Goldstein v. IRS, No. 14-02186, 2016 WL 1180157 (D.D.C. Mar. 25, 2016) (Mehta, J.)

Goldstein v. IRS, No. 14-02186, 2016 WL 1180157 (D.D.C. Mar. 25, 2016) (Mehta, J.)

Re: Request for tax records concerning plaintiff's father's estate

Disposition: Granting in part and denying in part defendant's motion for summary judgment; denying plaintiff's motion for summary judgment; denying plaintiff's motion for Vaughn Index

• Procedural Requirements, Proper FOIA Requests:  The court finds that "even though the IRS has established a separate 'non-FOIA' process for requesting tax returns, as opposed to all other types of records held by the IRS, it does not follow that an action challenging the denial of such tax returns is not subject to FOIA."  "To the contrary, . . . the IRS must defend any withholding of tax returns under the procedural and substantive rules of FOIA."  The court explains that "[t]he IRS' position misstates the law" because "26 U.S.C. § 6103, the statute which governs the confidentiality and disclosure of tax records" "'does no more than what is done by all nondisclosure statutes covered by Exemption 3: it prohibits the disclosure of certain information (returns and return information).'"  "In that way, Exemption 3 and section 6103 are 'entirely harmonious.'"
   
• Procedural Requirements, Proper FOIA Requests:  "[T]he court will remand [several] portion[s] of [plaintiff's request] to the IRS so that it can advise Plaintiff in writing 'in what respect' his request is deficient under 26 C.F.R. §§ 601.702(c)(1)(i), 601.702(c)(4)(i), thereby giving him an opportunity to perfect the request and exhaust his remedies."  The court finds that "[b]ecause the IRS did not notify Plaintiff 'in what respect the request' '[was] deficient,' he did not have the opportunity to 'resubmit[ ] or amend[ ]' his request 'for consideration.'"  The court finds that "[t]he IRS cannot now claim that Plaintiff failed to perfect his request when, according to its own regulations, it denied him the opportunity to do so."
   
• Exemption 6:  "The court will uphold the IRS' withholding of an employee's phone number . . . pursuant to Exemption 6."
   
• Exemption 7(E):  "[T]he court affirms the IRS' invocation of Exemption (7)(E) . . . with regard to its redaction of Discriminant Function . . . scores."  The court takes note of defendant's explanation that "'DIF scores, standards used by the Service to evaluate tax returns, play an important role in the Service's decision to audit certain tax files' and their release could allow 'individuals to manipulate their DIF scores and possibly avoid an examination by the Service.'"
   
• Exemption 3:  "The court agrees that the IRS properly declined to search for documents responsive to [plaintiff's request for Bank of America's return and return information]."  The court finds that "Section 6103(e)(1)(D) provides that the returns of a corporation may only be accessed by (i) a person designated by the board of directors; (ii) an officer or employee of the corporation upon written request by a principal officer; or (iii) a bona fide shareholder owning 1 percent or more of the corporation."  The court finds that "[p]laintiff does not contend that he met any of those criteria or that he provided the proper waiver from the bank."