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Tax Analysts v. Internal Revenue Service

September 26, 2005


The opinion of the court was delivered by: Emmet G. Sullivan United States District Judge


Plaintiff Tax Analysts, a nonprofit corporation dedicated to the publication and dissemination to the public of information concerning the tax laws of the United States, brings this action seeking disclosure of certain documents (known as "Chief Counsel advice memoranda" or "CCA") prepared by the Internal Revenue Service Office of Chief Counsel ("OCC") concerning cases pending in United States Tax Court. Plaintiff's complaint stems from the Service's recent decision to withhold such documents in their entirety, in contrast to its prior policy of separating and disclosing the portions discussing general applications of the U.S. tax law (referred to by plaintiff as "agency working law"). See Compl. ¶ 12. Plaintiff argues that the new policy violates the Internal Revenue Code's general rule, codified at 26 U.S.C. § 6110, requiring the text of IRS "written determinations" to be open to public inspection. See 26 U.S.C. § 6110(a).

Pending before the Court are the parties' cross-motions for summary judgment. Upon careful consideration of the motions, the responses and replies thereto, as well as the governing statutory and case law, and an in camera inspection of the documents at issue in this case, the Court is persuaded that the documents are protected in full by the attorney work product doctrine, as incorporated by FOIA Exemption 5 and 26 U.S.C. § 6110. Accordingly, the Court will GRANT defendant's motion for summary judgment, DENY plaintiff's motion, and order the Clerk to DISMISS plaintiff's complaint with prejudice.


Chief Counsel advice memoranda ("CCA") are documents prepared by attorneys in the IRS Office of Chief Counsel ("OCC") in response to requests from IRS field offices for guidance on legal interpretations and IRS policy with respect to provisions of the tax laws.*fn1 In general, and subject to certain exceptions, the IRS is required to keep its "written determinations," including CCA, available for public inspection.*fn2 See 26 U.S.C. § 6110. The Code provides certain exemptions from disclosure, see U.S.C. § 6110(c), and specifically provides the Secretary with discretion to delete material from CCA in accordance with the exemptions available under the Freedom of Information Act ("FOIA")(5 U.S.C. § 552(b) and (c)).*fn3 26 U.S.C. § 6110(i)(3).

Prior to July 2003, the IRS processed CCA for public dissemination in accordance with Chief Counsel Notice No. CC-2002-026 (May 16, 2002) (the "2002 Notice"). This guidance document instructed employees that they may withhold information protected by FOIA, including attorney work product, but specifically noted that "the attorney work product doctrine in a CCA does not ... include general discussions of the law, including the application of those legal principles to the particular facts of the case that is the subject of the CCA." Id. at 9 (emphasis added). Under this policy, the IRS would regularly separate and release "agency working law" from protected attorney work product when responding to requests for disclosure of docketed case CCA. See Pl's. Opp'n at 3.

In July 2003, OCC changed its interpretation of the scope of the attorney work product doctrine as it applied to the dissemination of CCA. See Chief Counsel Notice No. 2003-022 (July 1, 2003)(the "2003 Notice") (noting that attorney work product in CCA "may include general discussions of the law").*fn4 In accordance with the new policy, the IRS began withholding CCA in their entirety whenever it determined that the documents were prepared with a "litigation predicate."*fn5 See Tate Decl. ¶ 3.

Between September 16, 2003 and January 21, 2004, Tax Analysts filed four requests under 26 U.S.C. § 6110(i) & (f)(4), and alternatively under FOIA, for the texts of all CCA memos withheld from disclosure pursuant to the 2003 Chief Counsel Notice. See Def's. Statement of Facts at 3. The IRS identified five CCA responsive to plaintiff's request, reviewed each of the CCA for reasonably segregable nonexempt material, and ultimately decided to withhold each of the CCA in full pursuant to the work product doctrine, as incorporated by 26 U.S.C. § 6110(i)(3) and FOIA Exemption 5 (5 U.S.C. § 552(b)(5)). See Tate Decl. ¶ 3 (noting that each CCA was "prepared during pending litigation that was docketed in the United States Tax Court, addressing a matter that is at issue in that litigation"). The IRS identified seven additional related documents -- five two-page "check sheets," one pertaining to each CCA, and two "harm memos," one each with respect to the CCA dated June 30 and July 1, 2003.*fn6 The agency withheld certain elements of "taxpayer identity" from each of these related documents pursuant to FOIA exemption 3 (5 U.S.C. § 552(b)(3)) in conjunction with IRC § 6103(a).

On June 25, 2004, following the completion of administrative proceedings, Tax Analysts filed a complaint in this Court seeking an order:

* under § 6110(f)(4)(A) requiring the IRS to open for public inspection, and cease to withhold from all CCA withheld in their entirety pursuant to Notice 2003-022, (a) discussions of the tax law generally, (b) applications of legal principles to particular facts, (c) legal interpretations of any revenue provision as "revenue provision" is defined in § 6110(i)(1)(B), (d) statements of any IRS or OCC position or policy concerning any such revenue provision, and (e) any legal interpretation of any state, foreign, or other federal law relating to taxation; and

* under 5 U.S.C. § 552(a)(4)(B) [FOIA] enjoining IRS from withholding from public disclosure (a) case control numbers, case control names, and taxpayer addresses from check sheets prepared for CCA withheld under Notice 2003-022 ["check sheets"]; and (b) memos discussing privilege(s) claimed with respect to, and harm that might result from disclosure of, CCA withheld from public disclosure pursuant to Notice 2003-022 ["harm memos"].

Compl. ¶¶ 33-34.

In December 2004, defendant submitted for the Court's in camera inspection unredacted copies of each withheld document. The parties' cross-motions ...

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