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Judicial Watch, Inc. v. Internal Revenue Service

United States District Court, District of Columbia

July 3, 2015



Emmet G. Sullivan United States District Judge

Judicial Watch requested information from the Internal Revenue Service (“IRS”) under the Freedom of Information Act (“FOIA”), 5 U.S.C. § 552. The IRS conducted what it considers to have been a reasonable search in response to that request, but found no responsive records. The IRS therefore moves for summary judgment, arguing that it has discharged its FOIA responsibilities. Judicial Watch opposes this motion and proposes ways in which the IRS could have conducted a more appropriate search. Upon consideration of the motion, the response and reply thereto, the applicable law, and the entire record, the Court GRANTS the motion for summary judgment.

I. Background

A. The May 22, 2013 FOIA Request and this Lawsuit.

On May 22, 2013, Judicial Watch submitted to the IRS a FOIA request for:

Any and all records and communications concerning, regarding, or related to the selection of individuals for audit based on information contained in 501(c)(4) tax exempt applications.

Compl., ECF No. 1 ¶ 5. “The time frame of the request was identified as being ‘January 1, 2010 to the present.’” Id.

On June 25, 2013, the IRS acknowledged that it had received the request and advised that it would be unable to finish processing the request on time and therefore had “‘extended the response date to August 16, 2013.’” Id. ¶ 6. An August 13, 2013 letter from the IRS indicated that the IRS required additional time and would contact Judicial Watch by September 27, 2013 if it remained unable to complete processing of the request. See Id. ¶ 7. Having received no further response, Judicial Watch filed suit on November 8, 2013. See Id. ¶ 8.

After the case was filed, the parties submitted a series of status reports. See Meet and Confer Report, ECF No. 11; Status Report, ECF No. 12. On August 6, 2014, they filed a joint status report indicating that the IRS believed that “it had conducted a reasonable search which did not locate any responsive records, ” while Judicial Watch felt that “there is a genuine issue of material fact regarding whether the Service has satisfied its obligations.” Status Report, ECF No. 18 at 1. At the parties’ request, the Court set a schedule for the briefing of a motion for summary judgment. See Minute Order of August 6, 2014.

On September 22, 2014, the IRS filed its motion for summary judgment. See Mot. for Summ. J. (“Mot.”), ECF No. 19. The IRS also submitted a statement of facts in support of that motion. See IRS Statement of Facts (“Def.’s SMF”), ECF No. 19-1. On October 22, 2014, Judicial Watch filed its opposition to the motion for summary judgment along with a response to the IRS’s statement of facts. See Opp. to Mot. (“Opp.”), ECF No. 20; Judicial Watch Statement of Facts (“Pl.’s SMF”), ECF No. 20-1. On November 21, 2014, the IRS filed a reply brief, along with a brief response to Judicial Watch’s statement of facts. See Reply in Supp. of Mot. (“Reply”), ECF No. 23; IRS Reply SMF, ECF No. 23-1. The IRS’s motion is ripe for adjudication.

B. Organization of the IRS.

To understand the search conducted by the IRS in response to Judicial Watch’s FOIA request, it is necessary to describe the structure of the IRS. The IRS “is mainly organized around four distinct operating divisions.” Def.’s SMF ¶ 2; Pl.’s SMF ¶ 2. These divisions are: (1) the Wage and Investment Division, which “serves individual taxpayers . . . with wage and investment income only”; (2) the Small Business/Self-Employed Division, which focuses on taxpayers that are either small businesses or self-employed; (3) the Large & Mid-Size Business Division, which works with “corporations with assets greater than $10 million” as well as business and individuals with certain international focuses; and (4) the Tax Exempt and Government Entities Division, which “serves three distinct taxpayer segments: Employee Plans, Exempt Organizations, and Government Entities.” Def.’s SMF ¶¶ 3–7; Pl.’s SMF ¶¶ 3–7.

“All applications for tax exempt status” under Section 501(c)(4), “are processed by the Rulings and Agreements Office within the Exempt Organizations Unit of [the Tax Exempt and Government Entities Division].” Def.’s SMF ¶ 8; Pl.’s SMF ¶ 8. The Tax Exempt and Government Entities Division does not conduct any audits of individuals, however. See Def.’s SMF ¶ 9; Pl.’s SMF ¶ 9. Individual audits are conducted by one of the three other divisions. See Def.’s SMF ¶ 10; Pl.’s SMF ¶ 10. Naturally, then, if information on a 501(c)(4) application caused the Tax Exempt and Government Entities Division to think that an individual audit was warranted, the Division would need to refer the individual to another division for such an audit. See Def.’s SMF ¶ 35, 50, 68, 86; Declaration of Dagoberto Gonzalez (“Gonzalez Decl.”), ECF No. 19-3 ¶ 6; ...

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