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March 16, 1999


The opinion of the court was delivered by: Hogan, District Judge.


Pending before the Court are Plaintiffs and Defendant's Cross-Motions for Summary Judgment. The issue before the Court is whether the plaintiff, Tax Analysts ("TA"), is entitled to enjoin the Internal Revenue Service ("IRS" or "Defendant") from withholding documents requested under the Freedom of Information Act (FOIA). Upon consideration of the parties' pleadings and statements at oral argument, the Court will grant Defendant's Motion for Summary Judgment and deny Plaintiffs Motion for Summary Judgment.


TA is a nonprofit corporation organized under the laws of the District of Columbia. TA's primary activities include publishing a variety of tax publications and disseminating tax information to the general public.*fn1 In pursuing these objectives, TA argues for the public availability of documents and materials relating to the administration of the tax laws by all United States agencies. On November 10, 1993, pursuant to FOIA, TA requested from the IRS copies of all "closing agreements" *fn2 relating to organizations exempt from federal income tax executed on or after December 31, 1992.

After the IRS failed to respond to TA's initial request, TA filed an administrative appeal based upon the constructive denial of its claim. The IRS denied TA's appeal, claiming that disclosure of the closing agreements was prohibited by 26 U.S.C. § 6103 (a). TA then brought this FOIA claim before this Court, seeking an injunction to compel the IRS to produce for inspection and copying all of the previously requested closing agreements. Both TA and the IRS have moved for summary judgment pursuant to Fed.R.Civ.P. 56(c).


Summary judgment is appropriate only if there is no genuine issue of material fact and the moving party is entitled to judgment as a matter of law. See Fed.R.Civ.P. 56; Celotex Corp. v. Catrett, 477 U.S. 317, 322, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). In considering a motion for summary judgment, the "evidence of the non-movant is to be believed, and all justifiable inferences are to be drawn in his favor." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). There is a genuine issue of material fact only if there is such evidence that a reasonable jury could return a verdict for the nonmoving party; a fact is material only if it might affect the outcome of the suit under applicable law. See id. at 248, 106 S.Ct. 2505.


Tax returns and return information are generally not subject to public disclosure. See I.R.C. § 6103(a). In the case of tax-exempt organizations, however, Congress has provided a limited exception to § 6103's confidentiality rule. See I.R.C. § 6104(a)(1)(A). Section 6104(a)(1)(A) provides:

  If an organization described in section
  501(c) or (d) is exempt from taxation
  under section 501(a) for any taxable
  year, the application filed by the organization
  with respect to which the Secretary made his
  determination that such organization was entitled to exemption
  under section 501(a), together with any
  paper submitted in support of such application,
  and any other letter or document issued by the IRS with
  respect to such application shall be open to public

Id. (emphasis added). The Treasury regulation interpreting § 6104(a)(1)(A) takes the words "any papers submitted in support of such application" to mean "any statement or document . . . that is submitted by an organization in support of its application." See 26 C.F.R. § 301.6104 (a)-1(e). Thus, as the D.C. Circuit noted in Lehrfeld v. Richardson, papers submitted by "anyone other than the applicant itself in support of its application for tax-exempt status need not be disclosed." 132 F.3d 1463, 1464 (D.C.Cir. 1998).

Plaintiffs claim arises under the FOIA, 5 U.S.C. § 552, which provides a rule of general disclosure by government agencies upon request. Mandatory disclosure enables the public to gain access to government information so that it can review the government's performance of its statutory duties, thereby promoting government honesty. See EPA v. Mink, 410 U.S. 73, 79-80, 93 S.Ct. 827, 35 L.Ed.2d 119 (1973). Accordingly, district courts have the authority to enjoin an agency from withholding agency records and to order the production of agency records where the agency improperly withholds them*fn3 See United States Dep't of Justice v. Tax Analysts, 492 U.S. 136, 141, 109 S.Ct. 2841, 106 L.Ed.2d 112 (1989). However, an agency may withhold agency records which fall under one of the nine enumerated exemptions to the FOIA. See 5 U.S.C. § 552 (b). The government has the burden to justify its withholding of documents pursuant to one or more of these exemptions. See Katz v. National Archives & Records Admin., 862 F. Supp. 476, 478 (D.D.C. 1994).

In this case, Defendant, a government agency, invoked the FOIA exception set forth in 5 U.S.C. § 552 (b)(3). Section 552(b)(3) states that an agency need not disclose records specifically exempted from disclosure by statute, provided that such statute (1) requires withholding information from the public in "such a manner as to leave no discretion on the issue," or (2) establishes particular criteria for withholding or refers to particular types of matters to be withheld. See 5 U.S.C. § 552 (b)(3). Defendant asserts that I.R.C. § 6103(a), which governs confidentiality and disclosure of returns and return information, bars Plaintiffs FOIA claim. Thus, two matters are before the Court. First, whether the closing agreements contain return information under § 6103. If they contain return information, then § 6103 generally bars their disclosure.*fn4 Second, whether the closing agreements requested by Plaintiff ...

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