UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA

ARGLYE SYSTEMS INC,

Plaintiff, v. Civ. Action No. 21-16 INTERNAL REVENUE SERVICE, (EGS) Defendant.

MEMORANDUM OPINION

This case arises out of Freedom of Information Act

(“FOIA”),

, requests Plaintiff Argyle Systems,

Inc. (“Argyle”) made to the Internal Revenue Service (“IRS”).

See generally Compl., ECF No. 1.

Pending before the Court are the IRS’s Motion for Summary

Judgment and Argyle’s Cross-Motion for Summary Judgment. Upon

careful consideration of the motions, the oppositions and

replies thereto, the applicable law, the entire record, and for

the reasons stated below, the Court GRANTS the IRS’s Motion for

Summary Judgment, ECF No. 16, and DENIES Argyle’s Cross-Motion

for Summary Judgment, ECF No. 18.

I. Factual Background

The following facts are not in dispute. On or about October

9, 2020, Argyle submitted a FOIA request in which it sought

“[a]ny and all correspondence, communications, files, documents,

1 and records in any form, including hard copies and

electronically stored information, evidencing, reflecting or

pertaining to agency records” for nine categories of agency

records:

(1) Reporting Agent Authorization forms, set forth in IRS form 8655, and submitted to IRS between January, 2020 and the present.

(2) Reporting Agent’s Lists (“RAL”), as described in Internal Revenue Manual (“IRM”) Part 21, Section 21.3.9.3.1, created between January 1, 2020 and the present.

(3) RAF0940I – RAF Snapshot Reports generated between January 1, 2020 and the present.

(4) RAF41 listings, reports, and output files, as described in IRM Part 21, Section 21.3.9.10.3, generated between January 1, 2020 and the present.

(5) RAFREPT AGTFIL01 – Agent File(s), as described in IRM Part 21, Section 21.3.9.10.3, generated between January 1, 2020 and the present.

(6) RAFREPT AGTRPT01 – Agent File Report(s), as described in IRM Part 21, Section 21.3.9.10.3, generated between January 1, 2020 and the present.

(7) Any and all RAF26 output files, as described in IRM Part 21, Section 21.3.9.10.4, generated between January 1, 2020 and the present.

(8) Any and all RAF70 listings, reports, and output files, as described in IRM Part 21, Section 21.3.9.10.5, generated between January 1, 2020 and the present

(9) Any and all RAF08 output files and reports, as described in IRM Part 21, Section

2 21.3.9.10.6, generated between January 1, 2020 and the present.

Compl., ECF No. 1 ¶ 14. The request stated that it “specifically

does not include documents or information evidencing, reflecting

or pertaining to Taxpayer returns, income or payments of tax

liabilities.”

In response, the IRS provided records responsive to Item 3.

Def.’s Brief in Support of the IRS’s Mot. for Summ. J. (“Def.’s

Mot.”), ECF No. 16-2 at 1. 1 The IRS contends that the records

sought in the remaining Items are categorically exempt from

disclosure pursuant to FOIA Exemption 3 in conjunction with

(a), and partially exempt based on FOIA exemption

6. See

The parties do not dispute that the remaining items in

Argyle’s FOIA request can be categorized as follows: (1)

Reporting Agent (“RA”) Authorization, Form 8655; and (2) Reports

generated from an IRS database—the Reporting Agents File

(“RAF”)—containing information derived from the Form 8655. Pl.’s

Counter-Statement of Disputed Facts, ECF No. 18-1 ¶ 40. Revenue

Procedure 2012-32 defines a RA as “an accounting service,

franchiser, bank, service bureau, or other entity authorized to

perform on behalf of a taxpayer one or more of the acts

1 When citing electronic filings throughout this Opinion, the Court cites to the ECF page number, not the page number of the filed document

3 described in this revenue procedure.” I.R.S. Tax Form and

Instructions, Rev. Proc. 2012-13.

II. Standard of Review

FOIA cases are typically and appropriately decided on

motions for summary judgment. Gold Anti–Trust Action Comm., Inc.

v. Bd. of Governors of Fed. Reserve Sys.,

(D.D.C 2011) (citations omitted). Summary judgment is

warranted “if the movant shows [by affidavit or other admissible

evidence] that there is no genuine dispute as to any material

fact and the movant is entitled to judgment as a matter of law.”

Fed. R. Civ. P. 56(a). A party opposing a summary judgment

motion must show that a genuine factual issue exists by “(A)

citing to particular parts of materials in the record . . . or

(B) showing that the materials cited do not establish the

absence . . . of a genuine dispute[.]” Fed. R. Civ. P. 56(c).

Any factual assertions in the moving party's affidavits will be

accepted as true unless the opposing party submits his own

affidavits or other documentary evidence contradicting the

assertion. See Neal v. Kelly,

(D.C. Cir.

1992). However, “the inferences to be drawn from the underlying

facts . . . must be viewed in the light most favorable to the

party opposing the motion.” Matsushita Elec. Indus. Co. v.

Zenith Radio Corp.,

(1986) (internal quotation

marks omitted).

4 An agency has the burden of demonstrating that “each

document that falls within the class requested either has been

produced, is unidentifiable, or is wholly [or partially] exempt

from the Act's inspection requirements.” Goland v. CIA,

(D.C. Cir. 1978) (internal citation and quotation

omitted). In reviewing a summary judgment motion in the FOIA

context, the court must conduct a de novo review of the record,

see

(a)(4)(B); but may rely on agency

declarations. See SafeCard Servs. v. SEC,

(D.C. Cir. 1991). Agency affidavits or declarations that are

“relatively detailed and non-conclusory” are accorded “a

presumption of good faith, which cannot be rebutted by purely

speculative claims about the existence and discoverability of

other documents.”

(internal citation and quotation omitted).

“[T]he Court may award summary judgment solely on the basis of

information provided by the department or agency in declarations

when the declarations describe the documents and the

justifications for nondisclosure with reasonably specific

detail, demonstrate that the information withheld logically

falls within the claimed exemption, and are not controverted by

either contrary evidence in the record nor by evidence of agency

bad faith.” Military Audit Project v. Casey,

(D.C. Cir. 1981) (internal quotation marks and citation

omitted).

5 A. FOIA Exemptions

Congress enacted FOIA to “open up the workings of

government to public scrutiny through the disclosure of

government records.” Judicial Watch, Inc. 375 F. Supp. 3d at 97

(quoting Stern v. FBI,

(D.C. Cir. 1984)

(internal quotation marks and alterations omitted)). Although

the legislation is aimed toward “open[ness] . . . of

government,” id.; Congress acknowledged that “legitimate

governmental and private interests could be harmed by release of

certain types of information,” Critical Mass Energy Project v.

Nuclear Regulatory Comm'n,

(D.C. Cir. 1992)

(internal quotation marks and citations omitted). As such,

pursuant to FOIA's nine exemptions, an agency may withhold

requested information.

(b)(1)-(9). However,

because FOIA established a strong presumption in favor of

disclosure, requested material must be disclosed unless it falls

squarely within one of the exemptions. See Burka v. U.S. Dep't

of Health and Human Servs.,

(D.C. Cir. 1996).

The agency bears the burden of justifying any withholding.

See Bigwood v. U.S. Agency for Int'l Dev.,

(D.D.C. 2007). “Ultimately, an agency’s justification for

invoking a FOIA exemption is sufficient if it appears logical or

plausible.” Judicial Watch, Inc. v. U.S. Dep't of Def.,

(D.C. Cir. 2013) (internal quotation marks omitted).

6 III. Analysis

A. The IRS Conducted an Adequate Search as to Item 3 of the FOIA Request

The IRS moves for summary judgment as to Item 3 of the FOIA

request on the ground that it conducted an adequate search for

this item and did not withhold any records. Def.’s Mot. for

Summ. J. (“Def.’s Mot.”), ECF No. 16-2 at 5. Argyle does not

challenge the adequacy of the search for the records sought in

Item 3 of the FOIA request. See generally Pl.’s Cross-Motion for

Summ. J. (“Pl.’s Mot.”), ECF No. 18. Accordingly, the IRS’s

Motion for Summary Judgment is GRANTED as to Item 3 of the FOIA

request.

B. The IRS Properly Categorically Withheld Return Information Under Exemption 3 in Conjunction with

(a)

The IRS invokes Exemption 3 in conjunction with

(a) to categorically withhold the remaining items in the

FOIA request. Def.’s Mot., ECF No. 61-2 at 6.

Exemption 3 allows an agency to withhold or redact records

that are “specifically exempted from disclosure by statute ...

provided that such statute (A) requires that the matters be

withheld from the public in such a manner as to leave no

discretion on the issue, or (B) establishes particular criteria

for withholding or refers to particular types of matters to be

withheld.”

(b)(3). “To invoke Exemption 3, the

7 government ‘need only show . . . that the material falls

within’ a statute meeting the exemption’s conditions.” DiBacco

v. Dep’t of the Army,

(D.C. Cir. 2019)

(quoting Larson v. Dep’t of State,

(D.C. Cir.

20009). “‘If an agency’s statements supporting exemption contain

reasonable specificity of detail as to demonstrate that the

withheld information logically falls within the claimed

exemption and evidence in the record does not suggest otherwise,

. . . the court should not conduct a more detailed inquiry to

test the agency’s judgment and expertise or to evaluate whether

the court agrees with the agency’s opinions.’”

(quoting

Larson, 565 at 865).

It is well-settled that “Section 6103(a) is an exemption 3

provision.” Electronic Privacy Information Center v. I.R.S.,

(D.C. Cir. 2018). Section 6103 provides that

“[r]eturns and return information shall be confidential . . .

except as authorized by this title.” 2

(a). It

further provides that no United States employee “shall disclose

any return or return information obtained by him in any manner

in connection with his service.”

(a).

Section 6103(b) broadly defines “return information” to

include

2 There is no dispute that the exceptions are inapplicable here.

8 a taxpayer’s identity, the nature, source, or amount of his income, payments, receipts, deductions, exemptions, credits, assets, liabilities, net worth, tax liability, tax withheld, deficiencies, overassessments, or tax payments, whether the taxpayer’s return was, is being, or will be examined or subject to other investigation or processing, or any other data, received by, recorded by, prepared by, furnished to, or collected by the Secretary with respect to a return or with respect to the determination of the existence, or possible existence, of liability (or the amount thereof) of any person under this title for any tax, penalty, interest, fine, forfeiture, or other imposition, or offense.

(b)(2)(A). The phrase “with respect to” in

Section 6103(b)(2)(A) has an “extremely general character.”

Landmark Legal Found. v. IRS,

(D.C. Cir.

2001).

At dispute is whether the submitted Forms 8655 and the

reports are “return information.” Argyle contends that the

requested records are not return information because “by IRS’s

admission, none of the requested records constitutes a return or

a document derived from a return.” Pl.’s Mot., ECF No. 18 at 13.

However, in Landmark, the Court of Appeals for the District of

Columbia Circuit (“D.C. Circuit”) rejected this same argument

when it rejected the “argument that [§6103(b)(2)(A)] protects

only ‘return information,’ and thus can cover only information

that relates to an actual tax return,” Landmark,

; observing that the plaintiff’s “rather wistful point

9 disregards the actual statutory definition, which plainly

reaches far beyond what the phrase ‘return information’ would

normally conjure up,”

Landmark arose out of a “public controversy over claims

that the [IRS] had selectively audited conservative non-profit

organizations in response to requests from outside parties.”

. To investigate the allegations, the plaintiff submitted

a FOIA request for records of external requests to the IRS for

audits or investigations of 501(c)(3) tax-exempt organizations

including the names of the entities/individuals requesting the

audits or investigations, and the names of the 501(c)(3) tax-

exempt organizations for which audits or investigations were

requested. See

. In concluding that the requested

records constituted “return information,” the D.C. Circuit

observed that Ҥ 6103 seems deliberately sweeping . . . reaching

data ‘received by, recorded by, prepared by, furnished to, or

collected by’ the Secretary. It appears to take no interest in

the Secretary’s actual use of the material.” Id. at 1136. The

court further concluded that “the term ‘data’ is correctly

understood to cover the identity of third parties who urge the

IRS to withdraw or reexamine an entity’s tax-exempt status.” Id.

at 1137.

Argyle argues that Landmark does not help the IRS here. As

an initial matter, in its Opposition to Defendant’s Motion for

10 Summary Judgment, and Cross-Motion for Summary Judgment, Argyle

failed to address the IRS’s arguments based on Landmark. See

generally Pl.’s Cross-Mot., ECF No. 18. After the IRS pointed

this out, see Def.’s Reply, ECF No. 20 at 7; Argyle argued that

“the Landmark Court determined only that the documents requested

in that case were exempt because they were submitted ‘with

respect to the determination of the existence, or possible

existence of liability . . . .” Pl.’s Reply, ECF No. 21 at 10.

However, Argyle’s argument is unpersuasive because it entirely

fails to address the D.C. Circuit’s reasoning in Landmark. See

generally Pl.’s Reply, ECF No. 21.

Argyle would have this Court disregard Circuit authority

and instead adopt the reasoning of the Court of Appeals for the

6th Circuit (“6th Circuit”) in In re United States v. NorCal Tea

Party Patriots (“NorCal”)

(6th Cir. 2016). In

NorCal, the 6th Circuit held that the names, addresses, and

taxpayer-identification numbers of applicants for tax-exempt

status are not “return information.”

. In so

holding, the 6th Circuit recognized that the D.C. Circuit had

held that the names of applicants for tax exempt status are

“return information.”

at 964 (citing Landmark,

). The 6th Circuit found the D.C. Circuit’s holding

unpersuasive because in their view the D.C. Circuit had so held

based on its understanding that “return information”

11 specifically covers ‘a taxpayer’s identity’ without taking into

consideration that the statute defines “taxpayer identity” as,

inter alia, “the name of the person with respect to whom a

return is filed.”

(citing § 6103(b)(2)(A)). However, as the

IRS points out, “the court in NorCal incorrectly assumed that a

‘taxpayer’s identity includes only names on a return, not on an

application.’” Def.’s Reply, ECF No. 20 at 8 (internal quotation

marks omitted). The Court concludes that NorCal is unpersuasive

in view of the D.C. Circuit authority in Landmark.

Argyle also argues that the plain language of section

6103(b)(2)(A) “limits ‘return information’ to information

prepared or received by the IRS ‘with respect to a return or

with respect to the determination of the existence, or possible

existence, of liability (or the amount thereof) . . .” Pl.’s

Reply, ECF No. 21 at 9 (emphasis added). Argyle argues that

since “[n]either of these conditions are present with respect to

the requested records” they are not exempt from disclosure.

However, this plain language argument ignores the D.C. Circuit

precedent in Landmark.

Argyle also points to authority from other circuits to

support its argument that the remaining items are not “return

information.” Under that authority, for information to

constitute “return information,” the immediate source of the

information must be a return or an internal IRS document based

12 on a return. In Thomas v. U.S.,

(7th Cir. 1989), the

question for the Court was “whether the issuance by the [IRS] of

a press release that contains information about a taxpayer’s

liability drawn from a Tax Court opinion is an unauthorized

disclosure of tax-return information, exposing the government to

liability . . .”

. The Court found that the

direct source of the information was not Mr. Thomas’s tax

return, but rather the Tax Court’s opinion.

.

Accordingly, the Court stated its “belie[f] that the definition

of return information comes into play only when the immediate

source of the information is a return, or some internal document

based on a return, as these terms are defined in § 6103(b).” Id.

at 21; see also Rice v. U.S.,

(1999)

(“whether information about a taxpayer may be classified as

‘return information’ invoking the application of § 6103 turns on

the immediate source of the information”). In view of Landmark,

however, the Court finds these non-binding opinions

unpersuasive.

Pursuant to Landmark, and its direction to broadly construe

“return information,” the Court concludes that the information

in Form 8655 falls within the definition of “return

information.” Item 1 of the FOIA request—Form 8655—as submitted

to the IRS, contains: (1) identifying information about the

taxpayer filing the form—the taxpayer’s name, EIN, address and

13 telephone number; (2) information that identifies taxpayer’s RA—

the RA’s name, EIN, address, and telephone number; (3) which

types of returns the RA is authorized to sign and file on behalf

of the taxpayer; (4) which types of tax returns for which the RA

is authorized to make deposits and payments; and (5) whether the

RA is authorized to receive information about the taxpayer on

Forms Series W-2, 1099, or 3921/3922. Blank IRS Form 8655, ECF

No. 16-1 at 1. The taxpayer signs and dates the Form 8655 and

provides their title. Id. This data is “return information”

because it is provided to the IRS “with respect to the

determination of the existence, or possible existence, of

liability.”

(b)(2)(A).

Item 2 of the FOIA request is for RA’s Lists (“RAL”). The

RAL is submitted by an RA and, among other things, identifies

taxpayers for whom an RA will perform authorized services. 3

Argyle, relying on Ryan v. Bureau of A.T.F.,

(D.C.

Cir. 1983), argues that because an RAL is submitted by an RA

rather than a taxpayer, it is not exempt from disclosure. Pl.’s

3 Argyle disputes this statement only insofar as it includes the word “taxpayer.” Pl.’s Counter-Statement of Disputes Facts, ECF No. 18-1 ¶ 24. However, there can be no genuine dispute that the Form 8655 solicits the name, identifying information, and signature and title of the “Taxpayer.” See Blank IRS Form 8655, ECF No. 16-6. Nor do the parties dispute that “[a]n RAL typically contains or is accompanied by the Forms 8655 of a [RA]. Pl.’s Counter-Statement of Disputes Facts, ECF No. 18-1 ¶ 25.

14 Mot., ECF No. 18 at 15. The IRS responds—and the Court agrees—

that Argyle is mistaken in its reliance on Ryan, because in that

case, the D.C. Circuit was interpreting the flush language that

follows § 6103(b)(2)(A)’s definition of “return information”—the

“Haskell Amendment.” Def.’s Reply, ECF No. 20 at 13. The Haskell

Amendment “allows the IRS to ‘release for research purposes

statistical studies and compilations of data, such as the tax

model, which do not identify individual taxpayers.’ . . . and

does not apply to information that an agency simply transfers

from one document to another.” Judicial Watch v. S.S.A.,

(D.D.C. 2011) (citing Church of Scientology, 484

U.S. at 16)(emphasis added). This is not the case with the RAL

as it identifies taxpayers for whom an RA will perform

authorized services. Argyle failed to respond to this argument

in its Reply briefing. See generally Pl.’s Reply, ECF No. 21.

The Court concludes that RALs are “return information” because

they provided to the IRS “with respect to the determination of

the existence, or possible existence, of liability.”

(b)(2)(A).

The parties do not dispute that the remaining items in the

FOIA request are reports generated from the RAF database, which

contains information derived from the Form 8655. Pl.’s Counter-

Statement of Disputed Facts, ECF No. 18-1 ¶ 40. Item 4 contains

15 lists of taxpayer EINs associated with particular RAs. 4

.

Items 5 and 6 also contain taxpayer EINs. 5

. Item 7

contains information found on the Form 8655.

. Item 8

contains “listings and reports of the additions or deletions of

taxpayer/client information to the RAF database.” 6

. Item

9 contains “a report for each RA whose clients (taxpayers) have

revoked the RA’s authorization.” 7

. As with the Form 8655

and the RAL, the Court concludes Items 4 through 9 of the FOIA

request are “return information” because they are provided to

the IRS “with respect to the determination of the existence, or

possible existence, of liability.”

(b)(2)(A).

4 Argyle disputes this statement only insofar as it includes the word “taxpayer.” Pl.’s Counter-Statement of Disputes Facts, ECF No. 18-1 ¶ 28. However, there can be no genuine dispute that the Form 8655 solicits the EIN of the “Taxpayer.” See Blank IRS Form 8655, ECF No. 16-6. 5 Argyle disputes this statement only insofar as it includes the word “taxpayer.” Pl.’s Counter-Statement of Disputes Facts, ECF No. 18-1 ¶ 31. However, there can be no genuine dispute that the Form 8655 solicits the EIN of the “Taxpayer.” See Blank IRS Form 8655, ECF No. 16-6. 6 Argyle disputes this statement only insofar as it includes the word “taxpayer.” Pl.’s Counter-Statement of Disputes Facts, ECF No. 18-1 ¶ 31. However, there can be no genuine dispute that the Form 8655 solicits the “Taxpayer” information described supra. See Blank IRS Form 8655, ECF No. 16-6. 7 Argyle disputes this statement only insofar as it includes the word “taxpayer.” Pl.’s Counter-Statement of Disputes Facts, ECF No. 18-1 ¶ 31. However, there can be no genuine dispute that the Form 8655 solicits the “Taxpayer” information described supra. See Blank IRS Form 8655, ECF No. 16-6.

16 For all these reasons, the IRS’s Motion for Summary

Judgment is GRANTED as to Items 1-2 and 4-9 of the FOIA request.

The Court need not reach the IRS’s argument that Argyle’s FOIA

request is unduly burdensome and overly broad on its face

because it would result in millions of pages of responsive

records, see Def.’s Mot., ECF No. 16-2 at 14; nor whether Argyle

conceded that argument, see Def.’s Reply, ECF No. 20 at 4.

Additionally, the Court need not address whether the records are

also exempt under FOIA exemption 6. See Landmark Legal

Foundation (“Landmark”) v. I.R.S.,

(D.C.

Cir. 2001)(noting that the Court need not reach whether the

records were properly withheld under Exemption 6 after

determining that Exemption 3 was applicable to the records).

C. The Foreseeable Harm Standard Does Not Apply

In 2016, Congress passed the FOIA Improvement Act (“FIA”),

Stat. 538, which, among other things,

codified the “foreseeable harm” standard established by the

Department of Justice in 2009 and used to defend an agency's

decision to withhold information. See S. Rep. No. 114-4, at 3 &

n.8 (2015) (citing Office of Att'y Gen., Memorandum for Heads of

Executive Departments and Agencies, Subject: Freedom of

Information Act (Mar. 19, 2009)); S. Rep. No. 114-4, at 7–8.

Accordingly, as amended by the FIA, the statutory text now

provides that: “An agency shall ... withhold information under

17 this section only if ... (I) the agency reasonably foresees that

disclosure would harm an interest protected by [a FOIA]

exemption; or (II) disclosure is prohibited by law[.]”

(a)(8)(A). Stated differently, “pursuant to the [FIA], an

agency must release a record—even if it falls within a FOIA

exemption—if releasing the record would not reasonably harm an

exemption—protected interest” or if the law does not prohibit

the disclosure. Rosenberg v. U.S. Dep't of Def.,

(D.D.C. 2018) (citation omitted).

Argyle argues that the IRS has failed to comply with the

foreseeable harm standard. See Pl.’s Mot., ECF No. 18 at 7.

Argyle is mistaken. “‘[T]he foreseeable harm standard only

applies to those FOIA exemptions under which discretionary

disclosures can be made.’” Rosenberg v. U.S. Department of

Defense,

, 73 n.1 (D.D.C. 2018)(quoting S.

Rep. No. 114-4, at 8). “Information that is prohibited from

disclosure or exempt from disclosure by law ‘is not subject to

discretionary disclosure and is therefore not subject to the

foreseeable harm standard.’”

(quoting S. Rep. No. 114-4, at

8). Here, as explained supra, disclosure is prohibited by law.

Accordingly, the IRS was not required to comply with the

foreseeable harm standard.

18 D. Segregability

Argyle contends that the IRS has failed to segregate non-

disclosable portions of the information. Pl.’s Mot., ECF No. 18

at 15-17. Under FOIA, “even if [the] agency establishes an

exemption, it must nonetheless disclose all reasonably

segregable, nonexempt portions of the requested record(s).” Roth

v. U.S. Dept. of Justice,

(D.C. Cir. 2001)

(internal quotation marks and citation omitted). “[I]t has long

been the rule in this Circuit that non-exempt portions of a

document must be disclosed unless they are inextricably

intertwined with exempt portions.” Wilderness Soc'y v. U.S.

Dep't of Interior,

(D.D.C. 2004) (quoting

Mead Data Cent., Inc. v. U.S. Dep't of Air Force,

(D.C. Cir. 1977)). However, where return information is

exempt from disclosure under Section 6103(b), the IRS has no

duty under FOIA to undertake redactions. See Church of

Scientology of California v. I.R.S.,

(1987).

Accordingly, there are no segregable portions of the records.

19 IV. Conclusion For the reasons set forth above, the IRS’s Motion for

Summary Judgment, ECF No. 16 is GRANTED and Argyle’s Cross-

Motion for Summary Judgment, ECF No. 18, is DENIED. An

appropriate order accompanies this Memorandum Opinion.

SO ORDERED.

Signed: Emmet G. Sullivan United States District Judge September 25, 2022

20