The Freedom of Information Act, also called FOIA, found in 5 U.S.C. 552 gives any person the right to request access of federal agency records or information within the scope of the Act. If you are under audit or dealing with a Revenue Officer, it may be beneficial to submit a FOIA request. Most importantly, the FOIA applies to records either created or obtained by the Internal Revenue Services and under agency control at the time of the FOIA request. While agencies within the executive branch of the federal government are subject to the FOIA, state governments, the courts, Congress and private citizens are not bound by the rules contained in the Act.
Exceptions to the Requirement to Produce Records under FOIA
FOIA does not require the IRS to release all documents that are subject to FOIA requests. Under the FOIA statute, the IRS may withhold production of information pursuant to nine exemptions and three exclusions. The FOIA exemptions are discussed in more detail below. It is important to know what will be and what will not be produced by the IRS under FOIA. The FOIA will inform a taxpayer of a great deal of information, but some pieces of information will be withheld by the IRS.
Making a Formal IRS FOIA Request
The FOIA request must be signed and in writing and sent to the IRS Disclosure Central Processing Unit, which is found here: IRS FOIA Requests. Letters requesting records under the FOIA can be short and simple, and generally a one page, signed request is sufficient. In addition, a FOIA request that follows the IRS’s specific procedures can expect to receive a faster response.
Elements of a FOIA request:
There are four fundamental elements to an FOIA request letter:
- The request letter should indicate that it is being made under the Freedom of Information Act.
- The request letter should identify the specific records that are being sought as specifically and precisely as possible, including tax years, forms and cases.
- The name and address of the requester must be included. As is with the IRS, the authority of the requester to receive records must be established with a power of attorney.
- The request letter should state the requesters commitment to pay any fees which may apply.
Requirements for IRS Responses
The IRS is required to determine within 20 business days after the date of receipt of a request whether to comply with the request. The IRS must provide the requester with reasons if the request is denied in whole or in part including any code provisions. In addition, the IRS must provide information about the right to appeal any adverse determination.
Extension of Time to Respond
The FOIA allows the IRS to extend the 20-day statutory time limit by 10 additional days, which is often the case. The IRS will extend the response period for reasons such as the need to collect records from field locations and review large numbers of records. The IRS must notify requesters of any statutory extensions which is usually done via a letter response to the requester. The IRS may also extend its time to respond based on the amount of material withheld or on the resources devoted to review.
The Act allows the IRS to withhold various categories of documents. The IRS states that exemptions from disclosure protect against the disclosure of information that would harm national security, the privacy of individuals, the proprietary interests of business, the functioning of the government.
Exemption 1. Classified Documents Pertaining to National Defense and Foreign Policy
The first FOIA exemption permits the withholding of matters that are in the interest of national defense or foreign policy and which are in fact properly classified under such executive order. IRS does not generally deal with these types of matters meaning this is rarely used.
Exemption 2. Internal Personnel Rules and Practices
The second exemption covers matters related solely to IRS’s internal personnel rules and practices.
Exemption 3. Information Exempt Under Other Laws
The third exemption incorporates into the FOIA other laws that restrict the availability of information. Internal Revenue Code (IRC) Section 6103 governs the disclosure of tax returns and return information.
Exemption 4. Trade Secrets and Confidential Commercial or Financial Information
The fourth exemption protects from disclosure two types of information: Trade secrets and confidential commercial or financial information.
Exemption 5. Inter-Agency or Intra-Agency Memorandums or Letters
The fifth exemption applies to inter-agency or intra-agency memorandums or letters which would not be available by law to a party other than an agency in litigation with the agency.
Exemption 6. Personal Privacy
The sixth exemption applies to personnel, medical, and similar files to protect against an unwarranted invasion of personal privacy.
Exemption 7. Law Enforcement
The seventh exemption allows agencies to withhold records or information compiled for law enforcement purposes, but only to the extent that the production of such records but only if disclosure would cause a specific, outlined harm to occur.
Exemption 8. Financial Institutions
The eighth exemption forbids disclosure of information that is for the use of an agency responsible for the regulation or supervision of financial institutions.
Exemption 9. Geological Information
The ninth exemption protects geological and geophysical information, data, and maps, concerning wells.
The FOIA also contains three special protection rules to treat especially sensitive records as not subject to the FOIA.
FOIA Exclusion 1
The IRS may exclude from production documents or information that relates to an investigation involving a possible violation of criminal law. Furthermore, the subject of the investigation must not already be aware that the investigation is underway. The IRS rationale is that disclosure of the existence of the records could reasonably be expected to interfere with enforcement proceedings. In other words, the IRS response will not reveal that it is conducting such an investigation.
FOIA Exclusion 2
IRS is not required to confirm the existence of informant records maintained by the IRS records unless the informant’s status has been officially confirmed.
FOIA Exclusion 3
The third exclusion covers records maintained by the Federal Bureau of Investigation pertaining to foreign intelligence, counterintelligence, or international terrorism. This is also rarely used by the IRS.
If you may be interested submitting a formal FOIA request to the IRS, please call us today to discuss you options.