Aronson v. I.R.S.

• Decision Date: 05 May 1992
• Docket Number: 91-2257,Nos. 91-2256,s. 91-2256
• Citation: 973 F.2d 962
• Parties: -5259, 92-2 USTC P 50,366 Robert A. ARONSON, Plaintiff, Appellant, v. INTERNAL REVENUE SERVICE, et al., Defendants, Appellees. Robert A. ARONSON, Plaintiff, Appellee, v. INTERNAL REVENUE SERVICE, et al., Defendants, Appellants. . Heard
• Court: U.S. Court of Appeals — First Circuit

Page 962

973 F.2d 962

70 A.F.T.R.2d 92-5259, 92-2 USTC P 50,366

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

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

Nos. 91-2256, 91-2257.

United States Court of Appeals First Circuit.

Heard May 5, 1992.

Decided July 10, 1992.

Channing S. MacDonald, Boston, Mass., with whom Richard W. Lubart, Brookline, Mass., was on brief, for Robert A. Aronson.

Frank P. Cihlar, with whom James A. Bruton, Acting Asst. Atty. Gen., with whom Gary R. Allen, and Jonathan S. Cohen, Attys., Tax Div., Dept. of Justice, Washington, D.C., and Wayne A. Budd, U.S. Atty., Boston, Mass., were on brief, for I.R.S. et al.

Before BREYER, Chief Judge, CYR, Circuit Judge, BOYLE, ^* District Judge.

BREYER, Chief Judge.

The government appeals a district court 767 F.Supp. 378 judgment requiring the Internal Revenue Service ("IRS") to provide Robert Aronson, a private tracer of lost taxpayers, with the last known street addresses of persons to whom the government owes tax refunds for the years 1981-87. The district court held that the Freedom of Information Act ("FOIA"), 5 U.S.C. § 552, requires that disclosure. In our view, however, a different statute, a special tax statute that limits the disclosure of tax return information, permits the IRS not to disclose this information to private persons such as Aronson. 26 U.S.C. § 6103(a), (m)(1). And, an exemption in the FOIA makes clear that this tax statute, not the FOIA's general disclosure provision, governs this case. 5 U.S.C. § 552(b)(3). We reverse the district court's determination to the contrary. For similar reasons, we affirm the district court's related decision denying Aronson access to some different taxpayer information, namely taxpayer identification numbers.

I Background

Robert Aronson is a lawyer who specializes in finding persons to whom the government owes money and, for a fee, helping them obtain the money that is their due. Insofar as he finds people whom the agency would not otherwise have found, Aronson performs a public service. Insofar as he finds and charges people whom the agency would have located on its own, his service is less beneficial. See Aronson v. Dep't of Hous. and Urban Dev., 822 F.2d 182, 183, 188 (1st Cir.1987) (Department's "poor performance in locating" those owed money is a "public interest" factor favoring disclosure), later proceeding, 866 F.2d 1 (1st Cir.1989).

In May 1989, Aronson, invoking the FOIA, asked the IRS for "the entire file of undistributed income tax refunds for the tax years 1981 through and including 1987." Aronson wanted the name of each taxpayer due a refund, the last known street or mailing address, the taxpayer's identification number, and the amount of the refund due. The IRS had previously released names and partial addresses (cities, states, and zipcodes) to the press as part of its own efforts to find those taxpayers. It gave Aronson this same information. Aronson then brought this lawsuit to compel the IRS to give him the rest of the information.

The district court, finding no genuine and material factual disputes, entered an order, on summary judgment, compelling the IRS to give Aronson the last known street addresses along with the names, cities and zipcodes already supplied. It denied the rest of Aronson's request. The IRS now appeals the district court's order requiring it to provide street addresses. Aronson appeals only the district court's decision not to require the IRS to give him each taxpayer's identification number. We shall consider the IRS's appeal first, turning to Aronson's appeal in the final section of this opinion.

II The Relevant Statutes

Two statutes set forth the law that governs this case. The first is the Freedom of Information Act. The second is a specific provision of the Internal Revenue Code that governs the confidentiality of taxpayer identity information.

1. The Freedom of Information Act. The FOIA requires government agencies to "make ... promptly available" to any person, upon request, whatever "records" the agency possesses unless those "records" fall within any of nine listed exemptions. 5 U.S.C. § 552(a)(3), (b). The third listed exemption in the statute ("Exemption 3"), relevant here, provides:

(b) This section [i.e., the FOIA disclosure requirement and procedures] does not apply to matters that are ... (3) 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) (emphasis added). That is to say, the FOIA does not require an agency to disclose information if another statute requires the agency to withhold the information, as long as that other statute (1) gives the agency no discretion to disclose, or (2) establishes criteria for withholding, or (3) specifies particular types of information to be withheld.

2. The Tax Statute. Congress, as part of the Tax Reform Act of 1976, enacted a detailed statute governing the "[c]onfidentiality and disclosure of returns and return information." 26 U.S.C. § 6103. This tax statute lays down a basic rule of confidentiality. It forbids the IRS to "disclose" any tax "return" or tax "return information." 26 U.S.C. § 6103(a). It defines "return information" as including "a taxpayer's identity." 26 U.S.C. § 6103(b)(2)(A). And, it defines "taxpayer identity" as

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

26 U.S.C. § 6103(b)(6) (emphasis added); see also Church of Scientology v. IRS, 484 U.S. 9, 10-11, 108 S.Ct. 271, 272-273, 98 L.Ed.2d 228 (1987). It then sets forth several narrowly drawn exceptions, defining specific circumstances in which the IRS may, or must, reveal some of this information. 26 U.S.C. § 6103(c)-(o). One of these exceptions, relevant here, states:

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) (emphasis added).

III The Relevant Legal Questions

The Supreme Court has held that a court, when examining a claim that FOIA Exemption 3 permits an agency to withhold particular requested data, must ask two questions. First, does the special statute (here, the tax statute, 26 U.S.C. § 6103(a), (m)(1)) "constitute a statutory exemption to disclosure within the meaning of Exemption 3"? Second, is the requested data "included within" this special statute's "protection"? CIA v. Sims, 471 U.S. 159, 167, 105 S.Ct. 1881, 1886, 85 L.Ed.2d 173 (1985); see also Baldrige v. Shapiro, 455 U.S. 345, 352-53, 102 S.Ct. 1103, 1108-09, 71 L.Ed.2d 199 (1982). These are the two questions before us.

A The First Question

The first question is whether or not the special tax statute is an "exempting statute." The answer is clear. The tax statute falls squarely within FOIA Exemption 3. Exceptions aside, the tax statute "requires that" return information "be withheld ... in such a manner as to leave no discretion on the issue." 5 U.S.C. § 552(b)(3)(A); see also De Salvo v. IRS, 861 F.2d 1217, 1221 n. 4 (10th Cir.1988) (26 U.S.C. § 6103 is an Exemption 3(A) statute); Linsteadt v. IRS, 729 F.2d 998, 1000 (5th Cir.1984) (same); Fruehauf Corp. v. IRS, 566 F.2d 574, 578 & n. 6 (6th Cir.1977) (same). The relevant exception, read together with the rest of the statute, both "refers to particular types of matters to be withheld" (namely, "taxpayer identity information") and "establishes particular criteria for withholding" (namely, that the IRS may consider release only where it would help notify taxpayers of refunds due, and, even then, only to the media). 5 U.S.C. § 552(b)(3)(B); see also De Salvo, 861 F.2d at 1221 & n. 4 (26 U.S.C. § 6103, including exceptions, is an Exemption 3(B) statute); Grasso v. IRS, 785 F.2d 70, 77 (3d Cir.1986) (same); Chamberlain v. Kurtz, 589 F.2d 827, 838-39 (5th Cir.) (same), cert. denied, 444 U.S. 842, 100 S.Ct. 82, 62 L.Ed.2d 54 (1979). Thus, we answer the first question affirmatively.

B The Second Question

The second question is whether the taxpayers' street addresses fall within the protection of the special tax statute. Aronson argues that they do not. He points to the exception in the tax statute that permits the IRS to disclose "taxpayer identity information to the press and other media" to help find taxpayers owed refunds. And, he says that this "exception" requires the IRS to disclose that information here. To win this argument, Aronson must convince us both (1) that he falls within the statute's term "press and other media" (for the statute permits disclosure only to them), and (2) that the IRS acted outside its permitted power in not granting disclosure. We do not see how Aronson can make either of those showings.

1. The Standard of Review. Before turning to the merits of Aronson's argument, we consider a conceptual question of administrative law, the answer to which will sometimes affect the outcome in a FOIA Exemption 3 case: To what extent should a court (reviewing an agency's decision not to disclose) defer, or give special weight, to the agency's (here, the IRS's) answers to the kinds of legal questions mentioned in the preceding paragraph, namely the question of statutory interpretation and that of abuse of discretion? Ordinarily, a court would give special weight to the agency's interpretation of the language of the statute (such as the words "press and other media") the agency administers, where the interpretative question (as here) involves a minor, interstitial matter, closely related...