Aronson v. IRS

• Decision Date: 24 June 1991
• Docket Number: Civ. A. No. 89-1914-WD.
• Citation: 767 F. Supp. 378
• Parties: Robert A. ARONSON, Plaintiff, v. INTERNAL REVENUE SERVICE, et al., Defendants.
• Court: U.S. District Court — District of Massachusetts

767 F. Supp. 378

Robert A. ARONSON, Plaintiff, v. INTERNAL REVENUE SERVICE, et al., Defendants.

Civ. A. No. 89-1914-WD.

United States District Court, D. Massachusetts.

June 24, 1991.

Richard W. Lubart, Richard Lubart, Brookline, Mass., for plaintiff.

Frank Albert Libby, Jr., U.S. Atty., Boston, Mass., Kathryn Brown, Dept. of Justice, Tax Div., Washington, D.C., for defendants I.R.S., Nicholas F. Brady and Frederick T. Goldberg.

MEMORANDUM AND ORDER

WOODLOCK, District Judge.

Plaintiff, Robert A. Aronson, initiated a request under the Freedom of Information Act ("FOIA") to obtain Internal Revenue Service ("IRS") records pertaining to those individuals with undistributed income tax refunds. Thereafter, frustrated by the IRS's lack of response to his request, Aronson filed suit to compel release of the materials. The IRS, which withheld the information, contends that it is protected under FOIA Exemption 3, as subject to withholding under the Internal Revenue Code, and Exemption 6, as an unwarranted invasion of personal privacy.

Before me are cross motions for summary judgment. Acting on these motions, I will order disclosed to Aronson records of the names and last known mailing addresses of those taxpayers still due refunds for tax years 1981 through and including 1987. However, I will decline to order disclosure of the identifying number, amount of refund due, and the particular tax years involved for each of these taxpayers.

I

A. ARONSON'S REQUEST

Aronson submitted his original FOIA request in May, 1989. He requested "the entire file of undistributed income tax refunds for the tax years 1981 through and including 1987," including the name of each taxpayer due a refund, his or her last known address and taxpayer identifying number and the amount of refund due.¹ In June, 1989, the IRS notified Aronson that it needed additional time to respond to his request. Aronson did not hear again from the IRS until after he filed this law suit on August 23, 1989.

Aronson is an attorney who by his own account also "locates and identifies unclaimed and apparently abandoned money and other property held by state and federal governments." Using what he describes as sophisticated "tracing" techniques, he attempts to locate the individuals entitled to such property and offers his services, on a contingent fee basis, to help them recover.

The IRS has confirmed that it has all the undelivered refund data requested by the plaintiff stored on a computer tape. At a hearing on this matter, I instructed counsel for the IRS to present evidence demonstrating, with respect to the last five years, what efforts the IRS has made to locate those taxpayers due refunds for the years in question, whether release of personal information was involved in these efforts and how effective the efforts were in achieving the distribution of refunds. While the subsequent submission of the IRS was incomplete with respect to the aforementioned issues, the IRS represented that it is currently "in the process of retrieving" for the plaintiff the requested "taxpayers' names, city state and zipcode that have been released to the press for 1981 through 1987." United States' Statement of Material Facts As To Which There Is No Genuine Issue, ¶ 9 (Feb. 15, 1991).

B. THE INFORMATION SOUGHT

The submissions of the IRS provide only a sketchy account of its handling of tax refund checks. Federal income tax refund checks are returned to the IRS undelivered for a variety of reasons, including incorrect mailing addresses, a prohibition on forwarding them and the fact that they will only be delivered to a "secure" mailbox. In the years 1988, 1989 and 1990, more than 70,000 refund checks, totaling over $40 million, were returned as undeliverable each year. IRS Public Affairs, News Release IR-88-152 (Nov. 15, 1988); IRS Public Affairs, News Release IR-89-138 (Nov. 9, 1989); IRS Public Affairs, News Release IR-90-143 (Nov. 27, 1990). The IRS's efforts to see that taxpayers eventually receive these checks consists of three types of procedures.

When a check is returned undelivered the IRS compares the mailing address used to those appearing on the tax return and in its own computer system. An undeliverable refund notice, which is forwardable and deliverable to an unsecured mailbox, is sent to the original address used or any more current address discovered. The notice requests the taxpayer provide a current address and sign and return the form. Return of this notice undelivered will trigger a second round involving the same procedure.

A separate program entails a media campaign conducted by IRS Public Affairs officers. The IRS issues news releases aimed at publicizing, on a nationwide and local level, the fact that many tax refunds remain undelivered. In addition, under its current Undelivered Refund Checks Program,² lists containing the names of taxpayers due refunds, along with his or her city, state and zip code, are regularly released to the media for publication.³

Under another program, when a refund check is returned undelivered a "code is posted" on the taxpayer's account. Activity such as a change of address or filing a subsequent tax return in connection with the same account will trigger instructions to issue and mail a new refund check.⁴

The submissions by the IRS indicate that for refund checks initially returned as undeliverable in 1989, it was able to deliver over 80% of the checks by that year's end and approximately 90% of the refunds by August, 1990.⁵ (No figures were submitted for previous years and those figures for checks returned in 1990 remain incomplete.) However, the IRS has submitted no information whatsoever regarding the subsequent fate of the remaining undelivered refunds.

II THE STATUTORY SCHEMES

The FOIA manifests a basic policy in favor of disclosure of government-held information. FBI v. Abramson, 456 U.S. 615, 630-31, 102 S.Ct. 2054, 2063-64, 72 L.Ed.2d 376 (1982). Nevertheless, because "public disclosure is not always in the public interest," Baldrige v. Shapiro, 455 U.S. 345, 352, 102 S.Ct. 1103, 1108, 71 L.Ed.2d 199 (1982), the mandate of broad disclosure is far from absolute. FOIA contains nine explicit exemptions from the general rule of disclosure, "to preserve certain necessary functions of government and to protect individuals who would be damaged by disclosure." New England Apple Council v. Donovan, 725 F.2d 139, 141-42 (1st Cir. 1984). These exemptions represent "the congressional determination of the types of information that the Executive Branch must have the option to keep confidential, if it so chooses." EPA v. Mink, 410 U.S. 73, 80, 93 S.Ct. 827, 832, 35 L.Ed.2d 119 (1973), superseded by statute as noted in, CNA Fin. Corp. v. Donovan, 830 F.2d 1132, 1142 n. 66 (D.C.Cir.1987), cert. denied, 485 U.S. 977, 108 S.Ct. 1270, 99 L.Ed.2d 481 (1988); see also Baldrige v. Shapiro, 455 U.S. at 352, 102 S.Ct. at 1108.

The two exemptions claimed here by the IRS involve an analysis of (A) whether the Internal Revenue Code itself protects the information sought from disclosure and (B) whether the disclosure of any unprotected information would be an unwarranted invasion of privacy.

A. EXEMPTION 3 AND SECTION 6103

Exemption 3 of FOIA, the so-called "other statute exemption," excludes from mandatory disclosure material

specifically exempted from disclosure by statute ... provided that such statute (A) requires that the matters be withheld from the public in such a manner as to leave no discretion on the issue, or (B) establishes particular criteria for withholding or refers to particular types of matters to be withheld.

5 U.S.C. § 552(b)(3).

It is well established that § 6103 of the Internal Revenue Code ("I.R.C."), 26 U.S.C. § 6103, generally qualifies as a statute within the scope of Exemption 3. See Church of Scientology v. IRS, 484 U.S. 9, 11, 108 S.Ct. 271, 273, 98 L.Ed.2d 228 (1987) (§ 6103 "is the sort of statute referred to by 5 U.S.C. § 552(b)(3) of the FOIA relating to matters that are `specifically exempted from disclosure by statute ...'"); DeSalvo v. IRS, 861 F.2d 1217, 1221 (10th Cir.1988). Thus, if § 6103 forbids the disclosure of certain material, that material may not be produced in response to a request under the FOIA. Church of Scientology, 484 U.S. at 11, 108 S.Ct. at 273. Section 6103(a) provides that "returns and return information shall be confidential and shall not be disclosed except as authorized by this title."

All of the information sought in Aronson's request falls within the scope of "return information" as defined by § 6103(b)(2), and is thus exempt from disclosure under FOIA, except as specifically authorized. Aronson concedes that "return information" is generally exempt from disclosure under the FOIA, but maintains that the exception created by § 6103(m)(1) provides otherwise in the case of disclosures concerning unclaimed tax refunds.

Subsection 6103(m)(1) is one of over a dozen subsections which "set forth various exceptions to the general rule that returns and return information are confidential and not to be disclosed," Church of Scientology, 484 U.S. at 15, 108 S.Ct. at 275, and allow disclosure of select "information for miscellaneous administrative and other purposes," S.Rep. No. 938, pt. II, 94th Cong., 2d Sess. 480 (1976), reprinted in 1976 U.S.Code Cong. & Admin.News 4030, 4185. Subsection (m)(1) provides:

The Secretary may disclose taxpayer identity information to the press and other media for purposes of notifying persons entitled to tax refunds when the Secretary, after reasonable effort and lapse of time, has been unable to locate such persons.

26 U.S.C. § 6103(m)(1). "Taxpayer identity" is defined for the purpose of this section as

The name of a person with respect to whom a return is filed, his mailing address, his taxpayer identifying number ... or any combination thereof.

26 U.S.C. § 6103(b)(6).

Even if subsection (m)(1) applies in this case, that exception has...