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Federal Lawsuit Filed Today Against IRS Is Part of Broad Effort to Provide Information About Agency’s Audit Activities to the Public

April 14, 2005

Federal Lawsuit Filed Today Against IRS Is Part of Broad Effort to Provide Information About Agency’s Audit Activities to the Public

IRS Reverses 30 Years of Open-Records Policy, Claims Homeland Security Concerns Prevent Release of Documents

WASHINGTON, D.C. – The Internal Revenue Service is illegally withholding information about its operations, claiming without substantiation that some of the unclassified information would compromise homeland security if released to the public, according to a federal lawsuit filed today by Public Citizen on behalf of open-government scholars.

The lawsuit is part of an ongoing effort by the Transactional Records Access Clearinghouse (TRAC) to obtain statistical information from the IRS about enforcement actions. Reversing 30 years of policy, the IRS under the Bush administration has stonewalled requests for public disclosure of such information.

The IRS for many years has released scores of statistical tables and other information that allowed the American people, Congress, tax lawyers and other interested parties to make their own judgments about how the agency is enforcing the tax laws. But now the IRS is refusing to make public much of this information. In the past, researchers used such information to demonstrate, for example, that wealthy taxpayers are much more successful than poor ones when it comes to reducing the amount of taxes and penalties that the IRS initially claimed they owed in enforcement actions.

Plaintiffs in today’s lawsuit are Susan B. Long and David Burnham, co-directors of TRAC, a non-partisan research center at Syracuse University that disseminates federal government statistical information that is then used by scholars, journalists, public interest groups, lawyers and others to analyze the activities of the government. They are represented in the lawsuit by Scott Nelson of the Public Citizen Litigation Group, which has litigated more than 300 cases under the Freedom of Information Act (FOIA).

“Because a fair, effective and open tax system is so important to the nation, the IRS’s new wave of secrecy about its operations is deeply disturbing and if left uncorrected could well undermine public confidence along with taxpayer compliance,” said Long, associate professor of management information and decision sciences at Syracuse University’s Whitman School of Management. Long has been assessing agency practices for more than 30 years.

“From my research, it appears the IRS is reverting to its habits in the 1950s and 1960s, when secrecy was the norm and the problems of corruption and political abuse were later uncovered by the Congress,” Burnham said. An associate research professor at the Newhouse School of Public Communications at Syracuse, Burnham is a former New York Times investigative reporter and the author of “A Law Unto Itself: Power, Politics and the IRS,” a widely recognized 1990 book about the IRS.

The lawsuit filed today requests information about the IRS’s databases and programs used to generate reports and tabulate statistics. That information would allow Long and Burnham to fully identify IRS record-keeping systems that the agency has long used to provide its senior managers with data about its actual performance.

Despite a consent decree from prior litigation that requires the IRS to make statistical information available to TRAC on a regular, ongoing basis, the IRS has recently balked at releasing the data, asserting that it would have to be specially compiled since the agency no longer keeps basic statistics about audits, appeals and collection activities that would support the agency’s broad assertions about IRS current practices.

Long and Burnham submitted three FOIA requests in November 2004 for information about the IRS’s database, all of which were denied. In two cases, the IRS sent back letters claiming the requested documents had been designated for “Internal Use” only. Nonsensically, the letters said, “We are not [emphasis added] denying the release of the document; it is an agency policy not to release ‘Internal Use’ documents to the public.”

In denying the other request – which sought release of an IRS manual describing information systems used to compile statistical information and numerical measures used to analyze the agency’s operations – the IRS cited “new federal security requirements.” That particular document had in the past been available on the IRS’s public Web site.

“As tax day 2005 looms, it appears that there are now three certainties: death, taxes and improper government reliance on national security as a pretext to stonewall FOIA requests,” said Nelson, the Public Citizen attorney who filed the suit. “Our lawsuit won’t do anything about the first two, but we hope it can help stop the last one.”

The lawsuit claims that there is no valid exemption under FOIA for the IRS’s refusal to release the documents – that agency officials have no authority to designate documents for “Internal Use” only and that the documents fall far outside the scope of statutorily protected “critical infrastructure information” related to homeland security. The plaintiffs also are asking for a court finding that would be a first step toward subjecting responsible agency officials to possible disciplinary action for arbitrarily and capriciously withholding these documents from the public.

To read the lawsuit, click here. For more information about TRAC, click here. For more information about Public Citizen, click here.