TAX ANALYSTS
6830 North Fairfax Drive
Arlington, VA 22213,
Plaintiff,
v.
INTERNAL REVENUE SERVICE
1111 Constitution Avenue, NW,
Washington, DC 20224,
Defendant.
UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLUMBIA
GREENE, J. HHG
COMPLAINT FOR ACCESS TO RECORDS
1. This is an action under the Freedom of Information Act ("FOIA"), 5 U.S.C. § 552, for access to and copies of records of the United States Internal Revenue Service ("IRS").
Jurisdiction
2. This court has jurisdiction of this action under 5 U.S.C. § 552(a)(4)(B) and 28 U.S.C. § 1331.
Parties
3. Plaintiff Tax Analysts ("TA") is a nonprofit corporation organized and existing under the laws of the District of Columbia and is qualified as a charitable and educational organization under Int. Rev. Code § 501(c)(3). TA's primary function is the publication and dissemination to all interested persons of news and other information concerning the enactment and administration of the laws of the United States and the several states and the adjudication of cases by courts and other tribunals of the United States and the several states, with emphasis on matters relating to taxation.
4. Defendant IRS is an agency of the United States government within the meaning of 5 U.S.C. § 552(a)(2), (3) and (4)(B).
Claims for Relief
5. On December 14, 1993, TA asked IRS under the federal Freedom of Information Act ("FOIA") for copies of all IRS Field Service Memoranda ("FSAs") issued by the Field Service Division of IRS' Office of Chief Counsel since January 1, 1992 (Ex. 1).
6. On January 10, 1994, TA appealed the de facto denial of its FOIA request for FSAs (Ex. 2).
7. On February 1, 1994, TA asked IRS under the FOIA for copies of all FSAs issued by the Exempt Organizations Division and the International Division of IRS' Office of Chief Counsel since January 1, 1992, and also for memoranda or other written records of any informal oral or telephonic FSA's issued by any of the divisions of IRS' Office of Chief Counsel since January 1, 1992 (Ex. 3).
8. On February 7, 1994, IRS denied TA's appeal of January 10, 1994 (Ex. 4).
9. On March 2, 1994, TA appealed IRS' de facto denial of TA's request of February 1, 1994 (¶ 7) (Ex. 5).
10. On March 30, 1994, IRS denied TA's appeal of March 2, 1994 (Ex. 6).
11. FSAs are opinions or advice on issues of law, issued by IRS' National Office of Chief Counsel in response to requests from IRS field attorneys, revenue agents and appeals officers ("field personnel").
12. IRS requires field personnel to seek National Office legal advice or opinions on significant issues in large cases, or where the legal issues in a case are not free from doubt, or where the issues in a case are potentially important to overall tax administration. Such advice or opinion can take the form of Technical Advice Memoranda (TAMs), Technical Assistance, or FSAs.
13. FSAs and TAMs generally serve the same function. FSAs and TAMs that favor IRS' position are authoritative on the issue in question. TAMs that favor a taxpayer's position are binding on IRS, while FSAs that favor a taxpayer's position are not.
14. Taxpayers have the right to participate in the TAM process. TAMs are disclosable to the public. IRS gives taxpayers no opportunity to participate in the FSA process. IRS takes the position that FSAs are not disclosable to the public.
15. Since January 1, 1992, IRS largely has substituted FSAs for TAMs, which until then had been the primary vehicle for providing IRS National Office of Chief Counsel legal advice to IRS field personnel.
16. On information and belief, IRS is supplanting the TAM procedure with the FSA procedure in order to avoid taxpayer participation in the issuance of legal opinions and advice that is dispositive of administrative decisions in taxpaper examinations and appeals, and in order to avoid public disclosure of such opinions and advice, which when embodied in TAMs is required by Int. Rev. Code § 6110(b)(1).
17. IRS considers and treats FSAs as authoritative statements of the law to be applied to particular cases, and FSAs are followed by IRS field personnel in the examination and appeal stages of a controversy between the IRS and a taxpayer. An FSA issued in the case will normally control the reasoning and result in a TAM that a taxpayer might later request in the same case.
18. As alleged in ¶ 17, FSAs are final opinions issued by IRS in the process of adjudicating cases, within the meaning of 5 U.S.C. § 552(a)(2)(A).
19. A main function of FSAs is to promote uniformity in the legal positions asserted in tax litigation by IRS. FSAs are filed in the National Office and are available for reference by Office of Chief Counsel attorneys and personnel in the Office of Assistant Commissioner, Technical, in their preparation of private letter rulings, TAMs, IRS General Counsel Memoranda ("GCM's), Actions on Decisions ("ADs"), Revenue Rulings, IRS positions in litigation with taxpayers, and other FSAs.
20. As alleged in ¶ 19, FSAs are statements of policy or interpretations adopted by IRS, or both, within the meaning of 5 U.S.C. § 552(a)(2)(B). Unless disclosed to the public under FOIA, FSAs will comprise a body of IRS secret law, as private letter rulings, GCMs, ADs and TAMs once did, before their disclosure was required under the FOIA and Int. Rev. Code § 6110.
21. To the extent that IRS field personnel rely on and follow FSAs issued in particular cases, FSAs affect members of the public. Unless disclosed to the public and indexed, or disclosed to the affected taxpayer, IRS and IRS field personnel are prohibited by law, 5 U.S.C. § 552(a)(2), from relying on FSAs in ruling against taxpayers in examinations or appeals.
22. The records requested are agency records of IRS, which IRS has improperly withheld the records from TA. TA has exhausted its administrative remedies.
Relief Requested
23. TA requests that this court
(a) order IRS to make the records requested available for inspection and copying by TA pursuant to 5 U.S.C. § 552(a)(2)(b),
(b) enjoin IRS from continuing to withhold the records requested, and
(c) award TA the attorney's fees and expenses incurred in prosecution of this case.
Respectfully submitted,
WILLIAM A. DOBROVIR
D.C. Bar No. 030148
65 Culpeper Street
Warrenton, VA 22186
(703) 341-2183
Attorney for Plaintiff
April 26, 1994