Obtaining Information from the Government — Disclosure Statutes (Portfolio 625)

Tax Management Portfolio, No. 625-2nd, Obtaining Information from the Government — Disclosure Statutes, discusses the primary disclosure statutes providing access to IRS information, the Freedom of Information Act, §§6103–6105 and 6110 of the Internal Revenue Code (the “Code”), and the Privacy Act of 1974, as well as statutory prohibitions on disclosure. To view this Portfolio, visit Bloomberg Tax for a free trial.



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Tax Management Portfolio, No. 625-2nd, Obtaining Information from the Government — Disclosure Statutes, discusses the primary disclosure statutes providing access to IRS information, the Freedom of Information Act, §§6103–6105 and 6110 of the Internal Revenue Code (the “Code”), and the Privacy Act of 1974, as well as statutory prohibitions on disclosure. In addition, the 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.

The Freedom of Information Act (“FOIA”) is the disclosure statute with the broadest reach. The FOIA applies to all federal agencies, including the IRS. Under FOIA, a taxpayer may request disclosure of a wide variety of IRS records containing factual information collected or prepared by the IRS, legal analyses and decisions of the IRS, and procedural and operational rules of the IRS. Disclosures pursuant to FOIA are limited by exemptions in the FOIA statute as well as the numerous taxpayer confidentiality limitations imposed by §6103.

Section 6104 addresses public access to exempt organization and employee pension plan exemption applications and related materials.

Section 6110 provides the exclusive access to the written determinations of the IRS, including private letter rulings, technical advice memoranda, determination letters, and related background file documents.

The Privacy Act of 1974 (5 U.S.C. §552a) provides a more limited source of access to IRS records. The Privacy Act enables an individual to obtain access to certain records maintained by an agency in its system of records with respect to that individual.

This Portfolio may be cited as Greenhouse, Spencer, McCormack, 625-2nd T.M., Obtaining Information from the Government — Disclosure Statutes.


Robin Greenhouse

Robin Greenhouse, B.A., summa cum laude, University of Maryland; J.D., Temple University School of Law. Partner, McDermott Will & Emery LLP (Washington, D.C.); Former Chair, Committee on Appointments to the Tax Court of the American Bar Association Section of Taxation; former Chair, Court Procedure and Practice Committee of the American Bar Association Section of Tax Section. Current practice includes resolving complex federal tax controversies through dispute resolution techniques, including Fast Track Mediation, Pre-Filing Agreements, IRS Appeals, and Post-Appeals Mediation and litigation. Recognized authority on attorney-client, work product and tax practitioner privileges, tax litigation and IRS administrative practice and procedure.

Kevin Spencer

Kevin Spencer, B.S., cum laude, Mary Washington College (1992); J.D., cum laude, University of Miami School of Law (1996); LL.M, with distinction, Georgetown University (2002). Partner, McDermott Will & Emery LLP (Washington, D.C.); former clerk to Honorable Robert P. Ruwe of the U.S. Tax Court. Current practice includes tax controversy (audit and appeals) and litigation issues (trial and appellate levels).

Brad McCormack

Brad McCormack, B.S., M.A., Providence College; J.D., University of Notre Dame Law School; Certified Public Accountant. Current practice includes federal income tax matters, particularly tax controversy and international tax.

Table of Contents

Detailed Analysis
I. Introduction
II. Access to IRS Information Pursuant to Disclosure Statutes
A. In General
B. Taxpayer Access to Information Under the Freedom of Information Act
1. Overview
2. Making a FOIA Request
a. Procedures
b. Fees
c. FOIA Exemptions in General
d. IRS Response to FOIA Request
e. Administrative Appeals of a FOIA Denial
f. Judicial Review of a FOIA Denial
g. IRS Response Time
h. Requests for Expedited Processing
3. 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 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
4. Publicly Available Information
a. Overview of IRS Duties to Disclose Under FOIA
b. Examples of Documents Available
c. Reverse FOIA
C. Disclosure Under §6103
1. History of §6103
2. Overview
3. Relationship Between FOIA and §6103
4. General Rule — §6103(a)
5. Returns and Return Information — §6103(b)
a. “Return” Defined
b. “Return Information” Defined
6. Disclosure to a Designee of the Taxpayer — §6103(c)
7. Disclosure to State Officials — §6103(d)
8. Disclosure to Persons Having Material Interest — §6103(e)
9. Disclosure to Committees of Congress, the President and Certain Appointees — §6103(f) & §6103(g)
10. Disclosure to Federal Officials for Purposes of Tax Administration — §6103(h)(1), §6103(h)(2) & §6103(h)(3)
a. Disclosure to and by Treasury Personnel — §6103(h)(1)
b. Disclosure to Department of Justice Personnel — §6103(h)(2) & §6103(h)(3)
c. Disclosure by DOJ Personnel
11. Disclosure in Judicial and Administrative Tax Proceedings — §6103(h)(4)
a. Proceedings Pertaining to Tax Administration
b. Persons to Whom Disclosure May Be Made Under §6103(h)(4)
c. The Taxpayer as a Party — §6103(h)(4)(A)
d. “Directly Related” to a Judicial or Administrative Proceeding — §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
12. Disclosure to Federal Officials in Non-Tax Criminal Investigations — §6103(i)
13. Disclosure of IRS Statistical Studies — §6103(j)
14. 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
15. Disclosure to Government Agencies for Non-Tax Purposes — §6103(l)
16. Disclosure of Taxpayer Identity Information — §6103(m)
17. Disclosure to Government Service Providers — §6103(n)
18. Alcohol, Tobacco, Firearms and Gambling Taxes — §6103(o)
19. Procedural Rules Regarding the Disclosure of Returns and Return Information — §6103(p)
20. Disclosure for Jury Selection Purposes
21. Penalties for Unlawful Disclosure
a. Civil Penalties for Violation of §6103
b. Criminal Penalties for Violation of §6103
(1) Section 7213
(2) Section 7213A
D. Section 6110 — Public Inspection of IRS Written Determinations
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 IRS Chief Counsel Advice
3. Lack of Precedential Value
4. Documents and Information Obtainable Under §6110
a. Written Determinations
b. Background File Documents
c. The IRS Is Obligated to Retain Background File Documents Relating to Written Determinations
d. Prior Written Determinations
e. Third-Party Contact Information
f. Requests for Third-Party Contact Information
5. Documents and Information Not Subject to §6110
6. Information that Must Be Deleted From Disclosure Under §6110
a. Taxpayer Identifying Information — §6110(c)(1)
b. National Secrets — §6110(c)(2)
c. Information Exempted from Disclosure Under Any Other Statute — §6110(c)(3)
d. Trade Secrets — §6110(c)(4)
e. Sensitive Personal Information — §6110(c)(5)
f. Material Damaging to the Standing of Financial Institutions — §6110(c)(6)
g. Geological Information Concerning Wells — §6110(c)(7)
h. FOIA Exemptions Without Parallel Under §6110
i. Modified FOIA Exemption Regime for Deletions of Chief Counsel Advice
7. Actions to Restrain Disclosure
8. Requests for Additional Disclosure
9. Time for Disclosure Under §6110
a. In General
b. Postponement Until Transaction Is Complete
c. Postponement in Enforcement Cases
10. Procedures for Obtaining Access Under §6110
a. The IRS Routinely Publishes Most Written Determinations
b. Items Available Only Upon Written Request
c. Procedures for Requesting Background File Documents
d. Fees
11. Judicial Remedies for IRS Failure to Make Deletions or Comply with Required Time Limits
E. Taxpayer Access to Information Under the Privacy Act of 1974
1. Overview
2. Making a Privacy Act Request
3. Remedies for Denial of Privacy Act Request
F. Disclosure of Exempt Organization Materials Under §6104
1. Section 6104(a)(1)(A) — Public Inspection of Materials Relating to Tax-Exempt Organizations
2. Section 6104(a)(1)(B) — Public Inspection of Materials Relating to Pension and Other Plans
3. Section 6104(b) — Public Inspection of Information Returns
4. Information Subject to Redaction
5. Documents and Information Not Subject to §6104
6. Inspection Procedures
7. Section 6104(c) — Disclosure to State Officials
8. Section 6104(d) — Disclosure Obligations Imposed on Exempt Organizations
9. Penalties for Violations of §6104
G. Disclosure of Tax Convention Information Under §6105
H. IRS Letter-Forwarding Program
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. 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. IRS Documents Not Subject to §6110
C. Miscellaneous IRS Communications and Rulings (Including Obsolete Rulings)

Working Papers

Table of Worksheets
Worksheet 1 FOIA Flowchart (A Step-by-Step Diagram for Making a FOIA Request to the Internal Revenue Service)
Worksheet 2 Request for Information Under the Freedom of Information Act (FOIA), 5 U.S.C. §552
Worksheet 3 Administrative Appeal from Denial of Freedom of Information Act (FOIA) Request, 5 U.S.C. §552
Worksheet 4 Freedom of Information Act (FOIA) Complaint, 5 U.S.C. §552
Worksheet 5 Request for Written Determination and Related Background File Documents Pursuant to §6110
Worksheet 6 Request for Additional Deletions Under §6110 in Response to Notice of Intention to Disclose
Worksheet 7 Request for Notification and Access to Information Under the Privacy Act of 1974, 5 U.S.C. §552a