Castro v. IRS, No. 20-1843, 2022 U.S. Dist. LEXIS 51213 (D.D.C. Mar. 22, 2022) (Kollar-Kotelly, J.)

Castro v. IRS, No. 20-1843, 2022 U.S. Dist. LEXIS 51213 (D.D.C. Mar. 22, 2022) (Kollar-Kotelly, J.)

Re:  Request for records concerning cancellation and reinstatement of plaintiff's credential to serve as enrolled agent ("EA") before IRS

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

• Litigation Considerations, Adequacy of Search:  The court finds that "[t]he IRS's search for records responsive to Plaintiff's FOIA requests was adequate."  "[T]he declarations provided by [defendant] detail the agency's efforts to locate records responsive to the categories identified by Plaintiff—including efforts to identify the appropriate IRS employee (whom Plaintiff apparently misnamed in his FOIA requests)."   "[Defendant's] Declaration, in particular, explains the scope and contents of the databases searched, and the Court may rely on such 'authoritative' agency databases as part of a reasonable search for responsive records."  The court further notes that "[a]ny suggestion that some sort of 'search' could be run across all records maintained by the IRS is unfounded."  "Moreover, Plaintiff explicitly indicated that he was seeking records 'in connection' with his claim that his enrolled agent license was 'impermissibly cancelled' and 'later reinstated' and associated with a particular IRS employee."  "The steps taken by [defendant] demonstrate reasonable efforts to identify such responsive records."
  
  "First, Plaintiff contends that the IRS's search was inadequate because [defendant] did not indicate in [its] declaration that the IRS had searched for Plaintiff's name or 'EA license number' in any 'IRS database.'"  "[Defendant's] declaration rebuts these points; [defendant] attests that she queried the relevant internal database for Plaintiff's name, and that an additional query for his license number would have produced the same results."  "Plaintiff next argues that the IRS's search was inadequate because it failed to search the Large Business & International Division ("LB&I") for responsive records."  "But both of Plaintiff's FOIA requests indicate that he is seeking materials regarding the alleged cancellation of his EA credential—not records related to his representation of clients before the LB&I."  "Relatedly, Plaintiff claims that the IRS failed to search emails of LB&I employees whose names appear on email communications that the IRS did produce to Plaintiff in response to his FOIA requests."  "The IRS responds that the very email cited by Plaintiff is from the relevant time period, during [particular employee's] tenure at LB&I—in other words, its search did locate records relating to her employment in LB&I in 2019."  "Therefore, Plaintiff's objection on this point is unpersuasive."  "Plaintiff also argues that the IRS 'did not follow up with [three] additional IRS employees' in LB&I whose names appear on correspondence that was produced to him in response to his FOIA requests."  "Absent any 'countervailing evidence,' Plaintiff's mere speculation that the additional email recipients 'might' have additional responsive information is insufficient to undermine the Court's finding that IRS conducted a reasonable search for records responsive to his FOIA requests." 
  
  "Finally, Plaintiff argues that the IRS's failure to produce several specific documents undermines the adequacy of its search."  "In any event, the IRS refutes each of Plaintiff's arguments about specific records."  The court holds that "[p]laintiff's objections fail to undermine the adequacy of the IRS's efforts."
   
• Exemption 7(A):  "[Defendant] attests that the redacted portions of [particular] documents 'contain[] information relevant to a law enforcement matter which is not yet concluded, i.e., an investigation regarding plaintiff's activities as an Enrolled Agent.'"  "[Defendant] attest[s] that there is an 'investigation regarding Plaintiff's activities as an EA,' not an 'investigation regarding the status of Plaintiff's [EA] credential.'"  The court finds that "[t]he IRS, therefore, has satisfied its burden of demonstrating the first requirement of Exemption 7(A)."  "The IRS has also demonstrated that release of the redacted portions of these documents could reasonably be expected to interfere with enforcement proceedings, specifically by 'prematurely revealing the IRS' evidence and/or strategy; revealing the history, nature, direction, scope or focus of the investigation; and by giving plaintiff premature insight into the strength of the IRS' position and/or reliance on certain evidence.'"  "The IRS further asserts that release of the withheld information would enable the plaintiff to attempt to alter or destroy records that the IRS has not yet obtained, or to create or backdate documents, or to contact potential witnesses and possibly alter their testimony."  "The Court disagrees [with plaintiff] that the 'facts' on the record evidence bad faith on behalf of the IRS."  "Accordingly, the Court upholds the IRS's withholding of certain portions of the above-listed documents pursuant to Exemption 7(A)."
   
• Exemption 3:  "Section 6103(e)(7) states that '[r]eturn information with respect to any taxpayer may be open to inspection by or disclosure to any person authorized by this subsection to inspect any return of such taxpayer if the Secretary determines that such disclosure would not seriously impair Federal tax administration.'"  "The IRS argues that the information redacted from the nine pages of records at issue falls within the broad definition of 'return information' because it 'consists [of] information received by, recorded by, prepared by, furnished to, or collected by the Secretary of the Treasury with respect to a return or with respect to the determination of the existence, or possible existence, of tax, penalty, or other plaintiff liability.'"  "Plaintiff does not contest that the information at issue is 'return information'; he challenges only the IRS's assertion that its release would 'seriously impair Federal tax administration.'"  "The IRS's justification that release of the redacted information would impair tax administration is similar to its rationale for its Exemption 7(A) claims . . . ."  "As the Court finds that the IRS has provided sufficient detail to demonstrate that Plaintiff is under investigation by the IRS, and that disclosure of the redacted portions of these 9 pages of records would impair its investigation, it also finds that the IRS has discharged its obligation to demonstrate that the redacted information would 'seriously impair Federal tax administration' pursuant to § 6103(e)(7)." 
  
  "The IRS [also] relies on Exemption 3 and 26 U.S.C. § 6103(a) and (b) to redact information . . . ."  "The IRS indicates that the redacted portions of these documents contained 'return information,' 'i.e., information relating to the plaintiff's tax liability or the IRS' investigation of him.'"  "The IRS states that it withheld such 'return information' because '[P]laintiff's FOIA requests were not accompanied by plaintiff's authorization that the IRS could release such "return information" to his attorney Mr. Peter Sorenson.'"  "[Plaintiff] indicates that he has since provided such forms, and therefore 'the issue of whether Plaintiff waived his right to privacy is no longer before the Court.'"  "Plaintiff also does not address these redactions in his Reply."  "Accordingly, it appears that the IRS's withholdings pursuant to Exemption 3 and 26 U.S.C. § 6103(a) and (b) are no longer at issue in this case."
   
• Litigation Considerations, In Camera Inspection:  "Plaintiff requests that the Court conduct an in camera inspection [of the material withheld pursuant to Exemption 7(A) and Section 6103(e)(7)]."  "Here, the Court concludes that in camera review is not necessary, as it finds the IRS's descriptions and justifications for its withholdings to be adequate."
   
• Litigation Considerations, "Reasonably Segregable" Requirements:  "Granting the IRS its due presumption of regularity, the Court finds that the IRS has discharged its burden concerning segregability."  "The IRS has not withheld in full any records, but has redacted 11 pages out of the 143 total pages produced to Plaintiff."  "With respect to the portions of the eleven pages of redacted records, [defendant] attests that he has personally reviewed these records and has 'confirmed that the material withheld . . . is limited to information that meets the criteria of the Exemptions cited and that no segregable material has been redacted.'"  "The Court is satisfied that the IRS has appropriately segregated non-exempt information which has been produced to Plaintiff."