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Government Responds to Tax Analysts Brief in Two-Hour Advice Appeal

MAR. 2, 2007

Tax Analysts v. IRS

DATED MAR. 2, 2007
DOCUMENT ATTRIBUTES
  • Case Name
    TAX ANALYSTS, Plaintiff-Appellee v. INTERNAL REVENUE SERVICE, Defendant-Appellant
  • Court
    United States Court of Appeals for the District of Columbia Circuit
  • Docket
    No. 06-5136
  • Institutional Authors
    Justice Department
  • Cross-Reference
    For Tax Analysts' brief in Tax Analysts v. IRS, No. 06-5136

    (D.C. Cir. Feb. 16, 2007), see Doc 2007-3943 [PDF] or 2007 TNT

    34-23 2007 TNT 34-23: Taxpayer Briefs.
  • Code Sections
  • Subject Area/Tax Topics
  • Jurisdictions
  • Language
    English
  • Tax Analysts Document Number
    Doc 2007-5691
  • Tax Analysts Electronic Citation
    2007 TNT 44-26

Tax Analysts v. IRS

 

ORAL ARGUMENT SCHEDULED FOR APRIL 19, 2007

 

 

IN THE UNITED STATES COURT OF APPEALS

 

FOR THE DISTRICT OF COLUMBIA CIRCUIT

 

 

ON APPEAL FROM THE JUDGMENT OF THE UNITED STATES

 

DISTRICT COURT FOR THE DISTRICT OF COLUMBIA

 

 

REPLY BRIEF FOR THE APPELLANT

 

 

Eileen J. O'Connor

 

Assistant Attorney General

 

 

Jonathan S. Cohen (202) 514-2970

 

Francesca U. Tamami (202) 514-1882

 

Attorneys

 

Tax Division

 

Department of Justice

 

P.O. Box 502

 

Washington, D.C. 20044

 

 

Of Counsel:

 

Jeffrey A. Taylor

 

United States Attorney

 

 

CERTIFICATE OF PARTIES, RULINGS, AND RELATED CASES

 

 

(1) Parties and amici:

(a) Appellant: Internal Revenue Service

(b) Appellee: Tax Analysts

(2) Ruling under review:

 

Appellant seeks review of the February 27, 2006, order of the United States District Court for the District of Columbia (Honorable Ellen Segal Huvelle) granting in part and denying in part Tax Analysts' motion for summary judgment, and granting in part and denying in part the Internal Revenue Service's motion for summary judgment. The court's order is at pp. 203-18 of the Joint Appendix ("JA"), and is reported at 416 F. Supp. 2d 119.

 

(3) Related Cases

 

This case has not previously been before this Court, and there are no related cases of which counsel is aware.

 TABLE OF CONTENTS

 

 

 Certificate of parties, rulings, and related cases

 

 Table of contents

 

 Table of authorities

 

 Glossary

 

 Statement

 

 Summary of argument

 

 Argument

 

 

      1. There is sufficient basis for this Court to waive the

 

      prudential rule against entertaining arguments not raised below

 

      in this case

 

 

      2. It is irrelevant that OCC's two-hour rule was not based on

 

      the statute's use of the word "component"

 

 

      3. The documents at issue were not "prepared by any national

 

      office component of the Office of Chief Counsel" and, thus, are

 

      not within the definition of CCA

 

 

 Conclusion

 

 Certificate of compliance

 

 Certificate of service

 

 Addendum

 

 

                      TABLE OF AUTHORITIES

 

 

 Cases:

 

 

 August v. FBI, 328 F.3d 697 (D.C. Cir. 2003)

 

 

 Boulez v. United States, 810 F.2d 209 (D.C. Cir. 1987)

 

 

 * Roosevelt v. E.I. Du Pont de Nemours & Co., 958 F.2d 416

 

 (D.C. Cir. 1992)

 

 

 Tax Analysts v. IRS, 117 F.3d 607 (D.C. Cir. 1997)

 

 

 Time Warner Entertainment Co. v. FCC, 93 F.3d 957 (D.C. Cir.

 

 1996)

 

 

 Statutes:

 

 

 Internal Revenue Code (26 U.S.C.):

 

 

      § 6110

 

      § 6110(i)

 

      * § 6110(i)(1)(A)

 

 

 Miscellaneous:

 

 

      Chief Counsel Directives Manual:

 

 

           § 33.1.2.1

 

           § 33.1.2.2

 

           § 33.1.2.2.3.3

 

           § 33.1.3.1.1

 

           (35)(19)44 (1992)

 

 

      * H.R. Conf. Rep. No. 105-599, at 299-301

 

      Notice CC-2007-003

 

      Notice CC-2006-13

 

 

 * Authorities chiefly relied upon are marked with an asterisk.

 

 

                            GLOSSARY

 

 

 CCA            Chief Counsel Advice

 

 CCDM           Chief Counsel Directives Manual

 

 IRC            Internal Revenue Code

 

 FOIA           Freedom of Information Act

 

 FSA            Field Service Advice

 

 OCC            Office of Chief Counsel

 

STATEMENT

 

 

This reply brief is addressed only to those points raised in the answering brief of Tax Analysts that we believe warrant a response. With respect to those points not discussed herein, we rely on our opening brief.

In our opening brief, we argued that the District Court erred in holding that informal legal advice sent by individual attorneys in the National Office of the Office of Chief Counsel ("OCC") to field personnel without supervisory review is "Chief Counsel advice" subject to disclosure under I.R.C. § 6110 (26 U.S.C.).1 Chief Counsel advice ("CCA") is defined, in relevant part, as "written advice or instruction . . . prepared by any national office component of the Office of Chief Counsel which is issued to field or service center employees of the Service or regional or district employees of the Office of Chief Counsel" and that conveys legal advice. I.R.C. § 6110(i)(1)(A).

We argued that, under the plain language of the statute, the advice must be "prepared" and "issued" by a "national office component of the Office of Chief Counsel" in order to be CCA. We observed that the plain meaning of "national office component," which is not defined in the statute, connotes an institutional dimension, not merely the views of a single National Office attorney. We noted that the documents withheld by the IRS here, pursuant to OCC's determination that informal advice rendered in less than two hours is not CCA (the "two-hour rule"), consist largely of e-mails sent by individual National Office attorneys to field personnel without prior review, approval, or authorization by a supervisor. Thus, we argued, the documents at issue were not "prepared" and "issued" by a "national office component of the Office of Chief Counsel" within the meaning of § 6110(i)(1)(A) and are not CCA.

We also argued that, to the extent the meaning of "prepared by any national office component" was viewed as ambiguous, the legislative history of § 6110(i) clearly establishes that the type of informal advice at issue here does not constitute CCA.

Moreover, we acknowledged that the Government did not raise these arguments before the District Court, but we maintained that they are an elaboration of our argument below, and concern purely legal questions that do not turn on evidence in the record. Thus, we asked this Court to entertain these arguments, which, in our view, are dispositive of the issue in the case, i.e., whether the informal advice withheld is CCA.

In response, Tax Analysts makes a number of contentions in defense of the District Court's judgment. As we shall show, none justifies the court's erroneous interpretation of § 6110(i).

 

SUMMARY OF ARGUMENT

 

 

The District Court erred in holding that informal legal advice sent by individual National Office attorneys to field personnel without supervisory review is "Chief Counsel advice" subject to disclosure under I.R.C. § 6110.

Tax Analysts observes (correctly) that the Government did not argue below that the documents at issue are not CCA because they were not "prepared by any national office component." But our argument in this Court, while concededly not framed in the same terms as our position below, which focused on the word "issued," in fact represents an elaboration of that argument in that it is based on considering the statutory language as a whole. Further, although this Court generally declines to entertain arguments not raised below, the Court has discretion to waive this prudential rule, especially where extraordinary circumstances exist. We respectfully submit that such circumstances exist here. Section 6110(i) is a statute of relatively recent vintage, and there is little in the way of case law regarding the scope of CCA. Thus, this case presents a novel question in an uncertain area of the law. The proper interpretation of § 6110(i) is likely to be a recurring question, and it would be a miscarriage of justice for a court to ignore relevant words of the statute in construing its meaning. Moreover, the question in this case is purely a legal one that does not turn on facts not considered by the District Court.

Tax Analysts argues that, in any event, the requirement of § 6110(i)(1)(A) that advice be "prepared by any national office component" to be CCA does not justify OCC's two-hour rule. But this is a red herring. The issue in this case is not whether OCC's two-hour rule is a proper interpretation of the statute but, rather, whether the material withheld pursuant to the two-hour rule falls within the statutory definition of CCA. Thus, it is irrelevant that, as Tax Analysts observes, the two-hour rule was based on a pre- existing OCC business rule, rather than on the agency's interpretation of the word "component." Tax Analysts criticizes OCC for allegedly reading an arbitrary temporal requirement into the statute, but in doing so Tax Analysts loses sight of the fact that the two-hour rule merely draws a line between formal legal advice, which is subject to institutional review, and informal advice, which is not subject to institutional review. The latter category does not fall within the definition of CCA contained in § 6110(i)(1)(A).

Finally, there is no merit to Tax Analysts' arguments that § 6110(i) does not distinguish between formal and informal legal advice, and that there is no practical difference between formal and informal advice. Indeed, the authorities cited to by Tax Analysts in support of this argument, particularly the Chief Counsel Directives Manual and two recent Chief Counsel notices, plainly apply to formal legal advice only, and do not disturb the rules applicable to informal advice that are detailed in our opening brief.

For these reasons, and the reasons discussed in our opening brief, this Court should reverse the District Court's grant of summary judgment in favor of Tax Analysts.

 

ARGUMENT

 

 

1. There is sufficient basis for this Court to waive the prudential rule against entertaining arguments not raised below in this case

As we acknowledged in our opening brief (Br. 20, n.5 & 28- 29)2, and as Tax Analysts discusses in its answering brief (TA Br. 15-25), the Government did not argue below that the documents at issue are not CCA because they were not "prepared by any national office component" within the meaning of § 6110(i)(1)(A). Rather, the Government argued that the term "issued" in § 6110(i)(1)(A) is ambiguous, and that reference to the statute's legislative history is appropriate. (Doc. 9 & 10, IRS Mem. of Law at 16-17.) We observed that the legislative history states that "issuance occurs when the Chief Counsel Advice has been approved within the national office component of the office of Chief Counsel in which the Chief Counsel Advice was proposed, signed by the person authorized to do so (usually the Assistant Chief Counsel or a Branch Chief), and sent to the field." H.R. Conf. Rep. No. 105-599, at 300. (Id. at 17-19.) We argued that, based on this description of "issuance," OCC's two-hour rule is reasonable, and entitled to judicial deference, because the documents withheld from disclosure under the two-hour rule were not subject to the institutional review process contemplated by the Conference Report. (Id. at 19-20.) We now argue that the plain language of the statute itself -- in particular, the phrase "prepared by any national office component of the Office of Chief Counsel" -- reflects the requirement that legal advice must be subject to institutional review to constitute CCA. Because the lynchpin of both our argument below and our argument on appeal is the lack of institutional review accorded the less-than- two-hour documents at issue, Tax Analysts has not been prejudiced.

Tax Analysts notes that this Court has declined to consider arguments not raised below unless there are "exceptional circumstances." (TA Br. 23-24.) We submit that such circumstances exist here. This Court has stated that

 

[c]ourts of appeals are not rigidly limited to issues raised in the tribunal of first instance; they have a fair measure of discretion to determine what questions to consider and resolve for the first time on appeal. That discretion generally has been exercised to allow consideration of issues not raised earlier only in exceptional circumstances. Qualifying circumstances include: uncertainty in the state of the law; a novel, important, and recurring question of federal law; an intervening change in the law; and extraordinary situations in which review is necessary to prevent a miscarriage of justice or to preserve the integrity of the judicial process.

 

Roosevelt v. E.I. Du Pont de Nemours & Co., 958 F.2d 416, 419 n.5 (D.C. Cir. 1992) (internal citations omitted). This Court has exercised its discretion to entertain arguments not raised below where "the issue is purely one of law important in the administration of federal justice, and the resolution of the issue does not depend on any additional facts not considered by the district court." Id.; see Time Warner Entertainment Co. v. FCC, 93 F.3d 957, 974-75 (D.C. Cir. 1996).

Such qualifying circumstances exist in this case. First, § 6110(i) is a relatively new statute (enacted in 1998), and there is a dearth of authority regarding its construction and application. Indeed, so far as we are aware, no court of appeals has interpreted the definition of CCA. Thus, there is uncertainty in the law regarding § 6110(i), and the issue presented in this case is a novel one. The proper interpretation of § 6110(i) is likely to be a recurring question, as evidenced by the lengthy history of litigation between Tax Analysts and the IRS regarding the public disclosure of documents. See TA Br. 3-5.

Second, the question presented in this case is an important one that will affect the operation of OCC and the public's confidence in the federal tax system. As noted by Tax Analysts, IRS field personnel are relying increasingly on informal advice from the National Office. (TA Br. 27, citing Chief Counsel Notice 2006-13.) The District Court's ruling adversely affects OCC's ability to supply timely informal guidance to field personnel. Field personnel are likely to make fewer requests for such advice, and National Office attorneys are likely to be uneasy with the prospective release to the public of their informal responses. The disclosure of informal advice that has not received institutional approval also may result in divergent or inconsistent statements of the tax laws, and may hinder § 6110's purpose to provide "access to the 'considered view of the Chief Counsel's national office on significant tax issues'" and "increase the public's confidence that the tax system operates fairly and in an even-handed manner with respect to all taxpayers." H.R. Conf. Rep. No. 105-599, at 299.

Third, consideration of all of the words of § 6110(i)(1)(A) is necessary to prevent a miscarriage of justice. This Court should not ignore the words "prepared by any national office component" in construing the definition of CCA simply because the Government failed to draw those words to the District Court's attention. Refusing to consider relevant words of a statute in construing the statute's meaning "would do nothing to preserve the integrity of the judicial process." Time Warner, 93 F.3d at 975.

Fourth, the question that the Government asks this Court to consider is purely one of law, and its resolution does not depend on any additional facts not considered by the District Court. Specifically, the question is whether the phrase "prepared by any national office component of the Office of Chief Counsel" in § 6110(i)(1)(A) requires that legal advice be subject to review and approval at an institutional level to be considered CCA, or whether, as Tax Analysts contends, it refers to the informal responses of individual National Office attorneys sent to the field (largely via e-mail) with no prior supervisory review. The proper interpretation of this statutory language does not depend on any facts in the record.

Finally, this Court's opinion in August v. FBI, 328 F.3d 697 (D.C. Cir. 2003), cited by Tax Analysts (TA Br. 25), is not to the contrary. In August, the Court discussed the general rule barring agencies from asserting new FOIA exemptions on appeal, but it recognized that there are exceptions to the rule, stating "we have avoided adopting a rigid 'press it at the threshold, or lose it for all times' approach." Id. at 699. The Court observed that one exception is where the Government fails to invoke an exemption through "pure mistake." Id. at 700. It also stated that the purpose of the rule is to prevent the Government from "play[ing] cat and mouse by withholding its most powerful cannon until after the District Court has decided the case and then springing it on surprised opponents and the judge." Id. at 699.

In this case (which is not a FOIA case), the Government's failure to emphasize the phrase "prepared by any national office component" in the proceedings below was simply a mistake. In arguing that CCA only includes documents that have been reviewed and approved at the institutional level, the Government focused on the statutory term "issued," rather than on "prepared by any national office component." This was "simple human error," and not "the kind of tactical maneuvering" disapproved by this Court. Id. at 701.

2. It is irrelevant that OCC's two-hour rule was not based on the statute's use of the word "component"

Tax Analysts exhaustively catalogs OCC's use of the word "component" in the Chief Counsel training materials and operating manuals to establish that "[t]he two-hour rule was not based on an interpretation or application of the statutory term 'component.'" (TA Br. 18-23.) We never have asserted, however, that OCC's two-hour rule was based on an interpretation of the phrase "prepared by any national office component" contained in § 6110(i)(1)(A). Rather, we explained that the two-hour rule originated as an internal management rule for determining when a matter was significant enough to warrant opening a case file, and that OCC adopted the two-hour standard in implementing § 6110(i) on the theory that if a matter is simple enough to be handled in less than two hours, then National Office attorneys could resolve the matter informally without obtaining the approval of their managers. With no prior review or approval, the advice would not be CCA. (Br. 9.)

Moreover, it is irrelevant that OCC's two-hour rule was not based on an interpretation of the phrase "prepared by any national office component." The issue in this case is not whether OCC's two- hour rule is a proper interpretation of § 6110(i). Rather, the issue is whether the documents withheld from disclosure by OCC pursuant to its two-hour rule fall within the statutory definition of CCA. As explained in our opening brief, the documents withheld under the two-hour rule consist largely of informal e-mail responses from individual National Office attorneys sent to the requester without prior supervisory review or approval. (Br. 12-13, 22-25.) Tax Analysts does not contest this fact in its answering brief. Because the documents at issue did not undergo a process of institutional review and approval prior to being sent to the field, they cannot fairly be characterized as "written advice or instruction . . . prepared by any national office component of the Office of Chief Counsel which is issued" to the field within the meaning of § 6110(i)(1)(A).

In any event, regardless of its origin, it is clear that OCC considered its two-hour rule to be a valid implementation of § 6110(i), based on the statute's legislative history. OCC's training materials explain that:

 

. . . The legislative history to section [6110(i)] clarifies that informal advice is not considered to be CCA. . . . The 'twohour' rule may appear to be artificial for determining whether the e-mail writing is CCA; however, this rule has historically been the touchstone for determining, for numerous business reasons, whether advice is considered 'informal' or 'formal.' Because the 'informal/formal' dichotomy has been incorporated into the concept of CCA, and since the Office is committed to retaining its business rules and document characterizations without regard to disclosure results, the Office has retained the 'two-hour' rule (subject to other business rules defining informal advice) as indicative of CCA.

 

(JA 59.) The Conference Report accompanying § 6110(i) clearly establishes this "informal/formal" dichotomy. Contrary to Tax Analysts' assertions that the Conference Report only recognizes telephonic advice as informal advice (TA Br. 8, 26), the report states:

 

The new subsection covers written advice "issued" to field personnel of either the IRS or the Office of Chief Counsel in its final form. With respect to Chief Counsel Advice, issuance occurs when the Chief Counsel Advice has been approved within the national office component of the office of Chief Counsel in which the Chief Counsel Advice was proposed, signed by the person authorized to do so (usually the Assistant Chief Counsel or a Branch Chief), and sent to the field. Chief Counsel Advice does not include written recordations of informal telephonic advice by the National Office of Chief Counsel to field personnel of either the IRS or the Office of Chief Counsel. Drafts of Chief Counsel Advice sent to the field for review, criticism, or comment prior to approval within the National Office also need not be made public.

 

H.R. Conf. Rep. No. 105-599, at 300-01. This suggests that legal advice that is not "issued," as Congress described the term, is informal advice equivalent to written recordations of telephonic advice, and is not CCA. Tax Analysts also is wrong in asserting that "[t]here are no exceptions covering written advice in either the statute or the report" (TA Br. 26), as the Conference Report plainly provides that draft advice is not CCA.

Finally, Tax Analysts' suggestion that OCC has instructed its attorneys to ignore § 6110(i)'s disclosure requirements where they are inconvenient is patently wrong. (TA Br. 9, 20.) There is nothing nefarious in OCC's adherence to its internal business rules "without regard to disclosure results." (JA 59.) This simply means that OCC attorneys should render advice that meets the requester's needs without an eye towards potential disclosure. Indeed, OCC has admonished its attorneys that they should not avoid rendering formal legal advice, when it is called for, simply to avoid public disclosure of their advice. (JA 79-80.)

3. The documents at issue were not "prepared by any national office component of the Office of Chief Counsel" and, thus, are not within the definition of CCA

As previously mentioned, Tax Analysts does not dispute that the documents withheld under the two-hour rule were not subject to institutional review and approval prior to being sent to the field.3 Nevertheless, Tax Analysts characterizes the two- hour rule as a completely arbitrary means of identifying CCA. (E.g., TA Br. 16, 22.) Thus, Tax Analysts argues that "an individual attorney becomes a 'component' whose advice must be published if he or she spends 120 minutes on research and writing, but is not a 'component' if he or she spends 119 minutes or less on the advice." (TA Br. 28.) Tax Analysts also argues that "an attorney who is a fast researcher, a fast typist and someone who can complete the task in under two hours is not a 'component' of OCC" whereas "an attorney who takes two hours or more to research and type the advice is a 'component' of OCC." (TA Br. 16.) Tax Analysts, however, ignores the point that, pursuant to OCC's internal operating procedures, the slower attorney's work is subjected to supervisory review and approval prior to being sent to the field, and it is that critical difference -- not a matter of 119 minutes versus 120 minutes -- that makes that work product CCA.

Tax Analysts argues that an individual attorney represents his or her component and, thus, is a "component" for purposes of § 6110(i)(1)(A). (TA Br. 29-33.) In support, Tax Analysts cites (TA Br. 29-30) to numerous sections of the Chief Counsel Directives Manual ("CCDM"), but those sections address procedures for formal legal advice, not informal advice. (JA 96-103.) Formal legal advice per se is not within OCC's two-hour rule, and generally is treated as CCA, as long as the other definitional requirements are met. See CCDM § 33.1.3.1.1(2)(c) & (g) (JA 105-06). In any event, although individual OCC attorneys represent OCC in a generic sense, the informal views of individual attorneys that have not been approved or adopted by a supervisor do not bind OCC. See, e.g., Boulez v. United States, 810 F.2d 209 (D.C. Cir. 1987). The plain language of § 6110(i)(1)(A) clearly contemplates institutional action, not the unsupervised actions of a single attorney.

Tax Analysts also argues that "the Appellate Section's 'component' argument is less solid than a house of cards" because OCC's own instruction states that "legal advice that can be rendered in less than two hours by a National Office component" need not be released to the public. (TA Br. 30.) The language cited by Tax Analysts appeared in Q&A 12 of Chief Counsel Notice 2004-012 and was reproduced verbatim in the CCDM. (JA 83, 102.) These appear to be the only instances where it is suggested that legal advice rendered by a National Office component would not be CCA, and they are incorrect statements that do not reflect OCC's practices. The affidavit of Deborah Butler, Associate Chief Counsel for Procedure and Administration, explains in detail that "if a matter is simple enough to be handled in less than two hours, then National Office attorneys may resolve the matter informally without proposing draft advice in memorandum form and obtaining approval from their managers (as evidenced by their signature); i.e., going through the process of 'issuance' that includes review, approval, and signature by a manager that occurs with formal advice." (JA 27; see also JA 31.) Moreover, OCC's training materials establish that where legal advice is actually rendered by the component (i.e., the matter is significant enough to warrant supervisory review), it constitutes CCA, even if it was rendered in less than two hours. (JA 59, 144-46.) In short, the imprecise language of Q&A 12 emphasized by Tax Analysts does not reflect OCC's policy or practices, and the critical fact, which Tax Analysts does not contest, remains that the less-than-two- hour documents at issue were not reviewed or approved at an institutional level prior to being sent to the field.

Tax Analysts disputes that § 6110(i) draws a distinction between documents that have been reviewed at the institutional level and documents receiving no institutional review, citing Field Service Advice memoranda ("FSAs") as an example.4 (TA Br. 32-33.) Tax Analysts alleges that FSAs were not reviewed prior to issuance because this Court's opinion in Tax Analysts v. IRS, 117 F.3d 607 (D.C. Cir. 1997), which ordered the IRS to disclose FSAs under pre-1998 § 6110, makes no reference to such review. The opinion's silence does not establish that FSAs were not reviewed prior to issuance, and, in fact, FSAs were approved and signed by, at a minimum, a reviewer prior to issuance.5See CCDM (35)(19)44 (1992) (attached in the Addendum, infra). In contrast, the less-than-two-hour documents at issue here received no review whatsoever prior to being sent to the field.

Tax Analysts argues that, in any event, there is no real distinction between informal and formal legal advice based on two recent Chief Counsel notices, excerpted in the addendum to Tax Analysts' brief, that purportedly extend the requirements for formal legal advice to informal advice. (TA Br. 27.) This assertion is belied by the notices themselves (albeit portions that Tax Analysts excluded from its addendum). The first notice, Notice 2006-13, summarizes the recommendations of an OCC task force for improving the manner in which OCC attorneys provide legal advice to IRS personnel, and it addressed both "formal written advice" (pp. 3-7) and "informal advice" (pp. 7-8). The section regarding formal written advice discussed problems arising from OCC attorneys' reliance on case- specific guidance in seeking guidance on broader issues. Notice CC- 2006-13, at 3. To deal with the problem, the task force proposed "the creation of a Generic Legal Advice memorandum that would, except in limited circumstances, be issued and signed by the Associate, Deputy Associate, or Assistant Chief Counsel." Id. at 5.

The second notice, Notice 2007-003, sets out procedures for implementing Generic Legal Advice memoranda. Notice CC-2007-003, at 1. The notice clearly contemplates that General Legal Advice memoranda are a subcategory of formal written advice, as it expressly provides that a case file should be opened for such memoranda, and that they should be processed for release to the public. Id. at 2-3. The notice sets forth revisions to sections of the CCDM dealing with formal legal advice only. Id. at 4. (Indeed, CCDM § 33.1.2.2.3.3, cited by Tax Analysts (TA Br. 27), is a subsection of CCDM § 33.1.2.2, entitled "Formal Legal Advice." Informal advice is dealt with in CCDM § 33.1.2.1. (JA 96.)) Nothing in Notice 2007-003 makes its provisions applicable to informal advice, and, thus, there is no support for Tax Analysts' statement that "[t]his mandatory standard format applies to all legal advice, investing so-called 'informal' advice with a high degree of formality, whether the advice is e-mailed or snail-mailed, and whether prepared in 119 minutes or 120 minutes or more.6 (TA Br. 27-28.)

In short, Tax Analysts' focus on what OCC has said and done regarding § 6110(i) does not alter the fact that the plain language of the statute requires that advice be "prepared by any national office component of the Office of Chief Counsel" to be CCA. I.R.C. § 6110(i)(1)(A). The documents Tax Analysts seeks here were prepared and sent to the field by individual National Office attorneys with no prior supervisory review or approval and, thus, they are not CCA.

 

CONCLUSION

 

 

Based on the foregoing, the District Court's grant of summary judgment in favor of Tax Analysts should be reversed.
Respectfully submitted,

 

 

Eileen J. O'Connor

 

Assistant Attorney General

 

 

Jonathan S. Cohen (202) 514-2970

 

Francesca U. Tamami (202) 514-1882

 

Attorneys

 

Tax Division

 

Department of Justice

 

P.O. Box 502

 

Washington, D.C. 20044

 

 

Of Counsel:

 

Jeffrey A. Taylor

 

United States Attorney

 

MARCH 2007

 

FOOTNOTES

 

 

1 Unless otherwise indicated, all section references herein are to the Internal Revenue Code of 1986.

2 "Br." refers to our opening brief, and "TA Br." refers to Appellee's answering brief. "Doc." refers to the District Court docket sheet entries.

3 In describing provisions of the August 2000 Chief Counsel Desk Guide, Tax Analysts states that "'two-hour' e-mail advice is reviewed, filed in binders, retained and distributed." (TA Br. 9-10.) As explained in our opening brief (Br. 24-25), informal advice is reviewed after it has been sent to the field, and it is retained primarily for administrative purposes, not as a legal research resource. Tax Analysts does not contest these facts (other than to speculate, without foundation, that copies of informal advice are retained "probably for research purposes." (TA Br. 21.))

4 OCC no longer issues advice under the label "Field Service Advice," although it continues to provide similar advice in varying forms depending on the needs of the requester. (JA 82.)

5 Thus, there is no inconsistency, as Tax Analysts suggests (TA Br. 32, n.8), with the IRS's earlier representation that FSAs "are only occasionally subjected to high level review."

6 Paragraph 4 on page 4 of Notice 2007-003, cited by Tax Analysts (TA Br. 28), does not support this assertion. Rather, that paragraph generically discusses CCA within the section of the CCDM explaining the difference between technical advice and legal advice. See Notice CC-2007-003, at 3-4.

 

END OF FOOTNOTES
DOCUMENT ATTRIBUTES
  • Case Name
    TAX ANALYSTS, Plaintiff-Appellee v. INTERNAL REVENUE SERVICE, Defendant-Appellant
  • Court
    United States Court of Appeals for the District of Columbia Circuit
  • Docket
    No. 06-5136
  • Institutional Authors
    Justice Department
  • Cross-Reference
    For Tax Analysts' brief in Tax Analysts v. IRS, No. 06-5136

    (D.C. Cir. Feb. 16, 2007), see Doc 2007-3943 [PDF] or 2007 TNT

    34-23 2007 TNT 34-23: Taxpayer Briefs.
  • Code Sections
  • Subject Area/Tax Topics
  • Jurisdictions
  • Language
    English
  • Tax Analysts Document Number
    Doc 2007-5691
  • Tax Analysts Electronic Citation
    2007 TNT 44-26
Copy RID