Damages Actions

I. Other Governmental Privileges and Objections

1. Impeachment Privilege

2. Informant's Privilege

3. Objections Based Upon Related Criminal Proceedings

a. Requests for Stay of Civil Discovery

b. Objections Based upon Grand Jury Secrecy

4. Overbreadth and Burdensomeness

IV. Specific IRS Documentary Information Obtainable Under 6110 or FOIA

Introductory Material

A. IRS Documents Subject to the 6110 Disclosure Regime

B. Other IRS Documents Not Subject to 6110

C. Miscellaneous IRS Communications and Rulings (Including Obsolete Rulings)

V. Interplay Between FOIA and Discovery

Introductory Material

A. Separate Treatment of Parallel FOIA and Civil Litigation

B. Use of FOIA as a “Discovery Tool” in Civil Litigation

C. FOIA and Res Judicata/Collateral Estoppel

D. Impact of Parallel Litigation on FOIA Exemption Claims

1. Origins of Doctrine - NLRB Cases

2. Criminal Proceedings

3. Tax Court Proceedings

Working Papers

Table of Worksheets

Worksheet 1 IRS Disclosure Offices

Worksheet 2 Form 4506 - Request for Copy of Tax Return

Worksheet 3 Form 4506-A - Request for Public Inspection or Copy of Exempt or Political Organization IRS Form

Worksheet 4 Form 4506-T - Request for Transcript of Tax Return

Worksheet 5 Rev. Proc. 95-15 - Request for Background Documents Relating to Ruling Letters and Technical Advice Memoranda

Worksheet 6 Notice 437-A - Notice of Intention to Disclose

Worksheet 7 Notice 393 - Information on an IRS Determination to Withhold Records Exempt from the Freedom of Information Act, 5 USC 552

Worksheet 8 Memorandum for Heads of all Federal Departments and Agencies issued October 12, 2001 by Attorney General John Ashcroft

Worksheet 9 FOIA Flowchart (A Step-by-Step Diagram for Making a FOIA Request to the Internal Revenue Service)

Worksheet 10 Request for Information Under the Freedom of Information Act (FOIA), 5 USC 552

Worksheet 11 Request for Audit Workpapers Under the Freedom of Information Act (FOIA), 5 USC 552

Worksheet 12 Administrative Appeal from Denial of Freedom of Information Act (FOIA) Request, 5 USC 552

Worksheet 13 Freedom of Information Act (FOIA) Complaint, 5 USC 552

Worksheet 14 Request for Written Determination and Related Background File Documents Pursuant to 6110

Worksheet 15 Request for Additional Deletions Under 6110 in Response to Notice of Intention to Disclose

Worksheet 16 Request for Notification and Access to Information Under the Privacy Act of 1974, 5 USC 552a

Bibliography

OFFICIAL

Statutes:

Treasury Regulations:

Legislative History:

Revenue Procedure s and Rulings:

Other IRS Notices and Announcements:

Cases:

UNOFFICIAL

Text and Treatises:

Periodicals:

2001

2003

2004

2005