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Tax Analysts Sues IRS Over Lack of Access to OPR Decisions

Posted on May 18, 2020

Tax Analysts has filed a Freedom of Information Act lawsuit against the IRS for not making public the final decisions issued in disciplinary proceedings brought by the Office of Professional Responsibility.

The complaint, filed May 13 in the U.S. District Court for the District of Columbia, asserts that the IRS has failed to comply with 5 U.S.C. section 552(a)(2) by not posting those 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.”

The dispute centers on the transparency of disciplinary proceedings brought by OPR, which is responsible for administering and enforcing the Circular 230 rules governing practice before the IRS. The proceedings 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). The provision allowing publication of OPR decisions was added by the 2007 amendments to Circular 230, and it was unchanged by the amendments made in 2014.

From late 2007 until December 2014, final OPR decisions were published on the IRS website. In 2014 the Office of Chief Counsel raised concerns with OPR that posting final decisions might constitute disclosure of “return information” subject to section 6103 protections. In light of those concerns, OPR removed all final decisions from the IRS website at the end of December 2014. Since then, no new decisions have been posted, and the earlier decisions are still unavailable on 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 intent had been to repost the decisions after they were redacted to address the section 6103 concerns.

Hawkins’s successor, Stephen Whitlock, said on a July 2017 webcast that OPR was still working on the redactions, but that the decisions would eventually be reposted. Four months later, Whitlock said that OPR was hoping for a legislative solution to the issue.

FOIA Request

Tax Analysts sent a FOIA request to the IRS in March 2019 asking for all final OPR decisions issued since the beginning of 2015, along with communications between OPR and chief counsel addressing the public release of the decisions.

The request also asked the IRS to repost the 2007-2014 decisions that had been removed from the website, noting that those decisions constitute “final opinions, including concurring and dissenting opinions, as well as orders, made in the adjudication of cases,” and thus must be made available in electronic format under 5 U.S.C. section 552(a)(2).

The IRS sent Tax Analysts decisions issued between 2015 and the end of 2017, along with three redacted memos analyzing whether the IRS is barred from publishing them because of the section 6103 taxpayer confidentiality provisions. Two of the memos — one dated October 31, 2014, and the other December 22, 2014 — were written by Teresa Trissell, a chief counsel attorney. The third, dated July 8, 2015, was written by Hawkins.

The Office of Chief Counsel essentially concluded that the IRS is barred from publishing the decisions because of the Supreme Court’s decision in Church of Scientology v. IRS484 U.S. 9 (1987), which held that “return information” from which personal identifiers had been deleted was still subject to section 6103 disclosure restrictions.

The IRS denied Tax Analysts’ request that it repost the pre-2015 OPR 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).”

The IRS reiterated that argument in a January 31 letter denying Tax Analysts’ administrative appeal, saying that FOIA “only provides a right to access documents and doesn’t provide for a right of services to be performed by an agency in response to a request.”

“Your remedy is access in a public reading room,” the IRS said.

OPR decisions aren’t available on the IRS’s online FOIA Library. The IRS publishes quarterly announcements in the Internal Revenue Bulletin that provide a list of disciplinary actions that OPR has taken against practitioners, but the details are limited — it gives only the practitioner’s name, city and state, the sanction, and the effective date of the sanction.

Lawsuit

In its complaint to the district court, Tax Analysts asserted 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 says. “Tax Analysts has no remedy at law and will suffer irreparable injury absent relief from this Court.”

The complaint adds that the IRS’s refusal to publish the decisions means that Tax Analysts would have to make individual requests under 5 U.S.C. section 552(a)(3) for access to OPR decisions for specific time periods, which it “would not have to do if IRS were to post Circular 230 decisions as a matter of course under FOIA subsection (a)(2).”

The complaint asks that the court declare that the IRS has failed to comply with 5 U.S.C. section 552 by not making OPR decisions available in electronic format, and that it permanently enjoin the agency from failing to publish the decisions that had been posted on its website before 2015, as well as all subsequent decisions.

The case is Tax Analysts v. IRS, No. 1:20-cv-01268 (D.D.C. 2020). The company is represented by Cornish F. Hitchcock of Hitchcock Law Firm PLLC.

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