Greenberger v. Internal Revenue Serv.

• Decision Date: 28 September 2017
• Docket Number: CIVIL ACTION NO. 1:15–CV–3710–AT
• Citation: 283 F.Supp.3d 1354
• Parties: Robert N. GREENBERGER, Plaintiff, v. INTERNAL REVENUE SERVICE, Defendant.
• Court: U.S. District Court — Northern District of Georgia

283 F.Supp.3d 1354

Robert N. GREENBERGER, Plaintiff,

v.INTERNAL REVENUE SERVICE, Defendant.

CIVIL ACTION NO. 1:15–CV–3710–AT

United States District Court, N.D. Georgia, Atlanta Division.

Signed September 28, 2017

David DeCoursey Aughtry, Courtney Hall Moore, Chamberlain, Hrdlicka, White, Williams & Aughtry, Atlanta, GA, for Plaintiff.

Lena Amanti, U.S. Attorney's Office, Atlanta, GA, Kieran O. Carter, Stephen S. Ho, U.S. Department of Justice, Washington, DC, for Defendant.

ORDER

Amy Totenberg, United States District Judge

This Freedom of Information Act ("FOIA")¹ case is before the Court on Defendant Internal Revenue Service's Motion for Summary Judgment [Doc. 38] and Plaintiff Robert Greenberger's Motion for Partial Summary Judgment [Doc. 42]. Mr. Greenberger is an Atlanta-area accountant and the subject of an IRS examination into his preparation of conservation easement partnership returns for some of his clients in 2010, 2011, and 2012.

A conservation easement is a permanent agreement between a property owner and a land trust, non-profit, or government entity through which the owner gives up some of her rights of ownership in order to advance conservation purposes. The easement allows the property owner to claim a federal tax deduction for up to 50 percent of the owner's adjusted gross income (and 100 percent if she is a rancher or farmer). However, according to the IRS, this deduction is sometimes susceptible to abuse, such as when taxpayers "armed with questionable appraisals[ ] take inappropriately large deductions for easements,"² or when promoters "syndicate ownership interests in [a partnership] that owns the real property" to assist investors in "claim[ing] charitable contribution deductions in amounts that significantly exceed the amount invested." Internal Revenue Service, Notice 2017–10 : Listing Notice—Syndicated Conservation Easement Transactions (noting that certain syndicated conversation easement transactions may be "tax avoidance transaction[s]") available at https://www.irs.gov/irb/2017-04_IRB#NOT-2017-10 (last accessed September 26, 2017).

This alleged potential for abuse is what apparently made Greenberger a person of interest to the IRS. Greenberger's records were subpoenaed by the IRS, and the agency's examination remains ongoing, years after it started. In response to the examination, Mr. Greenberger submitted two FOIA requests. In a nutshell, he seeks the IRS's investigation file concerning him. When the IRS failed to respond to Mr. Greenberger's second FOIA request to his satisfaction, he filed this suit to enforce it. During the course of responding to Mr. Greenberger's request and this litigation, the IRS searched for and disclosed the existence of some 27,000 pages of responsive records. It has withheld virtually all of those records by asserting a number of exemptions under FOIA. For example, the IRS claims that almost every document is protected under Exemption 7A, which allows an agency to withhold information connected to an ongoing law enforcement investigation if release would be reasonably likely to interfere with that investigation. 5 U.S.C. § 552(b)(7)(A). The IRS similarly claims it cannot disclose large chunks of documents to Greenberger because they include the tax return information of third parties, and a federal statute— 26 U.S.C. § 6103 —precludes the disclosure of those records. For the reasons stated herein, the Court GRANTS the IRS's Motion and DENIES Greenberger's.

I. Standard for Summary Judgment

The Court may grant summary judgment only if the record shows "that there is no genuine dispute as to any material fact and that the movant is entitled to judgment as a matter of law." Fed. R. Civ. P. 56(a). A factual dispute is genuine if there is sufficient evidence for a reasonable jury to return a verdict in favor of the non-moving party. See Anderson v. Liberty Lobby, Inc. , 477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). A factual dispute is material if resolving the factual issue might change the suit's outcome under the governing law. Id. The motion should be granted only if no rational fact finder could return a verdict in favor of the non-moving party. Id. at 249, 106 S.Ct. 2505.

When ruling on the motion, the Court must view all the evidence in the record in the light most favorable to the non-moving party and resolve all factual disputes in the non-moving party's favor. See Reeves v. Sanderson Plumbing Prods., Inc. , 530 U.S. 133, 150, 120 S.Ct. 2097, 147 L.Ed.2d 105 (2000). The moving party need not disprove the opponent's case; rather, the moving party must establish the lack of evidentiary support for the non-moving party's position. See Celotex Corp. v. Catrett , 477 U.S. 317, 325, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). If the moving party meets this initial burden, in order to survive summary judgment, the non-moving party must then present competent evidence beyond the pleadings to show that there is a genuine issue for trial. Id. at 324–26, 106 S.Ct. 2548. The essential question is "whether the evidence presents a sufficient disagreement to require submission to a jury or whether it is so one-sided that one party must prevail as a matter of law." Anderson , 477 U.S. at 251–52, 106 S.Ct. 2505.

The standard of review for cross-motions for summary judgment does not differ from the standard applied when only one party files a motion, but simply requires a determination of whether either of the parties deserves judgment as a matter of law on the facts that are not disputed.

Am. Bankers Ins. Group v. United States , 408 F.3d 1328, 1331 (11th Cir. 2005). The Court must consider each motion on its own merits, resolving all reasonable inferences against the party whose motion is under consideration. Id. The Eleventh Circuit has explained that "[c]ross-motions for summary judgment will not, in themselves, warrant the court in granting summary judgment unless one of the parties is entitled to judgment as a matter of law on facts that are not genuinely disputed." United States v. Oakley , 744 F.2d 1553, 1555 (11th Cir. 1984). Cross-motions may, however, be probative of the absence of a factual dispute where they reflect general agreement by the parties as to the controlling legal theories and material facts. Id. at 1555–56.

II. Facts

Robert Greenberger is a certified public accountant with more than thirty years of experience. (Internal Revenue Service's Response to Plaintiff's Statement of Undisputed Material Facts ("IRS's Resp. SMF") ¶ 1.) On or about October 23, 2013, the IRS sent Greenberger a Notice of Examination seeking to determine if Greenberger should be held liable for promoter or preparer penalties in connection with conservation easement partnership returns he prepared for clients in 2010, 2011, and 2012. (Id. ¶¶ 3–4, 7; Declaration of William E. Buchanan ¶ 6.) Specifically, the IRS "is examining [Greenberger's] conduct to determine whether he may have violated certain provisions of the [Tax] Code in connection with his involvement with conservation easement partnerships or arrangements or while preparing federal tax returns for conservation easement partnerships or ... on which a charitable donation deduction was claimed arising from a conservation easement." (Declaration of Deborah Fitzpatrick ("Fitzpatrick Decl.") ¶ 3.)³ The IRS then "audited conservation partnership returns that [Greenberger] prepared for 2010, 2011, and 2012." (IRS Resp. SMF ¶ 8.) As the examination proceeded, Greenberger claims that his relationship with his clients deteriorated. (Robert Greenberger's January 6, 2016 Declaration ¶¶ 44–49.) On January 27, 2014, Greenberger sent his first FOIA request to the IRS concerning its examination. (IRS's Resp. SMF ¶ 15.) That request is not the subject of this suit. On or before August 4, 2015, the IRS referred the investigation to the Department of Justice's Tax Division. (Id. ¶ 20.)

Greenberger sent a second FOIA request on August 25, 2015 to the IRS, seeking access to records regarding the IRS's investigation of him. (Plaintiff's Response to Defendant's Statement of Undisputed Material Facts (Pl.'s Resp. SMF) ¶ 6; Doc. 4, Ex. A.)

The FOIA request asked for the following records:

• Any and all information that shows that Robert N. Greenberger made or furnished or caused another person to make or furnish (in connection with such organization or sale) a statement with respect to the allowability of any deduction or credit, the excludability of any income, or the securing of any other tax benefit by reason of holding an interest in the entity or participating in the plan or arrangement that Robert N. Greenberger knew or had reason to know is false or fraudulent as to any material matter;

• Any and all information that shows that Robert N. Greenberger aided or assisted in, procured, or advised with respect to, the preparation or presentation of any portion of a return, affidavit, claim or other document, and where Robert N. Greenberger knew or had reason to believe that such a portion will be used in connection with any material matter arising under the internal revenue laws, and where Robert N. Greenberger knew that such portion (if so used) would result in an understatement of the liability for tax of another person;

• Any and all information which shows that Robert N. Greenberger participated in tax avoidance transaction(s);

• Any and all information that penalties and injunctions under Internal Revenue Code sections 6694, 6695, 6700, 6701, 7402, 7407 and 7408 for promoting and/or preparing documents are applicable to Robert N. Greenberger;

• Any and all information that shows that Robert N. Greenberger made, created, or took any of the following actions identified in I.R.M. 4.32.2.2.3 to include:

• False statements about the allowability of tax benefits to participants that are contrary to clearly established law.

• Misuse of IRC sections to produce clearly unintended results;

• Intentional manipulation of potential ambiguities of the tax

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