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Palmarini v. IRS, No. 17-3430, 2019 WL 1429547 (E.D. Pa. Mar. 29, 2019) (Beetlestone, J.)


Palmarini v. IRS, No. 17-3430, 2019 WL 1429547 (E.D. Pa. Mar. 29, 2019) (Beetlestone, J.)

Re:  Request for records concerning plaintiff's 2013 and 2014 tax audits

Disposition:  Granting in part and denying in part defendant's motion for summary judgment

  • Litigation Considerations, Adequacy of Search:  "[T]he IRS has presented sufficient evidence of an adequate search."  "By affidavit, two IRS officials described their analysis of Plaintiffs' FOIA request, their determination that the information sought would be in Plaintiffs' administrative files, which were held by the IRS Office of Appeals following Plaintiffs' Tax Court case."
  • Exemption 3:  The court holds that "the IRS has met its burden to establish that the material was properly withheld pursuant to Exemption 3."  The court relates that "Section 6103(a)-(b) protects taxpayer return information, including the taxpayer's identity, tax withheld, mailing address, and taxpayer identification number."  "Though the description of the material in the IRS's affidavits is sparse, in camera review verified that the material included names, contact information, wages, amount paid and owed, and return status of various taxpayers."  "Because this material comes within Section 6103(a)-(b)'s definition of 'taxpayer return information,' it was properly withheld."  "Separately, Exemption 3 and Section 6103(e)(7) protect from disclosure taxpayer return information that 'would "seriously impair Federal tax administration."'"  The court finds that "[d]isclosure of the [Discriminant Index Function . . . scores, which the IRS uses to rank and assess tax returns for increased review] scores and information regarding investigation of Plaintiffs' filings would 'seriously impair Federal tax administration,' 26 U.S.C. § 6103(e)(7), by providing insight into the IRS's investigative techniques and priorities, thereby aiding Plaintiffs and others to manipulate their filings to minimize the likelihood of being audited."
  • Exemption 4:  The court relates that "[t]he IRS has applied this exemption to withhold the bank account numbers of various entities."  The court finds that "[t]his is a proper usage of Exemption 4."
  • Exemption 5, Deliberative Process Privilege:  The court holds that "the IRS has met its burden to demonstrate that the material was properly withheld pursuant to the deliberative process privilege."  The court relates that the "withheld records reflect the IRS's consideration of potential enforcement actions against Plaintiffs, including its analysis of Plaintiffs’ tax filings and assessment of whether certain IRS actions could be justified."  The court finds that "[t]his is a proper usage of the deliberative process privilege."
  • Exemption 5, Attorney-Client Privilege:  The court relates that defendant withheld "material [which] reflected legal advice from the IRS Office of the Chief Counsel to IRS Technical Services regarding a proposed notice of deficiency in Plaintiffs' tax audit."  "This is a proper invocation of attorney-client privilege."
  • Exemption 6:  The court relates that "[t]he IRS invoked this exemption to withhold LexisNexis reports on individuals identified as associated with Plaintiffs, an evaluation of an IRS agent working on Plaintiffs' case, and third party individuals' personal information, such as bank account numbers, social security numbers, and dates of birth."  "Plaintiffs, for their part, do not assert that this information would 'contribut[e] significantly to public understanding of the operations or activities of the government.'"  "Nor is it apparent how this information might serve that goal."  "As a result, the IRS has met its burden in demonstrating that the information was properly withheld."
  • Exemption 7(E):  The court relates that "[t]he two documents that were withheld exclusively under Exemption 7 are (1) a checklist form that indicates why Plaintiffs were selected for examination and includes other grounds that the IRS uses to assess compliance (document 946); and, (2) the password for a disk from a financial institution (document 2955)."  "As to the checklist, the IRS has provided an adequate 'explanation of what procedures are involved and how they would be disclosed' by explaining that the checklist contains information on the IRS's enforcement processes and priorities, and thus its disclosure may enable tax dodgers to avoid detection."  "As to the password, the IRS cites Exemption 7(E) as the basis for withholding, without explaining how the password, used by a financial institution, relates to the law enforcement techniques, procedures and guidelines protected by that provision."  "Accordingly, the IRS has not met its burden of demonstrating that document 2955 is properly withheld pursuant to Exemption 7(E), and must produce this document to Plaintiffs."
Court Decision Topic(s)
District Court opinions
Exemption 3
Exemption 4
Exemption 5
Exemption 5, Attorney-Client Privilege
Exemption 5, Deliberative Process Privilege
Exemption 6
Exemption 7(E)
Litigation Considerations, Adequacy of Search
Updated January 11, 2022