The Freedom of Information Act
In 1966, Congress enacted 5 U.S.C. 552, the Freedom of Information Act (“FOIA”), providing the right to request federal agency records or information. Executive branch agencies are subject to FOIA, while state governments, the courts, Congress, and private citizens are not. Because the Department of Treasury is an agency under the executive branch of the federal government, IRS records are subject to FOIA requests.
A FOIA request may be useful after an unagreed audit result by the IRS as it may provide insight into the IRS auditor’s determination. The responsive documents may include the notes and memoranda prepared by the auditor that summarize the facts and legal authority relied upon by the auditor. If the auditor obtained or summonsed relevant documents from a third party, the responsive documents may include them as well. Such information can be invaluable if you choose to appeal the examination findings because an IRS appeals officer will review these documents to determine the IRS’ and your probability of success if the dispute were to go to court.FOIA Exemptions and exclusions
There are nine exemptions and three exclusions in the statute.
Nine Exemptions to FOIA
- Classified information related to national defense and foreign policy
- Information regarding internal personnel rules and practices of the agency
- Information that is prohibited from disclosure by another federal law
- Trade secrets and confidential commercial financial information
- Privileged inter-agency or intra-agency communications
- Personal private information
- Information gathered by or related to law enforcement
- Information concerning the supervision of financial institutions
- Geological information
Three Exclusions from FOIA
- Information related to an investigation initiated by law enforcement
- Records regarding informants of criminal law enforcement agencies
- Foreign intelligence or counterintelligence, or international terrorism records
Do not let the long list of exemptions and exclusions deter you. The IRS, not the taxpayer, has the burden of justifying why it did not disclose requested information in a FOIA request.FOIA Request requirements
If you are making a FOIA request, make sure it fully satisfies all of the requirements under Treasury Regulation Section 601.702(4):
- FOIA requests must be in writing and signed by the person making the request.
- They must include a statement that the request is being made pursuant to FOIA, 5 U.S.C. 552, and its regulations.
- They must be addressed to and mailed to the office of the IRS official who is responsible for the control of the records requested.
- FOIA requests must reasonably describe the records in sufficient detail so that IRS employees can locate the documents without placing unreasonable burden on the IRS. Typically, you should include at least:
- Taxpayer identification number;
- Subject matter;
- Location; and
- Tax years at issue.
- Because the IRS has access to extremely sensitive personal information, FOIA requests must establish the identity and the right of the person making the request to disclose records. While the Internal Revenue Manual states a Form 2848, Power of Attorney and Declaration of Representative, is sufficient, to avoid a denial, tax practitioners who have an executed Form 2848 should also include a Form 8821, Tax Information Authorization.
- They must include a mailing address for the IRS’ determination.
- They must state whether the requester would like to inspect the records or have copies furnished without first inspecting them.
- Requesters must state that they agree to pay the fees for search, duplication, and review, and include a maximum amount they are willing to pay. Requesters that have justifications for requesting a reduction or waiver of such fees, like nonprofit organizations, should state the justification in the request.
- FOIA requests must identify the category of the requester and state how the records will be used if the requester falls under any of the following categories:
- Commercial user;
- News media;
- Educational institution; or
- Noncommercial scientific institution requester.
FOIA requires the IRS to determine whether to comply with the request within 20 days after it receives the request. The IRS will notify you if any of the requirements have not been met. If the IRS denies your FOIA request, it must tell you why the request was denied and how you can appeal the denial.
If you have concerns about a potential tax dispute, contact the tax attorneys at the Ben-Cohen Law Firm. Our Los Angeles tax attorneys have the tools and the determination to help you reach the best possible outcome.