United States District Court, District of Columbia
ROSEMARY M. COLLYER United States District Judge.
Agrama is facing a $900, 000 tax penalty from the Internal
Revenue Service, allegedly based on an expert report prepared
by an Italian criminal prosecutor concerning her foreign
income. Ms. Agrama wants to know how IRS received the report
so that she can convince the Service that Italy violated her
rights and the report is inadmissible in the United States.
Thus, she submitted a FOIA request asking, in part, for
records from any country outside the U.S. contained in her
IRS file. None of the records produced by IRS provides a
paper trail indicating how IRS agents in this country
received the Italian report. Ms. Agrama sues, arguing that
IRS conducted an inadequate search.
IRS and Ms. Agrama have moved for summary judgment,
contesting whether IRS fulfilled its FOIA obligations. Upon
review of the entire record, the Court will grant judgment in
favor of IRS.
Ms. Agrama's FOIA Request
On October 28, 2015, the IRS issued two (2) letters to [Jehan
Agrama] entitled “Failure to File Form 5471.”
These letters claim [she] had an obligation to file Forms
5471 regarding a foreign corporation, Byram Enterprises
Limited[, ] for the years 1982 through 2004. Moreover, these
letters propose continuation delinquency penalties . . . if
the subject returns are not filed . . . .
. . .
[Ms. Agrama] does not have an ownership interest in Byram
Enterprises Limited that would obligate her to file Forms
Complaint [Dkt 1] ¶¶ 5, 8.
sensible woman, Ms. Agrama would prefer to persuade IRS to
withdraw its intention to penalize her for unpaid taxes
rather than be required to pay the penalty and late taxes and
sue to recover her money. To this end, she submitted a
request on February 16, 2016 under the Freedom of Information
Act, 5 U.S.C. § 552 et seq., (2012) asking IRS
to release to her “each and every document (exclusive
of the filed tax [sic] income tax returns) contained in the
administrative files of the Internal Revenue Service relating
to Form 5471 proposed penalty liabilities of Jehan Agrama . .
. for taxable years 1982-2004.” Compl. Ex. C, FOIA
Disclosure Request (FOIA Request) [Dkt. 1-3] at 1. The
Request specifically sought records received “from any
jurisdiction, country, principality or other entity outside
the United States.” Id. ¶ 2. IRS received
the Request on February 18, 2016. Def.'s Mot. Summ. J.
(IRS MSJ) Ex. C, Declaration of Karen Coen (Coen Decl.) [Dkt.
10-3] ¶ 6.
the course of the administrative processing of Ms.
Agrama's FOIA request and this litigation, IRS has
conducted multiple searches for responsive records.
• First, IRS Disclosure Specialist Karen Coen searched
the IRS Integrated Data Retrieval System (IDRS), a database
allowing access to data retrieved from IRS's Master File,
the nationwide electronic information system containing
taxpayer account information. Id. ¶¶ 8, 9.
Ms. Coen used Ms. Agrama's unique taxpayer identification
number (TIN), provided by Ms. Agrama, to conduct this search.
Id. ¶¶ 10, 11. This initial search yielded
a single possible examination activity from 2002.
Id. ¶ 12. Inasmuch as this activity had
occurred more than ten years earlier, any records would have
been destroyed under the IRS record retention policy.
Id. Because Ms. Coen found no other entries related
to Ms. Agrama's TIN in the IDRS system, she determined
that IRS had no records responsive to Ms. Agrama's FOIA
request, and informed Ms. Agrama of that fact by letter on
February 25, 2016. Id. ¶¶ 12-13.
• Ms. Coen's letter prompted counsel for Ms. Agrama
to contact Ms. Coen on March 2, 2016, to inform her that Ms.
Agrama had already been contacted by two IRS Revenue Agents
from Los Angeles, California, Bernard Trapp and James Pack,
concerning the tax penalty. Id. ¶ 14. Upon Ms.
Coen's request, these two agents searched for records
that might be responsive to Ms. Agrama's FOIA request.
Id. They forwarded the records they located to Ms.
Coen, who determined that 89 pages of records were responsive
to Ms. Agrama's request. Id. ¶¶ 15-16.
Of those records, Ms. Coen determined that three pages could
be released to Ms. Agrama and the remaining 86 pages needed
to be withheld in full. Id. ¶ 16. Ms. Coen so
informed Ms. Agrama of this assessment on March 7, 2016.
Id. ¶ 18. This decision was upheld on
administrative appeal. Compl. Ex. G, IRS FOIA Appeals
Response [Dkt. 1-7].
• When Ms. Agrama filed the immediate Complaint in April
2016, Attorney Christopher Valvardi of the IRS Office of
Chief Counsel was assigned as agency counsel to work with the
Department of Justice on the case. IRS MSJ Ex. 4, Declaration
of Christopher Valvardi (Valvardi Decl.) [Dkt. 10-5] ¶
5. His DOJ colleague told Mr. Valvardi on August 25, 2016,
presumably based on information from Ms. Agrama's
counsel, that Ms. Agrama had possession of an 83-page
document known as the “Chersicla Report, ”
described by Ms. Agrama as “a ‘rough
translation' of a non-public Italian expert witness
report, ” Pl.'s Am. Reply [Dkt. 26] at 1, of
Italian origin for apparent use in Italian courts. Upon
inquiry by Mr. Valvardi, Revenue Agent Pack and Supervisory
Revenue Agent Steven Lepore confirmed that they had provided
the Chersicla Report to Ms. Agrama. Valvardi Decl.
¶ 8. When Mr. Valvardi received Ms. Agrama's copy of
the Chersicla Report, he determined that it was substantively
identical to 83 pages of the 86 pages that Ms. Coen had
earlier withheld from release to Ms. Agrama. Id. IRS
then withdrew its reliance on any FOIA exemption to withhold
those 83 pages and disclosed its version of the Chersicla
Report to Ms. Agrama on September 16, 2016. Id.
• Perhaps informed by this experience, Mr. Valvardi
undertook an independent review of the records that had been
provided by Agents Trapp and Pack to Ms. Coen. Id.
¶ 11. That review demonstrated that some of the records
were incomplete. Agent Pack was queried and explained that
some of the responsive records were commingled in a larger
file of records that was being reviewed as part of an
investigation into another taxpayer. Id.
• Mr. Valvardi asked Agent Pack to search the larger
file manually to identify fully any responsive records, which
he did. Id. Agent Pack sent 27 additional
potentially-responsive pages to Mr. Valvardi. Id.
¶ 12. After review on September 6, 2016, Mr. Valvardi
determined that the additional pages were responsive to Ms.
Agrama's request, but were all exempt from disclosure.
IRS identified a total of 116 pages of responsive records. Of
those pages, 86 have been released to Ms. Agrama in whole.
The remaining 30 pages, constituting four separate documents,
have been withheld in their entirety. IRS relies on FOIA
Exemptions 7(A) and 3 to assert that these records ...