IN THE UNITED STATES DISTRICT COURT FOR THE
DISTRICT OF COLUMBIA
STIPULATED ORDER OF FINAL JUDGMENT
The plaintiff, Tax Analysts, and the defendant, the Internal Revenue Service, by and through their undersigned counsel, stipulate and agree that:
BACKGROUND
1. This is an action in which Tax Analysts seeks access under 26 U.S.C. section 6110 to certain documents maintained by the Service; section 6110 requires public disclosure of "any written determination" made by the Service, as prescribed in that section.
2. On July 24, 2007, the Court of Appeals affirmed the Court's February 26, 2006, Order ordering release of the documents. Tax Analysts v. IRS, 495 F.3d 676 (D.C. Cir. 2007), aff'g 419 F.Supp. 116 (D.D.C. 2006). The documents consist of "e-mails containing legal advice that lawyers in the IRS Office of Chief Counsel ("OCC") sent to IRS field personnel." Id. at 677. This Court ruled, and the Court of Appeals agreed, that the documents constitute "Chief Counsel Advice" ("CCA") that are subject to disclosure under 26 U.S.C. section 6110, rejecting the Service's interpretation that CCA prepared in two hours or less are not covered by section 6110.
3. Following the Court of Appeals' decision, the parties entered into discussions intended to lead to the filing of a proposed final judgment order.
4. The CCA covered by the judgment in this case ("e-mailed CCA") fall into several different categories, each of which consists of non-taxpayer-specific e-mailed CCA and taxpayer-specific e-mailed CCA. The first category consists of e-mailed CCA that were compiled in hard copy format between approximately April 2004 (following IRS' receipt of tax Analysts' document request) and December 2007. This compilation took place pursuant to the instruction, set forth in Chief Counsel Directive Manual ("CCDM") § 33.1.2.1, that Associate Office attorneys should forward documentation of their informal advice (including e-mailed advice) to the Technical Services Branch, Legal Processing Division, Procedure & Administration. The first installment of the non-taxpayer-specific e-mailed CCA that fell into this category was provided to Tax Analysts on December 19, 2007. A second installment of the non-taxpayer-specific e-mailed CCA sent between September 1, 2007, and December 7, 2007, which was recently discovered, was provided to Tax Analysts on or about March 20, 2009. A package of taxpayer-specific e-mailed CCA that the OCC had located, in hard copy format, during the April 2004 -- September 2007 time period was sent to Tax Analysts on May 30, 2008, following compliance with the statutory requirement that the OCC send out the Notice of Intention to Disclose to affected taxpayers.
5. The second category of e-mailed CCA consists of records compiled pursuant to Chief Counsel Notice CC-2008-002, which was issued on December 7, 2007, and required the retention of e-mailed CCA that was generated after the date of that Notice, pending the development of procedures on a "going forward" basis for processing e-mailed CCA. See http://www.irs.gov/pub/irs-ccdm/cc-2008-002.pdf. Non-taxpayer specific e-mailed CCA generated pursuant to that order were made available to Tax Analysts on October 1, 2008. A package of taxpayer-specific e-mailed CCA generated pursuant to that Notice was made available to Tax Analysts on December 12, 2008.
6. Because the OCC had no centralized place where e-mailed CCA were segregated within their e-mail system, the OCC initiated the development of two separate processes simultaneously in order to comply more broadly with the Court's February 26, 2006, Order. First, the OCC developed an in-house program that would enable the processing of e-mailed CCA on a "going forward" basis, by adapting for these e-mailed CCA the automated systems currently in place for making other written determinations subject to section 6110 available to the public. Second, the OCC also began exploration of a "look back" program that would enable the OCC to systematically identify and extract e-mailed CCA generated in 2007 and earlier years, which would then have to be processed for public inspection consistent with section 6110.
7. The OCC implemented an in-house program that allows it to process e-mailed CCA on a "going-forward" basis. This program is an add-on feature to the Outlook e-mail system used in the OCC that captures e-mail messages that may constitute CCA, and then adapts for these e-mailed CCA the automated systems currently in place for making other written determinations subject to section 6110 available to the public. The OCC has trained its National Office attorneys in the use of this program. The OCC placed the "going forward" program into full production on July 1, 2008. Since that date, the OCC has implemented the new program to capture e-mailed CCA and process that CCA in accordance with section 6110, which it has begun disclosing. The details of that program are explained in an OCC PowerPoint training deck, attached as Exhibit 1 and incorporated into this Order. The OCC continues to work on making refinements and improvements to the program.
8. Simultaneously, the parties discussed the processing of CCA on a "look back" basis. The Service and the OCC have devoted substantial resources to determining the technical, logistical, and personnel requirements for processing e-mailed CCA from this "look-back" period. This effort focused on retrieving, reviewing, and processing e-mails from back-up tapes for one server (out of 8) for a single year (2007). The parties discussed the results of that analysis, as well as procedures for allowing Tax Analysts to review the CCA that would be made public as a result of the current "look back" review.
AGREEMENT OF THE PARTIES
9. The OCC shall continue to produce e-mailed CCA under the "going forward" procedures described in this Order.
10. Tax Analysts shall forego access to e-mailed CCA sent prior to July 1, 2008, except for:
a. E-mailed CCA collected under the provisions of CC Notice 2008-002 that have already been produced;
b. E-mailed CCA collected under the provisions of CCDM § 33.1.2.1 that have already been produced;
c. Non-taxpayer specific e-mailed CCA from the 2007 back-up tapes for one server that have already been produced; and
d. Taxpayer-specific e-mailed CCA from the 2007 back-up tapes for one server, which will be produced 90 days after Notice of Intention to Disclose is sent to those taxpayers that can be located;
11. The OCC shall make available for public inspection any CC Notices, CCDM provisions or instructions to staff that would affect the process for disclosure of e-mailed CCA under the "going forward" process described in this Order at www.irs.gov/foia, upon issuance of such Notices, CCDM provisions, or instructions to staff.
12. The Service and OCC shall promptly advise Tax Analysts of the existence of any legislation proposed by the Executive Branch, recommendations proposed by the Department of Treasury, or recommendations issued by the Service and approved by the Department of Treasury that would alter or change the disclosure obligations with respect to e-mailed CCA under 26 U.S.C. section 6110 and this Order.
13. The OCC shall issue an annual report on March 31st following the close of each calendar year concerning the number of e-mailed CCA processed. The report shall include:
a. The total number of e-mailed CCA sent generated during the calendar year, i.e., those determined to be CCA by the OCC pursuant to the procedures in Exhibit 1;
b. The total number of these e-mailed CCA excluded from disclosure because the e-mail concerns:
i. A criminal investigation;
ii. A jeopardy or termination assessment;
iii. A civil fraud investigation;
iv. Any matter referred to in subparagraph (C) or (D) of 26 U.S.C. section 6103(b)(2);
v. Any matter to which section 6105 of the Internal Revenue Code applies;
c. The total number of these e-mailed CCA withheld in their entirety as privileged based on one or more of FOIA exemptions, including but not limited to the work product doctrine and the attorney-client privilege; and
d. The total number of these e-mailed CCA withheld because the taxpayer could not be identified or notified of the intention to disclose the e-mailed CCA relating to that taxpayer.
14. The Service shall pay over to Tax Analysts attorney's fees and costs pursuant to 26 U.S.C. section 6110(f)(4)(A) in the amount of $ 210,000.
15. Tax Analysts shall not seek disclosure of or assist other parties (e.g., by providing financial assistance or otherwise) in seeking disclosure of the e-mailed CCA not disclosed under this final judgment order.
16. The Court shall retain jurisdiction to enforce the provisions of this Order.
SO ORDERED:
DATED: March 25, 2009.
United States District Judge