T. Keith Fogg v. Internal Revenue Service

Background

T. Keith Fogg submitted a request under the Freedom of Information Act (FOIA), 5 U.S.C. § 552, seeking portions of Section 21.1.3.3 of the Internal Revenue Manual. That section concerns authentication procedures for people submitting or having submitted a Power of Attorney or Tax Information Authorization, which can authorize a third party to access another taxpayer’s sensitive information.

The Internal Revenue Service denied the request and denied Fogg’s administrative appeal. During the lawsuit, the IRS revised the manual several times and released some previously withheld material. Five redactions remained: a note under Section 21.1.3.3(3), an exception under that subsection, all of subsections (4) and (5), and approximately two lines under subsection (8).

The parties filed cross-motions for summary judgment, a procedure allowing judgment without a trial when there is no genuine dispute over a material fact and a party is entitled to judgment under the law. In an earlier ruling, the court granted summary judgment to the IRS. The Eighth Circuit reversed and remanded for an in-camera review, meaning a private court review, of the withheld material because the IRS’s earlier affidavit was insufficient to establish the basis for withholding.

On remand, the court denied Fogg’s request to re-brief summary judgment, denied the IRS’s request to submit a supplemental affidavit for private review, and allowed the IRS to file a public supplemental affidavit from another affiant. The court then reviewed the withheld material in camera.

FOIA Exemption 7(E)

The IRS relied on FOIA Exemption 7(E), which protects records compiled for law-enforcement purposes when disclosure would reveal techniques or procedures for law-enforcement investigations or prosecutions and could reasonably be expected to risk circumvention of the law.

The court found that the redactions satisfied each requirement. First, although the IRS performs both law-enforcement and administrative functions, the withheld material was compiled for law-enforcement purposes. The redactions addressed exceptional situations involving an increased risk of fraud or identity theft and instructed IRS employees when to require additional authentication and when a third party had provided enough information to obtain access.

Second, the court found that disclosure would reveal law-enforcement techniques and procedures. The redactions described how IRS employees confirm or disprove suspicions about the legitimacy of third-party requests, including what information they seek in particular situations.

Third, the court found that disclosure could reasonably be expected to risk circumvention of the law. According to the court, releasing the red flags and specific questions used by IRS employees could help potential fraudsters tailor their conduct or answers to avoid detection.

The court did not consider whether the redactions were protected as law-enforcement guidelines because the IRS had not asserted that theory in its original motion. The court also found that none of the withheld material was reasonably segregable from the nonexempt portions, meaning that no reasonably separable portions could be released.

Disposition

The court held that the IRS appropriately withheld the remaining material under FOIA Exemption 7(E). Judge Susan Richard Nelson granted the Defendant’s Motion for Summary Judgment and denied the Plaintiff’s Cross Motion for Summary Judgment. The order directed that judgment be entered accordingly.