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Tax Analysts and IRS Settle Suit Over Access to OPR Decisions

Posted on July 14, 2021

The IRS will regularly post final decisions in Office of Professional Responsibility misconduct cases under a settlement reached with Tax Analysts, which had sued the agency for not making the decisions public.

Redacted versions of decisions issued after January 1, 2021, will be posted on the IRS website “as soon as reasonably practicable after that Decision becomes final and, in any event, no later than one year thereafter,” according to a stipulation of dismissal signed July 8 by Judge Trevor N. McFadden of the U.S. District Court for the District of Columbia.

The settlement resolves a Freedom of Information Act lawsuit that Tax Analysts brought against the IRS in May 2020 over a lack of transparency in OPR’s sanctions process. OPR is responsible for administering and enforcing the Circular 230 rules governing practice before the IRS. The lawsuit prompted the IRS to take steps to restore public access to final decisions issued in OPR disciplinary proceedings, which the agency had been routinely publishing until the end of 2014.

“I am pleased with the resolution of this case,” said Tax Analysts President and CEO Cara Griffith. “Decisions that come from disciplinary proceedings brought by the Office of Professional Responsibility should be made publicly available. It is important for those in tax practice and the public to see how the IRS is administering the Circular 230 rules on practitioner misconduct.”

FOIA Suit

In its complaint to the district court, Tax Analysts asserted that the IRS had failed to comply with 5 U.S.C. section 552(a)(2) by not posting final OPR decisions on its website as a matter of course.

That FOIA provision states that agencies “shall make available for public inspection in an electronic format . . . final opinions, including concurring and dissenting opinions, as well as orders, made in the adjudication of cases.”

Disciplinary proceedings brought by OPR for alleged practitioner violations of Circular 230 are adjudicated by an administrative law judge, who issues a decision that is considered a final agency decision unless it is appealed to Treasury’s appellate authority within 30 days.

Under section 10.72(d)(1) of Circular 230, all final decisions of an ALJ and the appellate authority are “public and open to inspection,” subject to protective measures set out in section 10.72(d)(4). 

Final OPR decisions were published on the IRS website from 2007 until December 2014, when the Office of Chief Counsel warned OPR that posting them might constitute disclosure of return information subject to IRC section 6103 protections. In response to those concerns, OPR removed all final decisions from the IRS website.

Karen Hawkins, who was OPR director from April 2009 to July 2015 and is now a Tax Analysts board member, said in October 2015 that the IRS’s intent had been to repost the decisions after they were redacted to address the section 6103 concerns.

In a March 2019 FOIA request to the IRS, Tax Analysts sought copies of all final OPR decisions issued since 2015 and asked that it repost the 2007-2014 decisions that had been removed from the website. The IRS provided the post-2015 decisions but denied the request to repost the pre-2015 decisions, asserting that FOIA “does not provide a means to request the agency to post an item on the website under 5 U.S.C. section 552(a)(2).”

Tax Analysts argued in its district court complaint that under 5 U.S.C. section 552(a)(2), it has a statutory right of access in electronic format to final OPR decisions. “There is no legal basis for IRS to deny such access,” the complaint said. “Tax Analysts has no remedy at law and will suffer irreparable injury absent relief from this Court.”

Blackout Ended

In response to the lawsuit, the IRS posted on its website the post-2015 final decisions that had been provided to Tax Analysts. The agency has posted additional decisions in several updates to the website.

All decisions have been redacted to protect private taxpayer and other third-party information as required by Circular 230, section 6103, and FOIA.

Under the stipulation of dismissal, the parties agree that the IRS will post the remaining post-2015 final decision within 60 days of the date the stipulation was approved by the court. The IRS is still making the necessary redactions to that decision.

The stipulation provides that for final decisions issued after January 1, 2021, the IRS will post them “as soon as reasonably practicable” or no later than one year after they became final. The time period excludes federal government shutdowns or other office closures because of pressing circumstances that interrupt the operations of the IRS office reviewing and posting OPR decisions.

The stipulation states that the IRS will redact and repost within five years the final decisions that were removed from its website in late 2014.

Hawkins told Tax Notes that “while it is always a positive outcome when the IRS acquiesces to more transparency, it’s a shame that they fight tooth and nail beforehand.”

“The agency has given up very little by agreeing to disclose [final decisions] issued since January 2015, because there have been no decisions of any consequence since then,” Hawkins added. “Dragging their feet on the pre-2015 [final decisions] has no rational justification and deprives the practitioner community of some of the more relevant cases decided and analysis done under Circular 230 for another five years. I hope Tax Analysts intends to monitor to ensure the IRS adheres to its commitments.”

In Tax Analysts v. IRS, No. 1:20-cv-01268 (D.D.C. 2021), Tax Analysts was represented by Cornish F. Hitchcock of Hitchcock Law Firm PLLC.

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