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AMERICAN SOCY. OF PENSION ACTUARIES v. IRS

September 11, 1990

AMERICAN SOCIETY OF PENSION ACTUARIES, Plaintiff,
v.
INTERNAL REVENUE SERVICE, Defendant



The opinion of the court was delivered by: SPORKIN

 STANLEY SPORKIN, UNITED STATES DISTRICT JUDGE

 This case involves a Freedom of Information Act ("FOIA") request for documents. The request, made by the American Society of Pension Actuaries ("ASPA"), sought to uncover the reasoning behind a revenue estimate contained in the President's Proposed Budget for Fiscal Year 1990. This matter is now before this Court on defendant's motion for summary judgment and plaintiff's opposition thereto, and following an in camera inspection by the Court of disputed documents. For the following reasons, defendant's motion is granted with respect both to documents pertaining to enforcement methods and to predecisional, deliberative documents. Certain of the documents inspected in camera by the Court, however, were neither predecisional nor enforcement-related. These documents formed the basis for the revenue estimate and were therefore embodied in the President's Budget. With respect to these documents, summary judgment is granted for the plaintiff.

 Background

 The President's Proposed Budget for Fiscal Year 1990 contained a provision estimating that "IRS Management Initiatives" could yield $ 2.6 billion in Fiscal Years 1990 and 1991. According to "General Explanations of the President's Budget Proposals Affecting Receipts," a document prepared by the Treasury Department, this revenue would come in part from more aggressive auditing of small retirement plans. The Treasury Department claimed that shifting examiners from other tasks to the examination of retirement plans would produce an additional $ 666 million in government receipts.

 ASPA is a non-profit professional association representing actuarial examiners who administer approximately 30% of the qualified retirement plans in the United States. Following release of the President's Budget, ASPA asked the Internal Revenue Service ("IRS") to deliver any documents relating to the $ 666 million estimate. When the IRS failed to comply with this request in a timely fashion, ASPA initiated this suit.

 Since the action was commenced, the IRS has produced some of the requested documents. Some documents were delivered with redactions, however, and others have been withheld entirely. The material still in dispute includes both documents pertaining to the IRS's planned implementation of its retirement-plan audit program as well as documents elaborating the basis on which the Administration made its $ 666 million estimate.

 Two of the documents already furnished to ASPA were delivered with redactions. In his affidavit, Edward J. Weiler, the IRS official who supervised the production of documents to ASPA, explained the redactions as follows:

 
The portion of these documents that were deleted contain guidance to revenue agents. For example, some of the portions that contain criteria that should be used for examination case selection.

 Weiler Affidavit at para. 5. ASPA does not dispute Mr. Weiler's assertions. Rather, it argues that Mr. Weiler's representations do not meet the legal standard for exemption from FOIA.

 The IRS bases its decision to redact on FOIA Exemption 7:

 
This section does not apply to . . . records or information compiled for law enforcement purposes, but only to the extent that the production of such law enforcement records or information . . . would disclose techniques and procedures for law enforcement investigations and prosecutions, or would disclose guidelines for law enforcement investigations and prosecutions if such disclosure could reasonably be expected to risk circumvention of the law. . . .

 5 U.S.C. § 552(b) (7) (E). Material indicating the criteria IRS agents use to select returns for examination is certainly material the disclosure of which "could reasonably be expected to risk circumvention of the law." As ASPA well knows, IRS resources are limited. The agency cannot review every filed return. The government is forced to rely on the possibility of audit to ensure compliance. If taxpayers were able to gain access to the IRS's selection criteria, and to ...


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