Argyle Sys. Inc. v. IRS, No. 21-16, 2022 WL 4464854 (D.D.C. Sept. 25, 2022) (Sullivan, J.)

Argyle Sys. Inc. v. IRS, No. 21-16, 2022 WL 4464854 (D.D.C. Sept. 25, 2022) (Sullivan, J.)

Re:  Request for nine categories of reporting records

Disposition:  Granting defendant’s motion for summary judgment; denying plaintiff’s cross-motion for summary judgment

• Litigation Considerations, Adequacy of Search:  The court notes that “[plaintiff] does not challenge the adequacy of the search for the records sought in Item 3 of the FOIA request.”  “Accordingly, the IRS’s Motion for Summary Judgment is granted as to Item 3 of the FOIA request.”
   
• Exemption 3:  The court relates that “[t]he IRS invokes Exemption 3 in conjunction with 26 U.S.C. § 6103(a) to categorically withhold the remaining items in the FOIA request.”  “It is well-settled that “Section 6103(a) is an exemption 3 provision.”  “Section 6103 provides that ‘[r]eturns and return information shall be confidential . . . except as authorized by this title.’”  “It further provides that no United States employee ‘shall disclose any return or return information obtained by him in any manner in connection with his service.’”  “Section 6103(b) broadly defines ‘return information’ . . . .”  “At dispute is whether the submitted Forms 8655 and the reports are ‘return information.’”  “[Plaintiff] contends that the requested records are not return information because ‘by IRS’s admission, none of the requested records constitutes a return or a document derived from a return.’”  “[T]he Court concludes that the information in Form 8655 falls within the definition of ‘return information.’”  “Item 1 of the FOIA request – Form 8655 – as submitted to the IRS, contains:  (1) identifying information about the taxpayer filing the form – the taxpayer’s name, EIN, address and telephone number; (2) information that identifies taxpayer’s [Reporting Agent (“RA”)] – the RA’s name, EIN, address, and telephone number; (3) which types of returns the RA is authorized to sign and file on behalf of the taxpayer; (4) which types of tax returns for which the RA is authorized to make deposits and payments; and (5) whether the RA is authorized to receive information about the taxpayer on Forms Series W-2, 1099, or 3921/3922.”  “The taxpayer signs and dates the Form 8655 and provides their title.”  “This data is ‘return information’ because it is provided to the IRS ‘with respect to the determination of the existence, or possible existence, of liability.’”  “Item 2 of the FOIA request is for RA’s Lists (‘RAL’).”  “The RAL is submitted by an RA and, among other things, identifies taxpayers for whom an RA will perform authorized services.”  “The Court concludes that RALs are ‘return information’ because they provided to the IRS ‘with respect to the determination of the existence, or possible existence, of liability.’”  “The parties do not dispute that the remaining items in the FOIA request are reports generated from the RAF database, which contains information derived from the Form 8655.”  “Item 4 contains lists of taxpayer EINs associated with particular RAs.”  “Items 5 and 6 also contain taxpayer EINs.”  “Item 7 contains information found on the Form 8655.”  “Item 8 contains ‘listings and reports of the additions or deletions of taxpayer/client information to the RAF database.’”  “Item 9 contains ‘a report for each RA whose clients (taxpayers) have revoked the RA’s authorization.’”  “As with the Form 8655 and the RAL, the Court concludes Items 4 through 9 of the FOIA request are ‘return information’ because they are provided to the IRS ‘with respect to the determination of the existence, or possible existence, of liability.’”
   
• Litigation Considerations, Foreseeable Harm Showing:  The court relates that “[plaintiff] argues that the IRS has failed to comply with the foreseeable harm standard.”  The court finds that “[plaintiff] is mistaken.”  “‘“[T]he foreseeable harm standard only applies to those FOIA exemptions under which discretionary disclosures can be made.”’”  “‘Information that is prohibited from disclosure or exempt from disclosure by law “is not subject to discretionary disclosure and is therefore not subject to the foreseeable harm standard.”’”  “Here, as explained . . . disclosure is prohibited by law.”  “Accordingly, the IRS was not required to comply with the foreseeable harm standard.”
   
• Litigation Considerations, “Reasonably Segregable” Requirements:  The court holds that “where return information is exempt from disclosure under Section 6103(b), the IRS has no duty under FOIA to undertake redactions.”