Green v. IRS

• Citation: 556 F. Supp. 79
• Decision Date: 16 December 1982
• Docket Number: No. L 81-2.,L 81-2.
• Parties: Dale H. GREEN, Plaintiff, v. INTERNAL REVENUE SERVICE, and James Caldwell, District Director, Defendants.
• Court: U.S. District Court — Northern District of Indiana

556 F. Supp. 79

Dale H. GREEN, Plaintiff, v. INTERNAL REVENUE SERVICE, and James Caldwell, District Director, Defendants.

No. L 81-2.

United States District Court, N.D. Indiana, Hammond Division.

December 16, 1982.

Dale H. Green, pro se.

R. Lawrence Steele Jr., U.S. Atty., Hammond, Ind., Mitchell R. Berger, Tax. Div., U.S. Dept. Justice, Washington, D.C., for defendants.

MEMORANDUM AND ORDER

ALLEN SHARP, Chief Judge.

Plaintiff, Dale H. Green, purports to bring this action pursuant to the Freedom of Information Act (FOIA) and the Privacy Act against the Internal Revenue Service (IRS) and its District Director. The relief requested apparently includes access to and correction of various IRS records pertaining to plaintiff's tax returns and status as a tax protestor.

The plaintiff filed his original complaint on January 12, 1981. On March 11, 1981, plaintiff amended his complaint in response to an order requiring a more definite statement. The Amended complaint restricted the scope of this action to a document request addressed to the IRS dated September 26, 1980 though incorrectly identified as September 25, 1980 in the amended complaint. In answer to plaintiff's amended complaint, defendants admitted they withheld from plaintiff two documents that fell within the scope of his request and that they had deleted the names of employees in the Service's Criminal Investigation Division from five other documents that were otherwise released to plaintiff in full. Seven affirmative defenses were interposed in support of the Service's nondisclosure of the two full documents and parts of five others, with each substantive defense correlated to specific documents. The defendants have moved for summary judgment. In plaintiff's response to defendants' motion for summary judgment, the plaintiff, pro se, admitted that the deletions of the names of the IRS agents on the five documents was valid. Therefore, the only issues remaining before this Court on defendants' motion for summary judgment are the nondisclosure of the two remaining documents and the requested amendment of plaintiff's IRS records.

The following material facts are not in dispute.

Plaintiff Dale H. Green, at all relevant times, has been the subject of an investigation by the Indianapolis District of the IRS for possible civil violations of the Internal Revenue Code for taxable year 1977. One area of this investigation pertains to Green's participation in or affiliation with the illegal tax protest movement. Prior to this lawsuit plaintiff made numerous requests for disclosure of documents maintained by the IRS. In response to those requests, the IRS has supplied numerous documents.

By letter dated September 26, 1980, plaintiff requested the Indianapolis District of the Service to disclose, ostensibly pursuant to the FOIA and the Privacy Act, various documents including records containing his name, several forms, and a copy of the Service's Illegal Tax Protestors Training Manual. On October 1, 1980, the Indianapolis District responded to this request, asking for verification that plaintiff had paid for copies of documents previously provided to him. The District also inquired whether plaintiff wanted copies of all documents pertaining to him, or copies of only those documents not furnished in response to his earlier requests.

In a reply letter dated October 8, 1980, which the IRS received October 27, 1980, plaintiff submitted payment for copies he had received and stated that he sought only:

(1) Materials pertaining to his tax years 1975-1980 which the IRS had not disclosed previously;

(2) Monthly or quarterly surveillance reports on Dale H. or Loma G. Green;

(3) Documents pertaining to FBI Cointelpro projects or IRS Special Services Staff; and

(4) Form 3949, IRM 9383.6 and "any other materials not previously submitted."

By letter dated November 6, 1980, the IRS responded to plaintiff's requests, providing all material sought that were found to exist, except two documents that were withheld in full and five documents that were disclosed fully except for the deletion of the names of IRS CID employees. The FOIA exemptions permitting nondisclosure were made plain in the letter from the IRS.

One of the two documents withheld in full was a handwritten attachment to Form 3949, which is a "Criminal Investigation Information Item." The attachment contains a summary of information supplied to the Service by a confidential informant in connection with the ongoing investigation of plaintiff. The information pertains to plaintiff and to third party taxpayers. The other document withheld in full from plaintiff was a letter from the Indianapolis District Counsel of the Service to the United States Attorney for the Northern District of Indiana. That letter requests the United States Attorney to initiate legal proceedings to enforce an IRS summons that had been served on an officer of the State Bank of Remington in conjunction with the ongoing investigation of plaintiff.

The FOIA represents an attempt to foster citizen access to most categories of government records. It provides that all documents should be disclosed to the public, upon proper request, unless specifically exempted by the Act itself. See E.P.A. v. Mink, 410 U.S. 73, 79, 93 S.Ct. 827, 832, 35 L.Ed.2d 119 (1973). The exemptions are set forth in 5 U.S.C. § 552(b). Section 552(b)(3) of Title 5, United States Code protects from disclosure documents that are specifically designated as exempt by statute. Section 6103 of Title 26, United States Code is a statute within the meaning of Section 552(b)(3) and thus controls the disclosure of the first document at issue in this case. See, Chamberlain v. Kurtz, 589 F.2d 827 (5th Cir.), cert. den., 444 U.S. 842, 100 S.Ct. 82, 62 L.Ed.2d 54 (1979); Barney v. Internal Revenue Service, 618 F.2d 1268 (8th Cir.1980); Fruehauf Corp. v. Internal Revenue Service, 566 F.2d 574 (6th Cir. 1977).

Section 6103 of the Internal Revenue Code of 1954 regulates and largely proscribes the disclosure of tax returns or return information unless Section 6103 specifically designates a person as a proper recipient of return information, the general statutory rule that returns and return information remain confidential prevails. 26 U.S.C. § 6103(b)(2). This antidisclosure statute, thus, takes precedence over the FOIA where return information is sought. Congressional intent to constitute Section 6103 the exclusive means of obtaining access to return information appears clearly from a Senate Report that states:

The Committee felt that returns and return information should generally be treated as confidential and not subject to disclosure except in those limited situations delineated in the newly amended Section 6103 where the Committee decided that disclosure was warranted. S.Rep. No. 94-938, 94th Cong., 2nd Sess., at 317-318, U.S.Code Cong. & Admin.News 1976, pp. 2897, 3747.

But for narrow exceptions, no one may obtain the tax returns or return information of a third party, although Code Section 6103(e)(1) affords a taxpayer access to his own tax return. Even the taxpayer, however, may not obtain "return information" relating to him except under highly circumscribed conditions. Code Section 6103(e)(7) permits taxpayer inspection of his own "return information" only if "such disclosure would not seriously impair Federal tax administration."

In a leading case, the United States District Court for the District of Columbia disposed of the apparent conflict between the contrary disclosure policies of Section 6103 and of the FOIA by finding that Section 6103 overrides the FOIA when access is sought to tax return information. Zale Corp. v. Internal Revenue Service, 481 F.Supp. 486 (D.D.C.1979). The Zale outcome recently was endorsed by the Southern District of Indiana. Wiley F. Green II v. Internal Revenue Service, No. IP 80-646-C, Order and Memorandum of March 23, 1981. In Zale, Judge Gesell compared the rationale of Section 6103 and of FOIA and concluded that since Section 6103 was a later enacted and more specific statute which pertained solely to tax returns and return information, it must be viewed as the state controlling access to tax return information. 481 F.Supp. at 487. Judge Gesell found that the purpose of Section 6103 was to restrict access to a few named or described persons, in a marked and significant departure from the FOIA's general rule of disclosure to the public. The court also noted the elaborate detail of Section 6103, which it identified as a further difference from the generalized structure of the FOIA, and stated that if the FOIA were to control access to tax return information, it would render Section 6103 meaningless. Id.

After concluding that Section 6103 was the sole standard governing release of tax return information, Judge Gesell considered the applicable standard of review. Id. He found that review was not foreclosed since Congress had not specifically barred it and because the Service's standards for exercising its discretion were well set out. Id. However, the court also recognized that the discretion vested in the Service by what is now Section 6103(e)(7) is quite broad and determined that the agency decision on "impairment of Federal tax administration" was to be accepted so long as that determination was rational and had support in the record. Id. The court found such support in two affidavits which had been submitted by the IRS, which stated that the materials sought by Zale constituted tax return information whose disclosure would seriously impair a tax investigation. Id., at 487, 490-491.

The Zale opinion has been adopted and followed by several courts in cases very similar to the case presently before the Court. Kanter v. Internal Revenue Service, 496 F.Supp. 1004 (N.D.Ill.1980); Cal-Am Corp. v. Internal Revenue Service, 80-1 U.S.T.C. para. 9421, 45 A.F.T.R.2d 80-1576 (C.D.Cal.1980); Wolfe v. Internal Revenue Service, 80-2 U.S.T.C. para....