Page 4 - Making FOIA Requests To The IRS: Overview Of The Basic Procedures And Exemptions, And Issues For Partnerships

The practitioner may want to make
a broad FOIA request for all of the
inf in the IRS’s les, but
there o may be times where the practitioner focuses on the speci c information that he or she needs to expedite the processing of the request.
ormation
als
TAX CONTROVERSY CORNER
agent and the preliminary direction of the exam and were exempt from disclosure.
Next, Exemption 552(b)(7) exempts from disclosure investigatory records compiled for law enforcement pur- poses, where production of such records:
(A) Could reasonably be expected to interfere with en-
forcement proceedings;
(B) Would deprive a person of a right to a fair trial or an
impartial adjudication;
(C) Could reasonably be expected to constitute an unwar-
ranted invasion of personal privacy;
(D) Could reasonably be expected to disclose the identity
of a con dential source and, in the case of a record compiled by a criminal law enforcement authority in the course of a criminal investigation, or by an agency conducting a lawful national security intelligence in- vestigation, con dential information furnished only by the con dential source;
(E) Would disclose investigative techniques and proce- dures; or
(F) Could reasonably be expected to endanger the life or physical safety of any individual.
break the law. But it goes further. It exempts from disclosure information that could increase the risks that a law will be violated or that past violators will escape legal consequences. ough the information here does not necessarily provide a blueprint for tax shelter schemes, it could encourage decisions to violate the law or evade punishment.34
Making an FOIA Request
e IRS’s procedures for FOIA requests are found in Reg. §601.702, including instructions as to the form of the request, to whom it is made, time for response, appeal rights, and the right to sue in federal court. Pursuant to Reg. §601.702(c)(4),35 the request must:
Be in writing and signed by the person making the request;
State that the request is made pursuant to FOIA; Be addressed to the local director, attention of “Dis- closure O cer, FOIA Request”36;
Reasonably describe the records requested; Establish the identity of the requester and the right to disclosure;
Provide a return address and indicate if the requester wants copies or only to inspect the originals; regard- less of whether the requester wants copies or only to inspect, a promise to pay fees for the search and for making copies must be included; and
Indicate the category of requester.
e practitioner may want to make a broad FOIA request for all of the information in the IRS’s les, but there also may be times where the practitioner focuses on the speci c information that he or she needs to expedite the processing of the request.
The IRS must respond to the FOIA request within 20 business days of its receipt.37 The IRS likely will first respond with an acknowledgment of the FOIA request and request additional time to respond.38 The practitioner may either treat the IRS’s request for ad- ditional time as a denial and initiate appeal procedures or wait for the IRS to respond. Consenting to the requested extension does not foreclose the right to appeal a later denial.39
As noted, if the IRS does not respond to the FOIA request within the initial 20-day period, the requester may either le suit in U.S. District Court (where the requester resides or the requester’s principal place of business is located, or the District of Columbia) or treat the request as having been denied and send a letter of appeal to the agency. If the IRS denies the request, it will inform the taxpayer of the basis of the decision and
e case of Mayer Brown LLP33 provides an interest- ing illustration of 5 USC §552(b)(7)(E). In that case, a law rm submitted an FOIA request to the IRS seeking documents related to revenue rulings on lease-in/lease- out (LILO) transactions between tax-exempt entities and taxable entities. e court explained how this exemption ts into the enforcement of the tax laws and that the IRS does not have to show that a circumvention of the law would occur, merely that it has a reasonable expectation that disclosure would risk circumvention of the law:
Although the settlement guidelines requested are not ‘how to’ manuals for law-breakers, the exemp- tion is broader than that. Exemption 7(E) clearly protects information that would train potential violators to evade the law or instruct them how to
52 JOURNAL OF PASSTHROUGH ENTITIES CCH Draft JANUARY–FEBRUARY 2018