Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-casd-3_15-cv-00453/USCOURTS-casd-3_15-cv-00453-1/pdf.json

Nature of Suit Code: 895
Nature of Suit: Freedom of Information Act of 1974
Cause of Action: 05:0552fi Freedom of Information Act

---

1

15-cv-0453-BTM-LL

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF CALIFORNIA

SMART-TEK AUTOMATED 

SERVICES INC.,

Plaintiff,

v.

UNITED STATES INTERNAL 

REVENUE SERVICE,

Defendant.

Case No.: 15-cv-0453-BTM-LL

ORDER GRANTING 

DEFENDANT'S MOTION FOR 

SUMMARY JUDGMENT AND 

DENYING PLAINTIFF’S MOTION 

FOR SUMMARY JUDGMENT

[ECF NOS. 42, 43]

The United States Internal Revenue Service (“IRS”) and Plaintiff Smart-Tek 

Automated Services Inc. have filed cross motions for summary judgment as to

Plaintiff’s claims under the Freedom of Information Act (“FOIA”), 5 U.S.C. § 552, 

et seq. (ECF Nos. 42, 43). For the reasons discussed below, the IRS’s motion 

will be granted and Plaintiff’s motion will be denied. 

I. BACKGROUND

This is one of five actions filed by related entities against the IRS.1 Each 

case is based on the claim that the IRS failed to comply with its obligations under 

 

1 The five actions (including this one) are: Trucept, Inc., fka Smart Tek Solutions Inc. v. United States Internal 

Revenue Service, Case No. 15-cv-0447-BTM-JMA; Smart-Tek Services, Inc. v. United States Internal Revenue 

Service, Case No. 15-cv-0449-BTM-JMA; Smart-Tek Service Solutions Corp. v. United States Internal Revenue 

Service, Case No. 15-cv-0452-BTM-LL; Smart-Tek Automated Services Inc. v. United States Internal Revenue 

Service, Case No. 15-cv-0453-BTM-LL; and American Marine LLC v. United States Internal Revenue Service, 

Case No. 15-cv-0455-BTM-LL.

Case 3:15-cv-00453-BTM-LL Document 52 Filed 11/26/18 PageID.<pageID> Page 1 of 15
2

15-cv-0453-BTM-LL

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

5 U.S.C. § 552 to respond to FOIA requests submitted by the plaintiffs. Plaintiffs 

contend they submitted their requests after the IRS filed a series of liens against 

them between 2011 and 2013 holding them liable for payroll tax liabilities of other 

corporations under alter ego and/or successor liability theories. 

Plaintiff Smart-Tek Automated Services Inc. alleges it sent a written FOIA

request to the IRS on May 12, 2014. Compl. (ECF No. 1) ¶ 10. Under 5 U.S.C. § 

552(a)(6)(A)(i), an agency has 20 business days following receipt of a FOIA 

request to determine whether to comply with the request and must “immediately” 

notify the requester of its determination. 5 U.S.C. § 552(a)(6)(A)(i). On June 26, 

2014, the IRS allegedly sent a response to Plaintiff in which it acknowledged 

receipt of the request but “failed to make any determination about the request.” 

Compl. ¶ 11. On February 27, 2015, having received no further response from the 

IRS, Plaintiff initiated this action. 

On October 7, 2016, the IRS filed a motion for summary judgment, arguing 

that it had fully discharged its obligations under 5 U.S.C. § 552 and indicating that

it had completed its search for records and released 14,544 pages in full, 3,479

pages in part, and withheld 53 pages in full that were responsive to Plaintiff’s FOIA 

request. (ECF No. 26). On July 20, 2017, the Court granted in part and denied in 

part without prejudice the IRS’s motion for summary judgment. (ECF No. 36). The 

Court held that the declarations submitted by the IRS were insufficient to 

demonstrate the adequacy of the IRS’s search because they (1) failed to explain 

how the IRS interpreted Plaintiff’s FOIA request and the scope of documents the 

IRS determined were responsive to the request, (2) failed to provide sufficient 

information about the process by which the IRS reviewed 65 boxes of documents, 

and (3) failed to address whether the IRS’s subsequent release of two productions 

of documents indicated that the search was still ongoing. Id. at 7-8. 

The IRS also indicated that it withheld, in full or in part, responsive 

documents pursuant to the following FOIA exemptions: Exemption 3 (in 

Case 3:15-cv-00453-BTM-LL Document 52 Filed 11/26/18 PageID.<pageID> Page 2 of 15
3

15-cv-0453-BTM-LL

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

conjunction with 26 U.S.C. § 6103(a)), Exemption 3 (in conjunction with 26 U.S.C. 

§ 6103(e)(7)), Exemption 5, Exemption 6, Exemption 7(A), Exemption 7(C), and 

Exemption 7(D). The Court granted the IRS’s motion for summary judgment as to 

the documents withheld under Exemption 6, Exemption 7(A), and Exemption 3 (in 

conjunction with 26 U.S.C. § 6103(e)(7)). Id. at 15, 16, 19.

The IRS has now filed a renewed motion for summary judgment as to the 

remaining issues. (ECF No. 42). Plaintiff has also filed a motion for summary 

judgment. (ECF No. 43). The IRS is not renewing its motion for summary judgment 

as to the issues of Exemption 5, Exemption 7(C), and Exemption 7(D) because 

they are now moot. All portions of documents withheld under Exemption 5 and 

Exemption 7(D) have already been validly withheld pursuant to Exemption 7(A) 

and Exemption 3 (in conjunction with 26 U.S.C. § 6103(e)(7)). Maher Supp. Decl. 

¶ 10. Further, the IRS intends to release the 126 pages of documents withheld 

pursuant to Exemption 7(C) that were not also validly withheld pursuant to 

Exemption 6. Id. Therefore, the only remaining issues are (1) whether the IRS 

conducted an adequate search and (2) whether the IRS can withhold documents 

pursuant to Exemption 3 (in conjunction with 26 U.S.C. § 6103(a)).

II. DISCUSSION

A. FOIA Summary Judgment Standard

Summary judgment is appropriate if the evidence, when viewed in the light 

most favorable to the non-moving party, demonstrates “there is no genuine dispute 

as to any material fact.” Fed. R. Civ. P. 56(a); see Celotex Corp. v. Catrett, 477 

U.S. 317, 322 (1986). The moving party bears the initial burden of showing there 

is no material factual dispute and he or she is entitled to prevail as a matter of law. 

Celotex, 477 U.S. at 323. If the moving party meets its burden, the nonmoving 

party must go beyond the pleadings and identify specific facts which show a 

genuine issue for trial. Id. at 324.

District courts are directed to conduct a de novo review of the adequacy of 

Case 3:15-cv-00453-BTM-LL Document 52 Filed 11/26/18 PageID.<pageID> Page 3 of 15
4

15-cv-0453-BTM-LL

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

an agency’s response to a FOIA request. 5 U.S.C. § 552(a)(4)(B); U.S. Dep’t of 

Justice v. Reporters Comm. for Freedom of Press, 489 U.S. 749, 755 (1989). 

Because FOIA cases rarely involve material factual disputes, they “are typically 

and appropriately decided on motions for summary judgment.” Defenders of 

Wildlife v. U.S. Border Patrol, 623 F. Supp. 2d 83, 97 (D.D.C. 2009); see 

Shannahan v. Internal Revenue Serv., 637 F. Supp. 2d 902, 912 (W.D. Wash. 

2009). Courts “follow a two-step inquiry when presented with a motion for 

summary judgment in a FOIA case.” Shannahan, 637 F. Supp. 2d at 912. 

First, the district court must determine whether the agency has established 

that it fully discharged its obligation under FOIA to conduct an adequate search for 

responsive records. Zemansky v. U.S. Envtl. Prot. Agency, 767 F.2d 569, 571 (9th 

Cir. 1985). To meet this burden, the agency must:

demonstrate that it has conducted a “search reasonably calculated to 

uncover all relevant documents.” Further, the issue to be resolved is 

not whether there might exist any other documents possibly responsive 

to the request, but rather whether the search for those documents was 

adequate. The adequacy of the search, in turn, is judged by a standard 

of reasonableness and depends, not surprisingly, upon the facts of 

each case. In demonstrating the adequacy of the search, the agency 

may rely upon reasonably detailed, nonconclusory affidavits submitted 

in good faith.

Id. (quoting Weisberg v. U.S. Dep’t of Justice (“Weisberg II”), 745 F.2d 1476, 1485 

(D.C. Cir. 1984)). 

If the agency satisfies its initial burden, the court proceeds to the second step 

and considers “whether the agency has proven that the information that it did not 

disclose falls within one of nine FOIA exemptions.” Shannahan, 637 F. Supp. 2d 

at 912 (quoting Los Angeles Times Commc’ns, LLC v. Dep’t of the Army, 442 F. 

Supp. 2d 880, 894 (C.D. Cal. 2006)). Agencies seeking to withhold documents 

pursuant to a FOIA exemption “have been required to supply the opposing party 

and the court with a ‘Vaughn index,’ identifying each document withheld, the 

Case 3:15-cv-00453-BTM-LL Document 52 Filed 11/26/18 PageID.<pageID> Page 4 of 15
5

15-cv-0453-BTM-LL

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

statutory exemption claimed, and a particularized explanation of how disclosure of 

the particular document would damage the interest protected by the claimed 

exemption.” Wiener v. Fed. Bureau of Investigation, 943 F.2d 972, 977 (9th Cir. 

1991); see Vaughn v. Rosen, 484 F.2d 820, 823-25 (D.C. Cir. 1973). “The purpose 

of a Vaughn index ‘is ... to afford the requester an opportunity to intelligently 

advocate release of the withheld documents and to afford the court the opportunity 

to intelligently judge the contest.’” Shannahan, 637 F. Supp. 2d at 912 (quoting 

Wiener, 943 F.2d at 979). 

Finally, “even if the agency satisfies the two-part test, it generally must still 

disclose any reasonably segregable portions of the withheld documents.” Id.; 5 

U.S.C. § 552(b) (“Any reasonably segregable portion of a record shall be provided 

to any person requesting such record after deletion of the portions which are 

exempt under this subsection.”). “The burden is on the agency to establish that all 

reasonably segregable portions of a document have been segregated and 

disclosed.” Id. (quoting Pac. Fisheries Inc. v. United States, 539 F.3d 1143, 1148 

(9th Cir. 2008)). 

B. Reasonableness of Search 

The IRS contends it has conducted an adequate search for records 

responsive to Plaintiff’s FOIA request. To fulfill its obligations under FOIA, “the 

agency must show that it made a good faith effort to conduct a search for the 

requested records, using methods which can be reasonably expected to produce 

the information requested.” Oglesby v. U.S. Dep’t of the Army, 920 F.2d 57, 68 

(D.C. Cir. 1990). The agency must show “[w]hat records were searched, by whom, 

and through what process.” Steinberg v. U.S. Dep’t of Justice, 23 F.3d 548, 552 

(D.C. Cir. 1994). An agency can meet its burden by submitting a “reasonably 

detailed, nonconclusory” affidavit “in good faith.” Id. at 551 (quoting Weisberg II, 

745 F.2d at 1485). Agency affidavits that “do not denote which files were searched 

or by whom, do not reflect any systematic approach to document location, and do 

Case 3:15-cv-00453-BTM-LL Document 52 Filed 11/26/18 PageID.<pageID> Page 5 of 15
6

15-cv-0453-BTM-LL

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

not provide information specific enough to allow the plaintiff to challenge the 

procedures utilized” are insufficient to fulfill the agency’s burden. Weisberg v. U.S. 

Dep’t of Justice, 627 F.2d 365, 371 (D.C. Cir. 1980). In determining whether an 

agency has met its burden to prove an adequate search, “the facts must be viewed 

in the light most favorable to the requestor.” Zemansky, 767 F.2d at 571 (citing 

Weisberg II, 745 F.2d at 1485). 

In support of its contention that it conducted an adequate search for records 

responsive to Plaintiff’s FOIA request, the IRS submits the declarations of Delphine 

Thomas and Joseph Maher Jr. (ECF No. 42-1). Thomas is a Disclosure Specialist 

whose duties include responding to FOIA requests for IRS records, which requires 

her to “have knowledge of the types of documents created and maintained by the 

various divisions and functions of the IRS.” Thomas Decl. ¶ 1. Maher is a docket 

attorney in the Office of the Associate Chief Counsel of the IRS whose duties 

“require knowledge of the types of documents created and maintained by the 

various divisions and functions of the IRS, and an understanding of the provisions 

of the FOIA that exempt certain types of documents from disclosure in response 

to a request.” Maher Decl. ¶ 1. 

On May 29, 2014, the IRS received a FOIA request from Plaintiff seeking “a 

complete copy of the administrative file” for Plaintiff. Thomas Decl. ¶ 6. Disclosure 

Specialist Ed Pullman was initially assigned to Plaintiff’s request. Id. ¶ 7. On June 

20, 2014, Pullman received a voicemail from Plaintiff clarifying that its request was 

for the administrative files for the tax forms 940, 941, and 1120 for tax years 2007-

2014. Id. ¶ 8. Pursuant to established practice, Pullman entered Plaintiff’s 

Taxpayer Identification Number (“TIN”) into the Integrated Data Retrieval Service 

(“IDRS”). Id. ¶¶ 9, 12. IDRS is an electronic system that “manages data that has 

been retrieved from the Master File enabling [IRS] employees to take specific 

actions on taxpayer account issues, track status, and post transaction updates 

back to the Master File.” Id. ¶ 10. The Master File System is the IRS’s “nationCase 3:15-cv-00453-BTM-LL Document 52 Filed 11/26/18 PageID.<pageID> Page 6 of 15
7

15-cv-0453-BTM-LL

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

wide electronic information system containing taxpayer account information.” Id.

¶ 11. Pullman entered the following codes into IDRS in conjunction with Plaintiff’s 

TIN: BMFOLI (to retrieve an index of all the tax modules of the input TIN), BMFOLT 

(to retrieve all amounts, dates, and posted transactions pertaining to tax years 

2007-2014), and SUMRY (to display a summary of a taxpayer’s account, which 

includes all tax modules). Id. ¶ 12. 

From the IDRS record, Pullman learned that Plaintiff’s collection case file 

was in the possession of IRS Revenue Officer John Black. Id. ¶ 13. The IRS 

construed Plaintiff’s request for “administrative file” as a request for the Revenue 

Officer’s “case files for employment taxes reported on Forms 940 and 941 and 

income taxes reported on the Form 1120 for [Plaintiff] for the tax years 2007-2014, 

inclusive.” Thomas Supp. Decl. ¶ 12. 

Black informed the IRS Disclosure Office that documents responsive to 

Plaintiff’s requests were located within the commingled files maintained by Black 

on Plaintiff and over twenty related entities. Thomas Decl. ¶ 15. The commingled 

documents resulted in 65 boxes of documents, with the number of pages per box 

ranging from a low of 600 pages to a high of around 4000 pages. Id. ¶ 16. The 

total number of pages in the 65 boxes was around 141,000. Id. The 65 boxes of 

records were then scanned into electronic format and reviewed by Disclosure 

Specialists Thomas, Athena Amparano, and Ed Pullman. Thomas Supp. Decl. ¶¶

14-16. The Disclosure Specialists conducted their review by selecting a box of 

scanned records and “visually searched through the PDF files page by page, 

looking for specific documents containing the plaintiff’s name or employer 

identification number (‘EIN’).” Id. ¶¶ 17-18. 

Documents containing only the Plaintiff’s taxpayer return information were 

marked as responsive to Plaintiff’s FOIA request. Id. ¶ 19. Some boxes contained 

documents pertaining to Plaintiff as well as other taxpayers. Id. ¶ 20. Thomas 

“checked the authorization for the plaintiff’s designated representative with power 

Case 3:15-cv-00453-BTM-LL Document 52 Filed 11/26/18 PageID.<pageID> Page 7 of 15
8

15-cv-0453-BTM-LL

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

of attorney (‘POA’) using the CFINK command in IDRS” and “noted that the POA 

had authorization for some, but not all, of the taxpayers named in the records.” Id.

Along with its FOIA request, Plaintiff submitted a Form 2848 “authorizing its 

attorney in fact to receive only the return information of plaintiff within [Black’s] 

commingled administrative file.” Maher Supp. Decl. ¶ 13. The third-party taxpayers 

whose return information was within the commingled file did not provide Plaintiff or 

the IRS “with written consents to release [their] information pursuant to Internal 

Revenue Code Section 6103(c).” Id. ¶ 14. Therefore, if a document contained 

Plaintiff’s return information as well as the return information of one or more of the 

other FOIA requesting entities, it was marked as partially responsive to Plaintiff’s 

FOIA request and partially responsive to each of the other FOIA requesting entities 

whose return information was included on the document. Thomas Supp. Decl. ¶ 

21. If a document contained Plaintiff’s return information but also the return 

information of other taxpayers who did not submit FOIA requests, it was marked 

as partially responsive to Plaintiff’s request only. Id. ¶ 22. “Documents that did not 

contain any of plaintiff’s return information were marked as nonresponsive to 

plaintiff’s FOIA request.” Id. ¶ 23. Copies of responsive documents were uploaded 

to the IRS’s Automated Freedom of Information Act (“AFOIA”) system, which 

tracks and processes FOIA requests. Id. ¶¶ 25, 27.

Upon completion of the search, the IRS located 18,076 pages responsive to 

Plaintiff’s FOIA request. Maher Decl. ¶ 6. Plaintiff received “a total of 14,544 pages 

in full, 3,479 partially redacted pages, and 53 fully redacted pages.” Id. ¶ 8. The 

IRS released the documents to Plaintiff in five separate batches on July 30, 

September 11, November 12, and November 13, 2015 and August 1, 2016. Maher 

Supp. Decl. ¶ 6. The IRS completed its search for responsive records prior to the 

release of Batch 4 on November 13, 2015. Id. ¶ 7. The delayed subsequent release 

of Batch 5 on August 1, 2016 was due to an inadvertent exclusion and was not an 

indication that the IRS’s search was still ongoing. Id.

Case 3:15-cv-00453-BTM-LL Document 52 Filed 11/26/18 PageID.<pageID> Page 8 of 15
9

15-cv-0453-BTM-LL

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

The IRS has submitted “reasonably detailed, nonconclusory” affidavits that 

show “what records were searched, by whom, and through what process.” See 

Steinberg, 23 F.3d at 552. The IRS’s declarations indicate how the IRS interpreted 

Plaintiff’s FOIA request and its criteria to determine which documents from the 65 

boxes were responsive to Plaintiff’s request. Plaintiff argues that the IRS’s search 

was unreasonable because documents containing Plaintiff’s taxpayer information 

were commingled with documents containing other taxpayers’ information and the 

IRS “mark[ed] any document as non-responsive merely because it did not contain 

Plaintiff’s taxpayer information.” (ECF No. 44 at 3). The Court finds the IRS’s 

approach of marking documents as non-responsive if they did not contain Plaintiff’s 

taxpayer information to be reasonable because Plaintiff’s FOIA request only 

requested its own, and not any other taxpayers’ administrative file. (See ECF No. 

26, Exh. A). The IRS has conducted an adequate search in response to Plaintiff’s 

FOIA request. The IRS’s motion for summary judgment is granted as to this issue.

C. Exemption 3 in Conjunction with 26 U.S.C. § 6103(a)

After the Court’s prior order granting in part the IRS’s motion for summary 

judgment on documents withheld under Exemption 6, Exemption 7(A), and 

Exemption 3 (in conjunction with 26 U.S.C. § 6103(e)(7)), there remain 5 pages 

withheld in full and 335 pages withheld in part pursuant to Exemption 3 (in 

conjunction with 26 U.S.C. § 6103(a)). (ECF No. 42-2 Maher Supp. Decl. ¶ 15).

Plaintiff argues that because the IRS has determined for tax liability purposes 

that Plaintiff and other taxpayers are alter egos, and therefore one entity, the IRS 

cannot withhold documents on the basis that they belong to other taxpayers. (ECF 

No. 43-1 at 11; ECF No. 44 at 6). Plaintiff further contends that § 6103 no longer 

bars its request for certain return information because the names of its alleged 

alter egos were publicly disclosed in tax liens and a footnote in Goldberg v. United 

States, a related case. See 2015 WL 4656361, at *1 n.2 (S.D. Fla. Aug. 5, 2015). 

(ECF No. 43-1 at 9).

Case 3:15-cv-00453-BTM-LL Document 52 Filed 11/26/18 PageID.<pageID> Page 9 of 15
10

15-cv-0453-BTM-LL

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

The IRS argues it need not disclose the return information of alter-ego 

taxpayers because Plaintiff did not request such information, and even if Plaintiff 

had, such a request would be “invalid on its face” because Plaintiff failed to secure 

the requisite authorization for the disclosure of third party documents. (ECF No. 49 

at 4-6). The IRS asserts it did not itself disclose taxpayer identities in the Goldberg

case, and to the extent a tax lien constitutes public disclosure, the withheld 

documents nevertheless constitute protected return information. (ECF No. 42 at 

14-17). Finally, the IRS contends that a rule requiring disclosure upon assertion 

of alter ego liability contradicts how the IRS treats separate taxpayers and would 

lead to “absurd results.” (ECF No. 45 at 7-8). The Court agrees with the IRS in 

part. 

FOIA Exemption 3, 5 U.S.C. § 552(b)(3), protects from disclosure matters 

“specifically exempted by statute.” Section 6103 of the Internal Revenue Code, 26 

U.S.C. § 6103, is one such statute. Long v. U.S., 742 F.2d 1173, 1178 (9th Cir. 

1984). Section 6103 provides that returns and returns information “shall be 

confidential,” subject to certain exceptions. 26 U.S.C. § 6103(a). “If § 6103 forbids 

the disclosure of material, it may not be produced in response to a request under 

the FOIA.” Church of Scientology of California v. I.R.S., 484 U.S. 9, 11 (1987). 

FOIA requesters are generally not entitled to information identifying another 

taxpayer. See, e.g., Willamette Indus., Inc. v. United States, 689 F.2d 865, 867-69 

(9th Cir. 1982) (treating another taxpayer’s identifying information as exempt from 

FOIA request but requiring IRS to provide reasonable segregable portions of 

record); DeSalvo v. I.R.S., 861 F.2d 1217 (10th Cir. 1988) (“Individuals are . . . not 

entitled to the tax returns or return information of others unless a specific exception 

within the statute applies.”); Linsteadt v. I.R.S., 729 F.2d 998, 1000 (5th Cir. 1984) 

(stating a FOIA requester “is not entitled to access to the tax return or return 

information of other taxpayers”) (citing Fruehauf Corp. v. I.R.S., 566 F.2d 574, 578 

(6th Cir. 1980)). 

Case 3:15-cv-00453-BTM-LL Document 52 Filed 11/26/18 PageID.<pageID> Page 10 of 15
11

15-cv-0453-BTM-LL

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

As an initial matter, the Court finds that Plaintiff did not actually request the 

return information of alter ego entities. Plaintiff requested “a complete copy of the 

administrative file for the above-referenced taxpayers.” (ECF No. 26-6 Thomas 

Decl. Exh. A). The request references only Plaintiff’s TIN, and attaches a POA for 

that number alone. Id. The request fails to specify that it seeks the identities and 

information of other taxpayers connected with Plaintiff’s administrative file. Id. The 

Court further notes that the 35 day window in which to resubmit or amend the 

request has since expired. See 26 C.F.R. § 601.702(c)(1)(i). 

Even if Plaintiff had sufficiently stated the scope of its request, 26 U.S.C. 

§ 6103 specifically protects a taxpayer’s identity as confidential “return 

information.” See 26 U.S.C. § 6103(a) (“Returns and return information shall be 

confidential . . . .”); 26 U.S.C. § (b)(2)(A) (including “a taxpayer’s identity” in the 

definition of “return information”). “Return information” also encompasses “whether 

the taxpayer’s return was, is being, or will be examined or subject to other 

investigation.” 26 U.S.C. § (b)(2)(A). IRS regulations require that requests for 

another taxpayer’s return information, which includes their identity, be 

accompanied by “a properly executed power of attorney, Privacy Act consent, or 

tax information authorization, as appropriate.” 26 C.F.R. § 601.702(c)(5)(iii)(C). 

Plaintiff failed to obtain such consent here, despite its receipt of a tax lien listing 

nineteen alleged alter egos. (See ECF 43-2, Bonar Decl. Exh. A). 

Plaintiff’s relies on Lampert v. United States to support its assertion that the 

taxpayers’ identities are public information as a result of the tax lien and Goldberg

footnote, and therefore not subject to § 6103(a)’s disclosure prohibitions. 854 F.2d 

335 (9th Cir. 1988). Plaintiff’s reliance is not entirely misplaced. In Lampert, 

taxpayers alleged that government press releases detailing tax evasion charges 

against the taxpayers constituted unauthorized disclosures of their return 

information under 26 U.S.C. § 6103. Id. at 336. The Ninth Circuit rejected the 

taxpayers’ arguments, reasoning that that “once information is lawfully disclosed 

Case 3:15-cv-00453-BTM-LL Document 52 Filed 11/26/18 PageID.<pageID> Page 11 of 15
12

15-cv-0453-BTM-LL

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

in court proceedings, ‘§ 6103(a)’s directive to keep return information confidential 

is moot.’ ” Id. at 338 (quoting Figur v. United States, 662 F.Supp. 515, 517 (N.D. 

Cal. 1987)). The Ninth Circuit held that “once return information is lawfully 

disclosed in a judicial forum, its subsequent disclosure by press release does not 

violate [the statute].” Id.

The IRS contends that because another party — not the IRS — publicly 

disclosed taxpayers’ identities during the related Goldberg litigation, and because 

the IRS actively asserted the privilege throughout discovery, the IRS did not waive 

§ 6103 protections in a court proceeding. (ECF No. 42 at 14-18). But the Court 

need not reach this argument, as Lampert seems to at a minimum allow the IRS 

to confirm that the entities listed on the public federal tax lien are among those 

whose documents are included in the commingled file. See Bonar Decl. Exh. A. 

The identities of Plaintiff’s alleged alter-egos have been “made a part of the public 

domain” through legal process and the creation of a public record. Lampert, 854 

at 338. It therefore follows that the identities of taxpayers named in the public tax 

lien are no longer privileged under § 6103. See id. However, the Court agrees with 

the IRS that the documents containing the taxpayers’ other return information 

remain protected. See generally 26 U.S.C. § 6103(b) (enumerating other protected 

return information). That the IRS named other taxpayers publicly in connection 

with Plaintiff does not entitle Plaintiff to those taxpayers’ undisclosed, non-public 

documents through the FOIA.

Plaintiff’s alter ego argument is also unavailing. The Internal Revenue Code 

treats taxpayers as separate entities for tax assessment purposes irrespective of 

whether they are designated alter egos for collection purposes. See Portsmouth 

Ambulance, Inc. v. United States, 756 F.3d 494, 501 (6th Cir. 2014) (reasoning 

“the mere application of an alter-ego appellation does not transform separate 

individuals or companies into a single entity”). By arguing that alter egos are 

entitled to one another’s tax returns, Plaintiff would in fact merge the entities into 

Case 3:15-cv-00453-BTM-LL Document 52 Filed 11/26/18 PageID.<pageID> Page 12 of 15
13

15-cv-0453-BTM-LL

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

one taxpayer and render itself liable for the tax obligations of another taxpayer. 

Plaintiff cites to an unreported district court case, George v. Internal Revenue 

Service, 2007 WL 1450309 at *1 n.3 (N.D. Cal., May 14, 2007), as evidence that 

the IRS has previously treated a FOIA requester and its alter ego as a single entity 

for both tax liability and disclosure purposes. (ECF No. 43-1 at 11-12). But George

is neither binding nor does it hold that there is in fact an alter ego exception to § 

6103. See id. And although Plaintiff could in theory achieve disclosure of alter ego 

return information in a tax administration proceeding under 26 U.S.C. § 6103(h)(4), 

Plaintiff cannot do the same through a FOIA proceeding. See 26 U.S.C. § 

6103(h)(4) (providing “[a] return or return information may be disclosed in a Federal 

. . . proceeding pertaining to tax administration but only . . . if such return or return 

information directly relates to a transactional relationship between a person who is 

party to the proceeding and the taxpayer which directly affects the resolution of an 

issue in the proceeding”); Safeway, Inc. v. I.R.S., 2006 WL 3041079 at *7-8 (N.D. 

Cal. Oct. 24, 2006) (holding FOIA litigation not a proceeding within the meaning of 

§ 6103(h)(4)). See also Chamberlain v. Kurtz, 589 F.3d 827, 838 (5th Cir. 1979) 

(going further to state “[n]othing in the legislative history of section 6103 suggests 

that subsection (h)(4) was intended to govern disclosures of information to the 

taxpayer himself” and noting pertinent committee reports “discuss only disclosure 

to third party law enforcement officials”). 

Finally, a rule providing that putative alter egos are entitled to one another’s 

tax return information would, as the IRS argues, yield paradoxical results. (ECF 

No. 43 at 8). If the IRS discloses another taxpayer’s information pursuant to such 

a rule, only so that the requester can use that information to disprove alter ego 

status, the disclosure automatically violates § 6103(a) and conflicts with its core 

purpose of protecting taxpayer privacy. See Church of Scientology of California v. 

I.R.S., 484 U.S. 9, 16 (1987) (“Congress did not intend [§ 6103] to allow the 

disclosure of otherwise confidential return information merely by the redaction of 

Case 3:15-cv-00453-BTM-LL Document 52 Filed 11/26/18 PageID.<pageID> Page 13 of 15
14

15-cv-0453-BTM-LL

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

identifying details.”); Cause of Action v. I.R.S., 125 F.Supp.3d 145, 163 (D.D.C. 

2015) (“The core purpose of section 6103 is to protect taxpayer privacy.”) (internal 

quotations and alterations omitted). Plaintiff’s suggested approach runs counter 

to the purpose of § 6103 and is untenable.

For the foregoing reasons, the IRS’s motion for summary judgment is 

granted as to Exemption 3. 

III. CONCLUSION AND ORDER

The Court concludes with the reminder that “FOIA is not designed ‘as a 

substitute for civil discovery.’ ” Shannahan v. I.R.S., 672 F.3d 1142 (9th Cir. 

2012) (quoting Baldridge v. Shapiro, 455 U.S. 345, 360 n.14 (1982)). As another 

district court reasoned, if the Court were to “hold [Plaintiff] was entitled to the 

third-party return information [it] seeks, [the Court] would have to disclose that 

same information to the general public too.” Greenberger v. I.R.S., 283 

F.Supp.3d 1354, 1372 (N.D. Ga. 2017) (citing Forest Serv. Emps. For Envtl 

Ethics v. U.S. Forest Serv., 524 F.3d 1021, 1025 (9th Cir. 2008) (“FOIA provides 

every member of the public with equal access to public documents and, as such, 

information released in response to one FOIA request must be released to the 

public at large.”)). 

Finally, Plaintiff’s appeal to fairness in light of the I.R.S.’s assertion of alter 

ego liability for third parties’ unpaid taxes is unavailing. Even the I.R.S. 

recognizes that in an action challenging the imposition of liability Plaintiff will 

probably obtain the third party information it seeks. (ECF No. 45 at n.2). But this 

FOIA action is not an action challenging the liens.

//

//

//

//

//

Case 3:15-cv-00453-BTM-LL Document 52 Filed 11/26/18 PageID.<pageID> Page 14 of 15
15

15-cv-0453-BTM-LL

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

For the reasons discussed above, the IRS’s motion for summary judgment 

is GRANTED (ECF No. 42) and Plaintiff’s motion for summary judgment is

DENIED (ECF No. 43). 

IT IS SO ORDERED.

Dated: November 26, 2018

Case 3:15-cv-00453-BTM-LL Document 52 Filed 11/26/18 PageID.<pageID> Page 15 of 15