Aronson v. Internal
U.S. Court of Appeals for the First Circuit
Aronson v. Internal
Opinion
USCA1 Opinion
July 10, 1992 UNITED STATES COURT OF APPEALS
FOR THE FIRST CIRCUIT
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No. 91-2256
ROBERT A. ARONSON,
Plaintiff, Appellant,
v.
INTERNAL REVENUE SERVICE, ET AL.,
Defendants, Appellees.
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No. 91-2257
ROBERT A. ARONSON,
Plaintiff, Appellee,
v.
INTERNAL REVENUE SERVICE, ET AL.,
Defendants, Appellants.
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APPEALS FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MASSACHUSETTS
[Hon. Douglas P. Woodlock, U.S. District Judge]
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Before
Breyer, Chief Judge,
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Cyr, Circuit Judge,
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Boyle,* District Judge.
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Channing S. MacDonald with whom Richard W. Lubart was on brief
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for Robert A. Aronson.
Frank P. Cihlar, with whom James A. Bruton, Acting Assistant
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Attorney General, with whom Gary R. Allen, and Jonathan S. Cohen,
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Attorneys, Tax Division, Department of Justice, and Wayne A. Budd,
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United States Attorney, were on brief for the Internal Revenue Service
et al.
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____________________
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*Of the District of Rhode Island, sitting by designation.
BREYER, Chief Judge. The government appeals a
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district court judgment requiring the Internal Revenue
Service ("IRS") to provide Robert Aronson, a private tracer
of lost taxpayers, with the last known street addresses of
persons to whom the government owes tax refunds for the
years 1981-87. The district court held that the Freedom of
Information Act ("FOIA"), 5 U.S.C. 552, requires that
disclosure. In our view, however, a different statute, a
special tax statute that limits the disclosure of tax return
information, permits the IRS not to disclose this
information to private persons such as Aronson. 26 U.S.C.
6103(a), (m)(1). And, an exemption in the FOIA makes clear
that this tax statute, not the FOIA's general disclosure
provision, governs this case. 5 U.S.C. 552(b)(3). We
reverse the district court's determination to the contrary.
For similar reasons, we affirm the district court's related
decision denying Aronson access to some different taxpayer
information, namely taxpayer identification numbers.
I
Background
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Robert Aronson is a lawyer who specializes in
finding persons to whom the government owes money and, for a
fee, helping them obtain the money that is their due.
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Insofar as he finds people whom the agency would not
otherwise have found, Aronson performs a public service.
Insofar as he finds and charges people whom the agency would
have located on its own, his service is less beneficial.
See Aronson v. Dep't of Hous. and Urban Dev., 822 F.2d 182,
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183, 188 (1st Cir. 1987) (Department's "poor performance in
locating" those owed money is a "public interest" factor
favoring disclosure), later proceeding, 866 F.2d 1 (1st Cir.
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1989).
In May 1989, Aronson, invoking the FOIA, asked the
IRS for "the entire file of undistributed income tax refunds
for the tax years 1981 through and including 1987." Aronson
wanted the name of each taxpayer due a refund, the last
known street or mailing address, the taxpayer's
identification number, and the amount of the refund due.
The IRS had previously released names and partial addresses
(cities, states, and zipcodes) to the press as part of its
own efforts to find those taxpayers. It gave Aronson this
same information. Aronson then brought this lawsuit to
compel the IRS to give him the rest of the information.
The district court, finding no genuine and
material factual disputes, entered an order, on summary
judgment, compelling the IRS to give Aronson the last known
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street addresses along with the names, cities and zipcodes
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already supplied. It denied the rest of Aronson's request.
The IRS now appeals the district court's order requiring it
to provide street addresses. Aronson appeals only the
district court's decision not to require the IRS to give him
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each taxpayer's identification number. We shall consider
the IRS's appeal first, turning to Aronson's appeal in the
final section of this opinion.
II
The Relevant Statutes
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Two statutes set forth the law that governs this
case. The first is the Freedom of Information Act. The
second is a specific provision of the Internal Revenue Code
that governs the confidentiality of taxpayer identity
information.
1. The Freedom of Information Act. The FOIA
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requires government agencies to "make . . . promptly
available" to any person, upon request, whatever "records"
the agency possesses unless those "records" fall within any
of nine listed exemptions. 5 U.S.C. 552(a)(3), (b). The
third listed exemption in the statute ("Exemption 3"),
relevant here, provides:
(b) This section [i.e., the FOIA
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disclosure requirement and procedures]
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does not apply to matters that are . . .
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(3) specifically exempted from
disclosure by statute . . . , provided
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that such statute (A) requires that the
matters be withheld from the public in
such a manner as to leave no discretion
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on the issue, or (B) establishes
__
particular criteria for withholding or
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refers to particular types of matters to
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be withheld.
5 U.S.C. 552(b)(3) (emphasis added). That is to say, the
FOIA does not require an agency to disclose information if
another statute requires the agency to withhold the
information, as long as that other statute (1) gives the
agency no discretion to disclose, or (2) establishes
criteria for withholding, or (3) specifies particular types
of information to be withheld.
2. The Tax Statute. Congress, as part of the Tax
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Reform Act of 1976, enacted a detailed statute governing the
"[c]onfidentiality and disclosure of returns and return
information." 26 U.S.C. 6103. This tax statute lays down
a basic rule of confidentiality. It forbids the IRS to
"disclose" any tax "return" or tax "return information." 26
U.S.C. 6103(a). It defines "return information" as
including "a taxpayer's identity." 26 U.S.C.
6103(b)(2)(A). And, it defines "taxpayer identity" as
the name of a person with respect to
whom a return is filed, his mailing
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address, his taxpayer identifying
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number, . . . or a combination thereof.
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26 U.S.C. 6103(b)(6) (emphasis added); see also Church of
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Scientology v. IRS, 484 U.S. 9, 10-11 (1987). It then sets
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forth several narrowly drawn exceptions, defining specific
circumstances in which the IRS may, or must, reveal some of
this information. 26 U.S.C. 6103(c)-(o). One of these
exceptions, relevant here, states:
The Secretary may disclose taxpayer
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identity information to the press and
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other media for purposes of notifying
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persons entitled to tax refunds when the
Secretary, after reasonable effort and
lapse of time, has been unable to locate
such persons.
26 U.S.C. 6103(m)(1) (emphasis added).
III
The Relevant Legal Questions
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The Supreme Court has held that a court, when
examining a claim that FOIA Exemption 3 permits an agency to
withhold particular requested data, must ask two questions.
First, does the special statute (here, the tax statute, 26
U.S.C. 6103(a), (m)(1)) "constitute a statutory exemption
to disclosure within the meaning of Exemption 3"? Second,
is the requested data "included within" this special
statute's "protection"? CIA v. Sims, 471 U.S. 159, 167
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(1985); see also Baldrige v. Shapiro, 455 U.S. 345, 352-53
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(1982). These are the two questions before us.
A
The First Question
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The first question is whether or not the special
tax statute is an "exempting statute." The answer is clear.
The tax statute falls squarely within FOIA Exemption 3.
Exceptions aside, the tax statute "requires that" return
information "be withheld . . . in such a manner as to leave
no discretion on the issue." 5 U.S.C. 552(b)(3)(A); see
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also De Salvo v. IRS, 861 F.2d 1217, 1221 n.4 (10th Cir.
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1988) (26 U.S.C. 6103 is an Exemption 3(A) statute);
Linsteadt v. IRS, 729 F.2d 998, 1000 (5th Cir. 1984) (same);
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Fruehauf Corp. v. IRS, 566 F.2d 574, 578 & n.6 (6th Cir.
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1977) (same). The relevant exception, read together with
the rest of the statute, both "refers to particular types of
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matters to be withheld" (namely, "taxpayer identity
information") and "establishes particular criteria for
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withholding" (namely, that the IRS may consider release only
where it would help notify taxpayers of refunds due, and,
even then, only to the media). 5 U.S.C. 552(b)(3)(B); see
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also De Salvo, 861 F.2d at 1221 & n.4 (26 U.S.C. 6103,
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including exceptions, is an Exemption 3(B) statute); Grasso
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v. IRS, 785 F.2d 70, 77 (3d Cir. 1986) (same); Chamberlain
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v. Kurtz, 589 F.2d 827, 838-39 (5th Cir.) (same), cert.
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denied, 444 U.S. 842 (1979). Thus, we answer the first
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question affirmatively.
B
The Second Question
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The second question is whether the taxpayers'
street addresses fall within the protection of the special
tax statute. Aronson argues that they do not. He points to
the exception in the tax statute that permits the IRS to
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disclose "taxpayer identity information to the press and
other media" to help find taxpayers owed refunds. And, he
says that this "exception" requires the IRS to disclose that
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information here. To win this argument, Aronson must
convince us both (1) that he falls within the statute's term
"press and other media" (for the statute permits disclosure
only to them), and (2) that the IRS acted outside its
permitted power in not granting disclosure. We do not see
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how Aronson can make either of those showings.
1. The Standard of Review. Before turning to the
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merits of Aronson's argument, we consider a conceptual
question of administrative law, the answer to which will
sometimes affect the outcome in a FOIA Exemption 3 case: To
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what extent should a court (reviewing an agency's decision
not to disclose) defer, or give special weight, to the
agency's (here, the IRS's) answers to the kinds of legal
questions mentioned in the preceding paragraph, namely the
question of statutory interpretation and that of abuse of
discretion? Ordinarily, a court would give special weight
to the agency's interpretation of the language of the
statute (such as the words "press and other media") the
agency administers, where the interpretative question (as
here) involves a minor, interstitial matter, closely related
to the daily administration of a complex statutory scheme.
Chevron USA, Inc. v. Natural Resources Defense Council,
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Inc., 467 U.S. 837, 843-45 (1984); Mayburg v. Secretary of
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Health and Human Serv., 740 F.2d 100, 106 (1st Cir. 1984);
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Constance v. Secretary of Health and Human Serv., 672 F.2d
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990, 995-96 (1st Cir. 1982). A court normally would also
give an administrative agency broad leeway in deciding
whether or not to exercise the permissive authority a
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statute grants. 5 U.S.C. 706(2)(A) (reversal if
"arbitrary, capricious, an abuse of discretion"); Citizens
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to Preserve Overton Park v. Volpe, 401 U.S. 402, 416 (1971)
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("clear error of judgment" as standard under 706(2)(A) and
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provides only "narrow" review); 5 Kenneth C. Davis,
Administrative Law Treatise 29:6 (2d ed. 1984).
Where the application or interpretation of a FOIA
Exemption 3 statute is at issue, however, one might ask
whether a court should abandon this ordinary administrative
law framework in light of FOIA's statement that a court,
asked to order an agency to release information, "shall
determine the matter de novo. . . ." 5 U.S.C.
552(a)(4)(B). The district court in this case believed this
FOIA language required it to decide de novo (i.e., without
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giving the agency the leeway that administrative law
ordinarily provides) whether the IRS properly interpreted
and applied the tax statute. And, several other courts have
thought the same. E.g., De Salvo, 861 F.2d at 1218-21;
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Church of Scientology v. IRS, 792 F.2d 146, 148-50 (D.C.
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Cir. 1986), aff'd 484 U.S. 9 (1987); Grasso, 785 F.2d at 73-
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75; Long v. United States IRS, 742 F.2d 1173, 1177-79 & n.12
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(9th Cir. 1984); Linsteadt, 729 F.2d at 1003; Currie v. IRS,
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704 F.2d 523, 527-28 (11th Cir. 1983).
In our view, however, ordinary, deferential
principles of administrative law, not the FOIA's special, de
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novo principles, govern review of the IRS's interpretation
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of this Exemption 3 statute and its application to the data
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at issue. For one thing, the language of the FOIA, in
saying that the FOIA "does not apply to matters that are . .
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. specifically exempted from disclosure by statute . . . ,"
5 U.S.C. 552(b)(3), suggests that how an Exemption 3
statute applies to data that arguably fall within its reach,
and whether specific circumstances counsel disclosure to
further the statute's aim, are legal questions normally
governed by that Exemption 3 statute, not by the FOIA
itself.
For another thing, and more importantly, if
courts were to use principles of FOIA de novo review to
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decide how to interpret or to apply the exceptions in this
special tax statute, they would risk distorting Congress's
very different aims in enacting the two different statutes.
See Cheek v. IRS, 703 F.2d 271, 271-72 (7th Cir. 1983) (per
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curiam); King v. IRS, 688 F.2d 488, 495-96 (7th Cir. 1982);
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Zale Corp. v. IRS, 481 F. Supp. 486, 489 (D.D.C. 1979); cf.
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Baldrige, 455 U.S. at 352-55; White v. IRS, 707 F.2d 897,
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900 (6th Cir. 1983). On the one hand, the FOIA strongly
favors disclosure. Its very purpose is "'to open agency
action to the light of public scrutiny.'" Dep't of Justice
________________
v. Reporters Comm. for Freedom of the Press, 489 U.S. 749,
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772 (1989) (quoting Dep't of Air Force v. Rose, 425 U.S.
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352, 372 (1976)); see also Dep't of Justice v. Tax Analysts,
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492 U.S. 136, 142 (1989). It permits every citizen, whether
well, or badly, motivated, to obtain the information it
makes public. It requires agencies to adhere to "'a general
philosophy of full agency disclosure.'" Rose, 425 U.S. at
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360 (quoting S. Rep. No. 813, 89th Cong., 1st Sess. 3
(1965)). Its exemptions are narrowly drawn, in favor of
disclosure. See, e.g., 5 U.S.C. 552(b)(6) (exemption
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where disclosure is "clearly unwarranted invasion of
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personal privacy") (emphasis added). Its procedural
provisions, such as de novo court review of agency decisions
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not to disclose, 5 U.S.C. 552(a)(4)(B), further these
purposes. And, courts have interpreted the disclosure
provisions generously, in order to achieve the FOIA's basic
aim: sunlight. E.g., Dep't of Justice v. Julian, 486 U.S.
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1, 8 (1988); FBI v. Abramson, 456 U.S. 615, 630 (1982); NLRB
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v. Robbins Tire and Rubber Co., 437 U.S. 214, 220-21 (1978);
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Rose, 425 U.S. at 361.
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In the tax statute, however, Congress has decided
that, with respect to tax returns, confidentiality, not
sunlight, is the proper aim. Tax returns contain highly
personal information that many taxpayers might wish not to
have broadcast. Moreover, without clear taxpayer
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understanding that the government takes the strongest
precautions to keep tax information confidential, taxpayers'
confidence in the federal tax system might erode, with
harmful consequences for a tax system that depends heavily
on voluntary compliance. Church of Scientology v. IRS, 792
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F.2d 153, 158-59 (D.C. Cir. 1986) (en banc), aff'd 484 U.S.
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9 (1987). Thus, the Senate Finance Committee, recommending
the tax statute here at issue, pointed both to the
"citizen's right to privacy" and to the "related impact of
the disclosure upon the continuation of compliance with our
country's tax system" as reasons for more tightly
restricting disclosure. S. Rep. No. 938, 94th Cong., 2d
Sess., pt. 1, 318 (1976), reprinted in 1976 U.S.C.C.A.N.
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3439, 3747. It concluded that
returns and return information should
generally be treated as confidential and
not subject to disclosure except in
those limited situations delineated [in
the exceptions].
Id.; see also H.R. Conf. Rep. No. 1515, 94th Cong., 2d Sess.
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475, reprinted in 1976 U.S.C.C.A.N. 4118, 4180.
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If courts review the propriety of an agency's
exercise of discretion authorized by a tax confidentiality
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statute, using the full array of presumptions and procedural
mechanisms embodied in the FOIA disclosure statute, they are
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unlikely properly to carry out Congress's confidentiality-
protecting purpose. Applied to the agency's specific
decisions and interpretations under "confidentiality"
statutes, the disclosure statute's language, presumptions,
and procedures favoring openness will threaten, in practice,
to undermine the privacy-protecting, confidence-promoting
objectives that led Congress to enact special
confidentiality statutes, such as the tax statute before us.
See 26 U.S.C. 6110 (procedures, more restrictive than
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FOIA, for public inspection of IRS written determinations);
Church of Scientology, 792 F.2d at 159.
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Thus, in our view, once a court determines that
the statute in question is an Exemption 3 statute, and that
the information requested at least arguably falls within the
statute, FOIA de novo review normally ends. See White, 707
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F.2d at 900-01; King, 688 F.2d at 494-95; Zale Corp., 481 F.
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Supp. at 489; see also Sims, 471 U.S. at 167-69; Baldrige,
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455 U.S. at 358-59; Ass'n of Retired R.R. Workers, Inc. v.
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U.S. R.R. Retirement Bd., 830 F.2d 331, 335-37 (D.C. Cir.
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1987); Ryan v. Bureau of Alcohol, Tobacco and Firearms, 715
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F.2d 644, 645-47 (D.C. Cir. 1983); Irons & Sears v. Dann,
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606 F.2d 1215, 1220-22 (D.C. Cir. 1979). Any further review
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must take place under more deferential, administrative law
standards.
2. Applying the Standard. Applying ordinary (not
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special, FOIA) administrative law principles of review, we
must hold that Aronson does not have a legal right to force
disclosure of taxpayers' street addresses. For one thing,
the relevant statutory provision -- permitting the IRS to
disclose "taxpayer identity information" for purposes of
finding taxpayers owed refunds -- authorizes disclosure only
"to the press and other media." 26 U.S.C. 6103(m)(1).
Aronson concedes, as he must, that he is not a member of the
press. Normally, one would think that the words "other
media," unless used in some special sense, refer to radio,
television, and the like, not to a private citizen who
wishes to write letters to taxpayers. See, e.g., National
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Sec. Archive v. Dep't of Defense, 880 F.2d 1381, 1386, 1387
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(D.C. Cir. 1989) ("representative of the news media" refers,
in FOIA, to those, including newspapers, television and
radio, who "gather[] information" and turn it "into a
distinct work, and distribute[] that work to an audience"),
cert. denied, 494 U.S. 1029 (1990); cf. Tax Analysts v.
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Dep't of Justice, 1992 U.S. App. LEXIS 12143, at *11 (D.C.
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Cir. June 2, 1992) (publisher of weekly tax magazine and
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creator of electronic database on tax law within FOIA "news
media," "broadly" defined) (citing National Sec. Archive,
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880 F.2d at 1387). Even were there some lawful way of
stretching the meaning of those words to cover Aronson's
activity, we could not so interpret them here, where the
agency charged with administering the tax statute interprets
them as not including Aronson, for that interpretation is
not "manifestly contrary to the statute." Chevron, 467 U.S.
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at 844.
For another thing, even were Aronson a member of
the "media," the statute simply permits -- it does not
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require -- the IRS to disclose "taxpayer identity
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information." Of course, the IRS, in deciding whether or
not to disclose, may not act in a manner that is "arbitrary,
capricious, [or] an abuse of discretion." 5 U.S.C.
706(2)(A). But, the decision to disclose or to withhold the
street addresses obviously involves competing considerations
-- the usefulness of an old street address in locating a
taxpayer who has moved, the potential that disclosure will
lead to disturbing whoever now lives at the old street
address, aggravation of ordinary taxpayers' worry that other
private citizens may obtain personal information about them
from the IRS. Cf. Chevron, 467 U.S. at 844 (deference to
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administrative interpretation of statute that "reconcil[es]
conflicting policies") (quoting United States v. Shimer, 367
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U.S. 374, 382 (1961)). Nothing in the record suggests that
the IRS has balanced those considerations in an arbitrary
way.
We conclude that the IRS's decision to withhold
the street addresses was lawful. We reverse the district
court's order requiring their release.
IV
Aronson's Appeal
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Aronson appeals a different decision of the
district court, a decision not to require the IRS to give
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him a different item of "taxpayer identity information,"
namely, taxpayer identification numbers (usually the same as
a taxpayer's social security number). The legal issues are
the same as those just discussed. Indeed, the same, or
greater, protection attaches to this information as to
street addresses. See Int'l Bhd. of Elec. Workers Local
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Union No. 5 v. Dep't of Hous. and Urban Dev., 852 F.2d 87,
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89 (3d Cir. 1988) (citizens have "strong privacy interest"
in social security numbers, more than in "home addresses").
Thus, the same conclusion -- that the IRS need not release
the information -- follows.
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The decision to compel release of taxpayers'
street addresses is
Reversed.
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The decision not to compel release of taxpayer
identification numbers is
Affirmed.
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Reference
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