Tuesday, August 29, 2017

Public Interest Entity Fails in FOIA Attempt to Force IRS to Disclose President Trump's Tax Returns (8/29/17)

In Electronic Privacy Information Center, v IRS, 2017 U.S. Dist. LEXIS 131911 (D. D.C. 2017), here, the court rejected the EPIC's attempt to obtain the tax returns of President Donald J. Trump.  I have added the following footnote to p. 144 of the Practitioner Edition after the sole paragraph in (there is no change to the Student Edition), but provide the entire text paragraph (for context) and the footnote:

Ch. 4.  Confidentiality and Disclosure of Return Information.
IV.  Exceptions–Must be Congressionally Approved.
H. Other Permitted Disclosures
Section 6103 contains a plethora of other permitted disclosures. All are grounded in some perception of national priority that trumps the general need for secrecy. I do not expect you to know these other exceptions for this class.  You should, however, know that, when you practice in this area, you simply have to slug through the various and many permitted disclosures to assess risks of disclosure for your client and remedies that may be available for wrongful disclosure.  Your intuition based on the foregoing examples should also give you a sense of when a national priority exists for which Congress might have provided an exception.  But you still must read the statute, because sometimes Congress' sense of national priorities may be different than what you think it is or should be. fn. 611a 
fn. 611a.  There is one disclosure authority within this general grouping that is worth a passing mention because of its topical interest in 2017 when this footnote was prepared.  Section 6103(k)(3) permits the IRS, upon approval of the JCT, to disclose return information “with respect to any specific taxpayer to the extent necessary for tax administration purposes to correct a misstatement of fact published or disclosed with respect to such taxpayer’s return or any transaction of the taxpayer with the Internal Revenue Service.”  Notice the qualifiers for this authority: (i) approval by the JCT; and (ii) necessity for tax administration.   See § 6103(b)(4) (defining tax administration).  Merely some national emergency does not fit this exception; rather the necessity must arise from tax administration and it is solely to correct a misstatement of fact.  It is hard to imagine this authority being invoked with these limitations, and so far as I am aware, it has never been invoked.  See for a failed attempt to require the IRS to exercise this authority to release President Donald J. Trump’s tax returns, Electronic Privacy Information Center, v IRS, ___, 2017 U.S. Dist. LEXIS 131911 (D. D.C. 2017) (calling this exception a “rara avis” and also stating that the Court is aware of no instance of its actual use, but (i) noting two instances where preliminary moves were made to obtain the required permission but the permission from the JCT were not granted and (ii) other citings in cases appear to have been errors).  This case also held that, under the APA or otherwise, there is no requirement that the IRS seek the approval of the JCT to make the disclosures.
I also revised footnote 555 on p. 135 as follows and offer the sentence in the text and the footnote:
The IRS generally “may” also disclose return information to the taxpayer or his or her representative or designee unless it determines that the disclosure would “seriously impair Federal tax administration.” fn 555
fn. 555 § § 6103(c) (as to taxpayer’s representative) and § 6103(e)(7) (as to taxpayer and others otherwise having access).  Regs. § 601.702(c)(5)(iii)(C) (“In the case of an attorney-in-fact, or other person requesting records on behalf of or pertaining to other persons, the requester shall furnish a properly executed power of attorney, Privacy Act consent, or tax information authorization, as appropriate.”).  For an interesting application of this limitation where the FOIA suit was dismissed because the requester seeking the returns of President Donald J. Trump did not provide President Trump’s consent to the disclosure, see Electronic Privacy Information Center, v IRS, ___, 2017 U.S. Dist. LEXIS 131911 (D. D.C. 2017).

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