Goldstein v. IRS, No. 14-02186, 2017 WL 4358674 (D.D.C. Sept. 29, 2017) (Mehta, J.)

Goldstein v. IRS, No. 14-02186, 2017 WL 4358674 (D.D.C. Sept. 29, 2017) (Mehta, J.)

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

Disposition:  Granting in part and denying in part defendant's second motion to dismiss and for summary judgment; denying plaintiff's cross-motion for summary judgment

• Procedural Requirements, Proper FOIA Requests:  As to several items in plaintiff's request, the court holds that "[p]laintiff . . . has failed to show that he perfected his request for the Estate's tax records relating to tax years before his father's death."  The court explains that "Section 6103 of Title 26 . . . makes returns and return information presumptively confidential, and bars disclosure of such information except as authorized by the IRS code."  "To establish his right to access records concerning his father's Estate, Section 6103 requires Plaintiff to show that (1) he is an 'heir at law, next of kin, or beneficiary under the will, of the decedent,' and (2) he has 'a material interest which will be affected by information contained therein.'"  "The parties agree that Plaintiff is an heir at law and beneficiary of the estate, and thus satisfies the first element of Section 6103(e)(1)(E)."  "Although it is true that, because the failure to exhaust is treated as an affirmative defense, the burden of proof ordinarily rests upon the defendant, . . . applying that principle here would be inconsistent with the statutory and regulatory scheme, as well as defy commonsense."  "Section 6103 explicitly protects the confidentiality of taxpayer records unless release is authorized under a provision of the Internal Revenue Code."  The court finds that "[p]laintiff bears the burden of proving that he has a material interest in the requested records; merely questioning the sufficiency of the IRS' explanation for denying him access will not do."
  
  As to another item, the court finds that "[d]efendant erred in finding Plaintiff was not a beneficiary of the Living Trust, the court denies summary judgment as to [this item] and directs Defendant, once again, to consider whether Plaintiff has met his burden of establishing that he has a material interest in the Trust's tax returns."  "In an effort to avoid another round of lengthy briefing on the issue, the court wishes to be perfectly clear: The only question remaining for Defendant is the extent to which Plaintiff has demonstrated a material interest in the Trust's fiduciary tax returns."
  
  Regarding other items, "[t]he court agrees with Defendant that Plaintiff has not demonstrated he was a 'partner' . . . such that he is entitled to . . . partnership income tax audits and tax returns."  "Accordingly, the court finds Plaintiff cannot perfect his requests for [these items] and will enter judgment in favor of Defendant as to claims concerning [these] Items."
  
  Additionally, the court finds that "[p]laintiff's request for [records concerning the "alleg[ation] that Plaintiff's sister . . . and others had conspired to evade tax payments as to Plaintiff's father's estate and related entities"] calls for the production of 'return information' protected from disclosure."  "By requesting . . . all information relating to his whistleblower complaint, Plaintiff necessarily asks for records that would reveal 'whether [a] taxpayer's return was, is being, or will be examined or subject to other investigation or processing.'"  "The court will not, however, enter judgment in Defendant's favor as to [this item] at this time because there remains a factual gap in the record."  "The court cannot determine from the present record which specific taxpayers were the subject of the meetings at issue and, correlatively, whether Plaintiff can perfect his request as to any meeting."
   
• Litigation Considerations, Adequacy of Search:  "The court finds [the] efforts 'reasonably calculated to discover the requested documents.'"  First, regarding one search, the court finds that "[defendant] searched the location most likely to contain the Estate's return . . . using several search terms to ensure that he had located the Estate's tax records."  "After doing so, [defendant] sent a records request to the Federal Records Center using the Document Locator Number of Estates tax return, traced the records . . ., inquired . . . about the records' whereabouts, and learned that [the potential holder] was unable to locate any responsive records."  Second, regarding another item, "[t]he court finds that Defendant's search, though unfruitful, was nonetheless adequate for purposes of FOIA."  "[Defendant] makes clear that he identified the Estate's tax records [in] . . . the place most likely to contain those records; located the Document Locator Numbers for the Estate's fiduciary returns; and requested copies of those returns from the Federal Records Center."  "That process was sufficient to carry out Defendant's FOIA search obligations."
   
• Litigation Considerations, "Reasonably Segregable" Requirements:  "The court finds Defendant performed an adequate segregability analysis with respect to the perfected subpart of [the first part of his request]."  "[Defendant's] declaration describes the process by which [it] reviewed the documents at issue in an attempt to tease out non-exempt portions of the materials that could be disclosed, and Plaintiff points to no contrary evidence to rebut the presumption that [defendant's] analysis was proper."