When the IRS is attempting to enforce the tax laws, it will ask for documents and information from a taxpayer. Just as it is important for the IRS to obtain information from the taxpayer, it is equally important for the taxpayer to obtain information from the IRS. This blog post will discuss one alternative for accessing IRS documents and information, the Freedom of Information Act, 5 U.S.C. 552. A Freedom of Information Act request should be considered in any situation where a taxpayer is interacting with the IRS, including an audit of tax returns, collection of delinquent taxes, assessment of penalties, determination of a responsible person for payroll taxes, request for delinquent tax returns or a criminal tax investigation.
The Freedom of Information Act (FOIA) provides any person the right to access federal agency records or information. FOIA applies to records either created or obtained by an agency and under agency control at the time of the FOIA request. Although all IRS records are subject to FOIA requests, FOIA does not require the IRS to release all documents that are subject to FOIA requests. The IRS may withhold information pursuant to nine exemptions and three exclusions contained in the FOIA statute. In addition, Internal Revenue Code Section 6103 requires the IRS to maintain the confidentiality of a taxpayer’s return and return information.
A FOIA request must be in writing, sent to the IRS Disclosure Central Processing Unit and include the following:
- A statement that the request is being made under the Freedom of Information Act.
- Description of the records that are being sought as specifically as possible.
- The name and address of the requester.
- A commitment to pay any fees which may apply.
In addition, the FOIA request may include the requester’s telephone number, a cap on the amount of fees to be paid without additional authorization, format for production of the information to be provided and a request for expedited when the requestor can show a compelling need.
The IRS has 20 business days after receiving a FOIA request to determine whether it will comply with the request. The IRS is allowed to extend the response time by an additional 10 days when it needs more time to collect the records from a location, review a large number of records, consult with other agencies or any other unusual circumstance. However, the IRS must notify the requester of the additional time needed. If the request is denied, in whole or part, the IRS must provide the requester the basis for the denial and the requester’s right to appeal any denial.
Under the Act the IRS may withhold records that fall under one of the nine statutory exemptions:
- Classified documents pertaining to national defense and foreign policy.
- Internal personnel rules and practices.
- Information exempt under other laws.
- Trade secrets and confidential commercial or financial information.
- Inter-agency or intra-agency memorandums or letters.
- Personal privacy relating to personnel, medical and similar information, the disclosure of which would constitute an unwarranted invasion of personal privacy.
- Information compiled for law enforcement purposes.
- Information that is contained in or related to examination, operating, or condition reports prepared by, on behalf of, or for the use of an agency responsible for the regulation or supervision of financial institutions.
- Geological and geophysical information, data, and maps, concerning wells.
FOIA also has three special categories of excluded documents:
- Records related to an ongoing criminal investigation.
- Records regarding confidential informants maintained by IRS criminal law enforcement.
- Records maintained by the FBI which pertain to foreign intelligence, counterintelligence, or international terrorism.
A requester may administratively appeal any portion of a FOIA request that was denied by sending an appeal letter to the designated appeal office. The appeal must identify the FOIA request that is being appealed, and include the FOIA request number assigned by the IRS and the name and address of the requester. An appeal should also include any facts or authorities supporting the requester's arguments for disclosure of the withheld documents. The FOIA regulations require that an appeal be postmarked within 90 days after the date of the letter denying access to the information. The IRS is required to make a decision on an appeal within 20 business days after receiving the appeal letter. It is possible for IRS to extend the time for responding by an additional 10 days for unusual circumstances.
If the IRS denies the appeal, the requester may file a lawsuit challenging the denial in U.S. District Court. In a court case, the IRS has the burden of justifying the withholding of documents.
A FOIA request is a great tool for accessing IRS information and should be used any time a taxpayer is interacting with the IRS.
For any questions on this or any other tax-related matter, please feel free to contact me at (214) 749-2456 or email@example.com.