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Tax Analysts v. Internal Revenue Service

August 27, 2002


The opinion of the court was delivered by: Ricardo M. Urbina, United States District Judge.

Document Nos.: 10, 12, 13, 14, 15, 16



This matter comes before the court on the parties' cross-motions for summary judgment. Tax Analysts ("the plaintiff" or "TA"), a nonprofit corporation, brings this action under the Freedom of Information Act ("FOIA"), 5 U.S.C. § 552, and Internal Revenue Code ("IRC") § 6110, codified at 26 U.S.C. § 6110. The plaintiff seeks access to federal tax records held by the United States Internal Revenue Service ("the defendant" or "IRS"). The plaintiff claims that the IRS must disclose letter rulings that deny an organization's application for tax-exempt status or that revoke such status. The defendant counters that such records are confidential and are not subject to FOIA's mandatory disclosure requirements. The court concludes that the letter rulings are confidential and that the defendant does not have to disclose them. Accordingly, the court grants the defendant's motion for summary judgment and denies the plaintiff's motion for summary judgment.


TA is a nonprofit corporation that publishes and disseminates information concerning "the enactment and administration of the tax laws of the United States, the several states and other countries, the adjudication of tax cases by courts and other tribunals . . . and other subjects relating to taxation." Compl. at 2. On March 14, 2000, TA submitted a request to the IRS for access to all letter rulings issued in 1997, 1998, and 1999 by which the IRS denied any organization's application for tax exempt, or exempt organization ("EO") status ("EO denial rulings") or revoked such status ("EO revocation rulings"). Id. TA claims that the IRS's failure to timely respond constituted a de facto denial of its request. Id. at 3. On April 13, 2000, TA appealed this denial to the Commissioner of Internal Revenue. Id. TA revised its request on August 10, 2000, limiting it to "a described, identifiable sample of six EO denial rulings and six EO revocation rulings . . . ." Id. The IRS denied the revised request one month later. Id.

TA contends that the IRS must disclose the letter rulings under FOIA because they constitute "final opinions in administrative adjudications and interpretations of the tax law adopted by [the] IRS . . . ." Pl.'s Mot. for Summ. J. at 2. TA claims that an EO denial or revocation ruling is an opinion because it "explains the final disposition" of "an agency process for the formulation of an order." Id. at 8. TA asserts that such rulings are issued in administrative cases, which are "the only kind of 'cases' that [FOIA] refers to." Id. TA also alleges that the letter rulings are interpretations of the federal tax laws, including IRC § 501(c), which concerns tax-exempt organizations. Id. at 9-10.

In the alternative, TA claims that the ruling letters qualify as "written determinations" and thus the IRS must disclose them under IRC § 6110. *fn1 Compl. at 4. TA claims that "written determinations" are "rulings" and "determination letters," which include EO denial and revocation rulings. Pl.'s Mot. for Summ. J. at 1.

In its motion for summary judgment, the IRS contends that it can withhold the letter rulings because they are "return information" under Section 6103, which is an exception to FOIA.*fn2 Def.'s Mot. for Summ. J. at 14. The IRS argues that because FOIA does not apply, the documents could only be disclosed under IRC §§ 6110 or 6104. Id. at 4. The IRS insists that EO denial and revocation rulings are not written determinations under Section 6110. Id. at 7. The IRS further argues that the letter rulings do not deal with an organization that is exempt from taxation under Section 6104. Id. at 4. Thus, the IRS maintains that the records are confidential under Section 6103's "return information" provision and that it need not disclose the records to the public. Id. at 9. The IRS also declares that the U.S. Department of the Treasury regulations specifically mandate that Sections 6110 and 6104 do not apply to EO revocation or denial rulings. Id. (citing Treas. Reg. § 301.6110-1(a)). Consequently, the IRS urges the court to defer to the Treasury Department's interpretation of the IRC because of "the complexity of the taxing statutes, and the specific expertise which the Treasury Department generally brings to administering and interpreting them." Id. at 11.

The court now turns to the parties' cross-motions for summary judgment.


A. Legal Standards

1. Legal Standard for a Motion for Summary Judgment

Summary judgment is appropriate when "the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law." FED. R. CIV. P. 56(c); see also Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986); Diamond v. Atwood, 43 F.3d 1538, 1540 (D.C. Cir. 1995). To determine which facts are "material," a court must look to the substantive law on which each claim rests. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). A "genuine issue" is one whose ...

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