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Fogg v. IRS, No. 19-03006, 2023 WL 2044327 (D. Minn. Feb. 16, 2023) (Nelson, J.)


Fogg v. IRS, No. 19-03006, 2023 WL 2044327 (D. Minn. Feb. 16, 2023) (Nelson, J.)

Re:  Request for the terms of a tax professional authentication process contained within the Internal Revenue Manual (“IRM”)

Disposition:  Following remand from the Court of Appeals for the Eighth Circuit, granting defendant’s motion for summary judgment; denying plaintiff’s cross-motion for summary judgment

  • Exemption 7, Threshold:  The court relates that “[i]n this case, the Eighth Circuit found that the IRS had failed to meet its burden to demonstrate that the redactions in IRM § were ‘compiled for law enforcement purposes.’”  “[Defendant’s] affidavit had erroneously described the IRS as purely a ‘law enforcement agency,’ contrary to case law recognizing its mixed function and contrary to provisions demonstrating that the IRM itself has a mixed function.”  “Therefore, on remand, this Court gives special attention to evaluating whether the redactions in IRM § were compiled for ‘law enforcement purposes.’”  “Based upon its in camera review, the Court is satisfied that the specific sections of IRM § withheld by the IRS were compiled to enforce the law.”  “‘[L]aw enforcement entails more than just investigating and prosecuting individuals after a violation of the law . . . The “ordinary understanding” of the term “includes ... proactive steps designed to prevent criminal activity and maintain security.”’”  “While many of the provisions in IRM § address standard administrative procedures for authenticating third parties and properly documenting that authentication, . . . the redactions specifically address exceptions to these standard procedures.”  “These exceptional situations involve a heightened risk of fraud or identity theft.”  “The redactions thus instruct IRS employees how to proceed in these situations, when to require additional authentication measures, and when the third party has provided sufficient information to overcome the extra scrutiny.”  “Because it addresses how IRS employees identify situations that present a greater likelihood of fraudulent manipulation of sensitive taxpayer information, the withheld material in IRM § was compiled for the purpose of ‘prevent[ing] criminal activity.’”  “The Court accordingly finds that the withheld material was compiled for law enforcement purposes.”
  • Exemption 7(E):  “[T]he Court’s in camera review has confirmed that the IRS appropriately withheld the material in IRM § pursuant to FOIA Exemption 7(E).”  First, “[t]he Court finds that releasing the redacted portions of IRM § would ‘disclose techniques and procedures for law enforcement investigations.’”  “As noted above, the redactions address different situations in which the behavior or the information provided by the third party seeking authorization raises a suspicion of fraud.”  “Disclosing the withheld material would reveal techniques that IRS agents use to confirm or disprove their suspicions, including the information that the IRS seeks from individuals in these particular situations.”  “Therefore, after conducting an in camera review of IRM §, the Court finds that releasing the withheld portions would disclose ‘techniques and procedures’ covered by Exemption 7(E).”

    Second, the court finds that, “[a]s explained earlier, the withheld material addresses exceptional situations with an elevated likelihood of fraud and the procedures that IRS agents must employ to confirm or rebut their suspicions.”  “Revealing the particulars of these exceptional situations would give potential fraudsters important details about the red flags their actions raise.”  “Moreover, ‘[d]isclosing in advance the specific questions that [IRS] agents may use to suss out and evaluate’ potentially fraudulent third-party applicants would help those with nefarious intentions ‘to tailor their answers to avoid detection.’”  “For these reasons, the Court finds that disclosing the redactions in IRM § ‘could reasonably be expected to risk circumvention of the law.’”
  • Litigation Considerations, “Reasonably Segregable” Requirements:  Following an in camera review, “the Court finds that that none of the redacted material is “reasonably segregable” from the non-exempt portions of the provision.”
Court Decision Topic(s)
District Court opinions
Exemption 7
Exemption 7(E)
Exemption 7, Threshold
Litigation Considerations, “Reasonably Segregable” Requirements
Updated March 14, 2023