forth the issue which was decided against the government, a brief discussion of the facts and the reasoning of the attorney behind his or her recommendation that the Commissioner either acquiesce or nonacquiesce in a decision of the Tax Court or of the federal district court. According to Mr. Pigg, the AOD is reviewed within the Tax Litigation Division and after approval it is sent to the Office of the Assistant Commissioner (Technical). Finally, if the Assistant Commissioner (Technical) is not in disagreement with the recommendation to acquiesce or nonacquiesce, the AOD is printed and distributed. The IRS does not release or publish for public dissemination any opinion behind its decision to acquiesce or nonacquiesce.
AOD's are made available to IRS personnel and are cited and applied by IRS personnel in later AOD's, and TM's to promote the consistent application of the tax laws. Defendant's Answers to Interrogatories PP 6, 7C.
The Court finds that AOD's are not exempt from disclosure by section 552(b) (5). AOD's contain the reasons behind the acquiescence or nonacquiescence of the IRS in court decisions. These reasons are of vital concern to the public and their release will not harm the decision-making process of the agency.
In support of its motion for summary judgment with respect to TM's, the defendant has filed the affidavit of Robert A. Bley, the Director of the Office of the Chief Counsel, Internal Revenue Service. According to Mr. Bley, TM's are memoranda from the Commissioner of the Internal Revenue Service to the Assistant Secretary of the Treasury (Tax Policy). The Brey affidavit states that TM's are prepared by attorneys in the Legislation and Regulations Division or the Employee Plans and Exempt Organizations Division of the Office of Chief Counsel in connection with the preparation of a proposed Treasury decision. According to the affidavit, TM's are attached to a draft of a proposed Treasury decision. After consideration at several levels within the Office of Chief Counsel, a final draft of a notice of proposed rulemaking and the TM is forwarded to the Assistant Commissioner (Technical), the Chief Counsel, and the Commissioner for final approval. The approved notice of proposed rulemaking is then published in the Federal Register and written comments are solicited. After consideration of the written comments and testimony at a public hearing if one is requested, an attorney in the Legislation and Regulations Division prepares a preliminary draft of a Treasury decision and accompanying TM. Then the proposed Treasury decision and the TM are approved in the same manner as to notice of proposed rulemaking and its accompanying TM. According to the Brey affidavit, generally, a TM summarizes or explains the proposed rules, provides background information, states the issues involved, identifies any controversial legal or policy questions, discusses the approach taken by the draftsperson, and gives the reasons for the approach.
TM's are indexed, digested, and made available to IRS personnel in order to assure consistent treatment of taxpayers. Defendant's Answer to Interrogatory P 6.
The Court finds that TM's are not encompassed by exemption (5). TM's explain the reasons behind the adoption of the Treasury Decision. They are used by IRS personnel in determining the tax status of taxpayers. Accordingly, they are not deliberative material.
D. These Conclusions Are Supported By Two Recent District Court Decisions.
The conclusions of this Court with respect to the applicability of exemption (5) to GCM's, AOD's, and TM's are supported by two recent district court cases. In Pies v. Internal Revenue Service, 484 F. Supp. 930 (D.D.C.1979), Judge Parker ruled that a TM was not protected from mandatory disclosure by section 552(b)(5). The Court found that the facts indicate that the IRS had adopted the reasoning of the TM. Id. at 933. Furthermore, the Court held that "(w)here the agency has, by its own actions, left the status of deliberative material ambiguous, but clearly has used that material in some final formal way, the Court must strike the balance in favor of public disclosure rather than recognize an exemption under FOIA." Id. In this case, there is no dispute that the final TM which is placed within the IRS retrieval system is used by the agency as the formal statement of the rationale behind the adoption of the Treasury decision.
In Falcone v. Internal Revenue Service, 479 F. Supp. 985 (E.D.Mich.1979), the Court held that a GCM was not within the protection of exemption (5). According to the Court in Falcone, GCM's are not protected by the deliberative privilege because they "state current agency interpretations and note where the proposed ruling may differ." Id. at 988.
Finally, the Court finds that the material at issue in this suit is not protected by the attorney-client privilege and does not constitute protected attorney work product. See id.
An order in accordance with this Memorandum Opinion shall be issued of even date herewith.