Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-caDC-06-05136/USCOURTS-caDC-06-05136-0/pdf.json

Parties Involved:
Internal Revenue Service
Appellant
Tax Analysts
Appellee

Document Text:

United States Court of Appeals

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued April 19, 2007 Decided July 24, 2007

No. 06-5136

TAX ANALYSTS,

APPELLEE

v.

INTERNAL REVENUE SERVICE,

APPELLANT

Appeal from the United States District Court

for the District of Columbia

(No. 05cv00934)

Francesca U. Tamami, Attorney, United States Department

of Justice, argued the cause for the appellant. Jeffrey A. Taylor,

United States Attorney, and Jonathan S. Cohen, Attorney, were

on brief. Michael J. Martineau, Attorney, entered an

appearance.

Cornish F. Hitchcock argued the cause for the appellee.

William A. Dobrovir was on brief.

Before: HENDERSON, ROGERS and KAVANAUGH, Circuit

Judges.

Opinion for the court filed by Circuit Judge HENDERSON.

KAREN LECRAFT HENDERSON, Circuit Judge: Tax Analysts

brought this action to compel the Internal Revenue Service

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(IRS) to disclose, inter alia, e-mails containing legal advice that

lawyers in the IRS Office of the Chief Counsel (OCC) sent to

IRS field personnel. The district court granted summary

judgment to Tax Analysts on the ground that the documents

sought constitute “Chief Counsel advice” (CCA) which the IRS

is required to disclose under 26 U.S.C. § 6110. Tax Analysts v.

IRS, C.A. No. 05-0934, slip op. at 1 (D.D.C. Feb. 27, 2006).

The IRS contends the statute’s plain language makes clear that

such advice is not CCA or, alternatively, if the language is

ambiguous, that the IRS has reasonably construed it to exclude

the e-mails from CCA. We conclude that the plain statutory

language mandates that the IRS disclose the e-mails. 

I.

Section 6110 of Title 26 of the United States Code provides

generally with regard to IRS documents that “the text of any

written determination and any background file document

relating to such written determination shall be open to public

inspection at such place as the Secretary may by regulations

prescribe.” 26 U.S.C. § 6110(a). Until 1998 the statute defined

“written determination” as “a ruling, determination letter, or

technical advice memorandum.” 26 U.S.C. § 6110(b)(1) (1998).

In Tax Analysts v. IRS, 117 F.3d 607 (D.C. Cir. 1997), we held

that this definition required the IRS to disclose as written

determinations “Field Service Advice” memoranda (FSAs),

which were prepared by lawyers in the IRS’s Office of Chief

Counsel (OCC) in response to requests for “legal guidance,

usually with reference to the situation of a specific taxpayer,”

“from field personnel of either the [OCC] or the IRS, such as

field attorneys, revenue agents, and appeals officers,” Tax

Analysts, 117 F.3d at 609.

In 1998, the Congress codified the court’s holding in Tax

Analysts by amending section 6110 in two important respects.

First, it amended the definition of “written determination” to

expressly include “Chief Counsel advice.” Internal Revenue

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Service Restructuring and Reform Act, Pub. L. No. 105-206,

§ 3509(a) (1998). Second, it added subsection 6110(i) entitled

“Special rules for disclosure of Chief Counsel advice,” which

defines “Chief Counsel advice” as 

written advice or instruction, under whatever name or

designation, prepared by any national office component

of the Office of Chief Counsel which—

(i) is issued to field or service center employees of the

Service or regional or district employees of the Office

of Chief Counsel; and

(ii) conveys—

(I) any legal interpretation of a revenue

provision;

(II) any Internal Revenue Service or Office of

Chief Counsel position or policy concerning a

revenue provision; or

(III) any legal interpretation of State law, foreign

law, or other Federal law relating to the

assessment or collection of any liability under a

revenue provision.

Id. § 3509(b)(i)(1)(A) (codified at 26 U.S.C. § 6110(i)(1)(A)).

In September 1998, OCC issued a “Questions and Answers”

document addressing issues raised by the new CCA disclosure

provisions in section 6110. Regarding e-mail advice from OCC

lawyers, the document stated that, although “e-mail is a

writing,” if an e-mail “consumed less than two hours of research

and preparation, such that [a lawyer] need not open a case file,

then, the e-mail is to be treated like informal telephone advice

(which is memorialized in writing, also),” noting that “[t]he

legislative history to section 3509 clarifies that informal advice

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The letter also sought disclosure of “all CCA withheld from

disclosure on the ground that the document transmitted was a preexisting legal memorandum.” Compl. ¶ 15. On appeal Tax Analysts

treats these documents as “within the category of ‘less-than-two-hour’

advice.” Appellee’s Br. at 7 n.4.

is not considered to be CCA.” JA 59; see also Chief Counsel

Directives Manual (CCDM) Exh. 33.1.2-1 (JA 102).

On June 7, 2004, Tax Analysts sent a letter to OCC

requesting disclosure under section 6110 of, inter alia, “all

written legal advice documents, whether or not styled CCA,

prepared by National Office components of OCC for the field,

and which have been withheld from public disclosure on the

ground that such written advice ‘can be rendered in less than

two hours,’ or that such documents ‘can be prepared in less than

two hours.’ ” Decl. of Assoc. Chief Counsel Deborah A. Butler

¶ 22 (JA 32).1 The letter also included a request under the

Freedom of Information Act (FOIA), 5 U.S.C. § 552, for records

regarding the two-hour disclosure rule.

 On July 12, 2004, the IRS responded to the section 6110

request with a letter stating that the request “ ‘raises several

issues that we are investigating’ and that ‘[a]t this time we are

not in a position to advise as to a timetable for response.’ ”

Compl. ¶ 16(a) (alteration in original). In a follow-up e-mail

dated February 4, 2005, the IRS advised Tax Analysts it would

not respond to the request until after it completed processing

another request from Tax Analysts, which it did not expect to

occur until September 30, 2005. In response to the FOIA

request, the IRS sent a series of letters requesting additional time

to respond. In a letter dated April 21, 2005, the IRS stated it

would “ ‘try to respond to the FOIA portion of the [amended]

request by May 23, 2005.’ ” Id. ¶ 17 (alteration in original).

On May 10, 2005, Tax Analysts, having received no

documents from the IRS, filed this action in the district court.

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The district court granted summary judgment in favor of the IRS

on the FOIA request, concluding that “the Office of Chief Counsel

properly withheld a number of requested documents under the

deliberative process privilege of 5 U.S.C. § 552(b)(5).” Tax Analysts,

C.A. No. 05-0934, slip op. at 1. Tax Analysts does not appeal the

FOIA ruling.

On February 27, 2006, the district court granted summary

judgment in Tax Analysts’ favor on the section 6110 request,

concluding that “written advice rendered to regional employees

by attorneys in the IRS Office of Chief Counsel’s national office

in less than two hours is ‘Chief Counsel advice’ falling within

the public inspection requirements of § 6110.” Tax Analysts,

C.A. No. 05-0934, slip op. at 1.2

 

The IRS filed a notice of appeal on April 27, 2006.

II.

The court reviews the district court’s grant of summary

judgment de novo. Holly Sugar Corp. v. Johanns, 437 F.3d

1210, 1212-13 (D.C. Cir. 2006); Milk Train, Inc. v. Veneman,

310 F.3d 747, 753 (D.C. Cir. 2002). “The burden of proof with

respect to the issue of disclosure of any information shall be on

the Secretary and any other person seeking to restrain

disclosure.” 26 U.S.C. § 6110(f)(4)(A). Applying these

standards, we conclude that the IRS has not met its burden and

that Tax Analysts is, as the district court held, entitled under

section 6110 to disclosure of the e-mails the IRS withheld from

disclosure under its two-hour rule.

The district court correctly concluded that the plain language

of section 6110 requires disclosure of the e-mails. Section

6110(a) unequivocally requires that the IRS make available for

public inspection “the text of any written determination and any

background file document relating to such written

determination.” Id. § 6110(a) (emphasis added). As amended

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in 1998, section 6110 defines “written determination” to include

“Chief Counsel advice,” id. § 6110(b)(1)(A), and defines “Chief

Counsel advice,” in turn, to include “written advice or

instruction . . . prepared by any national office component of the

Office of Chief Counsel which . . . is issued to field or service

center employees of the Service or regional or district

employees of the Office of Chief Counsel” and “conveys . . . any

legal interpretation of a revenue provision,” id. § 6110(i)(1)(A).

The documents Tax Analysts seeks readily fit this description.

They are written interpretations of revenue provisions prepared

by lawyers in OCC and sent to field personnel. Nonetheless, the

IRS has raised two interpretational arguments to support

withholding the documents—each hinging on the formality of

the advice provided. 

Before the district court, the IRS argued primarily that

“issued,” as used in section 6110(i)(1)(A)(i), is ambiguous and

should be interpreted to require that the advice be formally

issued by OCC as its official position and therefore cannot apply

to the “informal” written advice Tax Analysts seeks. On appeal,

the IRS largely passes over the “issued” argument urged below

and relies instead on its interpretation of the statutory term

“component.” According to the IRS, the informal advice of

individual lawyers employed by a national office component

“without supervisory review,” Appellant’s Br. at 22, cannot be

considered to be advice of a “component” of OCC because a

“ ‘component’ is an institutional entity, such as a Division, or

perhaps a Branch within a Division,” id. at 21. Thus, the IRS

maintains, the informal, unreviewed advice of an individual

lawyer is not “prepared by any national office component,” 26

U.S.C. § 6110(i)(1)(A), and therefore not subject to the

disclosure requirement in section 6110. We find neither of the

IRS’s arguments persuasive.

As a preliminary matter, Tax Analysts contends that the

“component” argument, which the IRS acknowledges “was not

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emphasized below,” Appellant’s Br. at 20 n.5, has been waived

because it was not adequately presented to the district court. See

United States ex rel. Hampton v. Columbia/HCA Healthcare

Corp., 318 F.3d 214, 219 (D.C. Cir. 2003) (“Arguments not

presented to the district court will not be heard on appeal absent

exceptional circumstances, and there are none in this case.”

(citing District of Columbia v. Air Fla., Inc., 750 F.2d 1077,

1084-85 (D.C. Cir. 1984))). Nonetheless, we assume, without

deciding, that the argument has not been waived and we address,

and reject, both arguments on the merits. See Moore v.

CapitalCare, Inc., 461 F.3d 1, 9 n.9 (D.C. Cir. 2006) (court not

required to decide waiver issue because, assuming argument was

preserved, appellant lost on merits).

The common meaning of “issue,” as a transitive verb, is

“[t]o give exit to; to send forth, or allow to pass out; to let out;

to emit; to discharge.” VIII Oxford English Dictionary 137 (2d

ed.1989) (OED); and we see no reason this meaning should not

apply here. See Pioneer Inv. Servs. Co. v. Brunswick Assocs.

Ltd. P’ship, 507 U.S. 380, 388 (1993) (“Courts properly assume,

absent sufficient indication to the contrary, that Congress

intends the words in its enactments to carry ‘their ordinary,

contemporary, common meaning.’ ” (quoting Perrin v. United

States, 444 U.S. 37, 42 (1979))). While it is true that in context,

the word can mean “[t]o give or send out authoritatively or

officially; to send forth or deal out in a formal or public

manner,” VIII OED at 137, nothing in the statute indicates that

this meaning was intended here or that any formal approval or

imprimatur is required. In fact, section 6110 itself makes clear

that CCA encompasses not only a formal “Internal Revenue

Service or Office of Chief Counsel position or policy concerning

a revenue provision” but “any legal interpretation of a revenue

provision.” 26 U.S.C. § 6110(i)(1)(A)(ii)(I)-(II) (emphasis

added). Thus, as is ordinarily the case, “issued” in section 6110

means simply “sent forth.” 

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Similarly, under common parlance—and common agency

principles—the phrase “prepared by any national office

component of the Office of Chief Counsel” includes advice

prepared by an individual OCC lawyer whether the lawyer

himself be considered a “component” of OCC, see III OED at

620 (defining “component” as “constituent element or part”), or

simply a member of an institutional component—such as the

Office of the Associate Chief Counsel—who prepares the

opinion on behalf of the institutional component, see generally

CCDM § 33.1.2 (JA 96 et seq.) (“Chief Counsel’s Legal Advice

Program”). The Chief Counsel Directives Manual itself

recognizes this plain meaning by treating unreviewed advice

prepared by a single OCC lawyer as advice prepared by a

“national component” of OCC, distinguishing between CCA

(disclosure of which is required) and non-CCA (disclosure of

which is not required) based on the amount of time spent in

preparation and not on the existence vel non of supervisory

review. See, e.g., id. exh. 33.1.2-1 (JA 102) (designating “legal

advice that can be rendered in less than two hours by a National

Office component” as “informal” “legal advice” that “need not

be released to the public”) (emphasis added); id.

§ 33.1.3.1.1(2)(c) (JA 105) (“[E]mail responses to questions

from the Field, if the response involves less than two hours of

research and preparation . . . is considered informal advice and

is not CCA. Conversely, if the time expended in researching

and preparing an email response consumes two or more hours,

then the email is not informal advice and may be CCA if it

meets the definition [of CCA].”). We note again that section

6110 expressly classifies as CCA not only a writing that conveys

an official “position or policy concerning a revenue provision”

but also one that contains “any legal interpretation of a revenue

provision.” 26 U.S.C. § 6110(i)(1)(A)(ii)(I)-(II). 

In sum, the language of section 6110 expressly and broadly

requires disclosure as Chief Counsel advice, without further

qualification, of “written advice or instruction, under whatever

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Because the meaning of section 6110 is plain on its face, we

decline the IRS’s invitation to plumb the legislative history to

ascertain congressional intent. As the district court observed, “courts

‘ “do not resort to legislative history to cloud a statutory text that is

clear.” ’ ” Tax Analysts, C.A. No. 05-0934, slip op. at 12 (quoting

AT&T Corp v. FCC, 317 F.3d 227, 235 (D.C. Cir. 2003) (quoting

Ratzlaf v. United States, 510 U.S. 135, 147-48 (1994))).

name or designation, prepared by any national office component

of the Office of Chief Counsel . . . issued to field or service

center employees of the Service or regional or district

employees of the Office of Chief Counsel [which] conveys . . .

any legal interpretation of a revenue provision.” Id.

§ 6110(i)(1)(A) (emphases added). It requires no particular

form or formality. Nor does it distinguish between advice a

lawyer renders in less than two hours and advice that takes

longer than two hours to prepare. Thus, given the broad

definition of “Chief Counsel advice” in section 6110(i)(1)(A),

we believe that the temporal distinction the IRS draws in its

two-hour disclosure rule is contrary to the unequivocal statutory

directive that a “written determination,” defined to include

“Chief Counsel advice” without exception, “shall be open to

public inspection,” 26 U.S.C. § 6110(a). The IRS cannot,

therefore, consistent with the plain language of 26 U.S.C.

§ 6110, rely on the two-hour rule to avoid disclosing legal

advice rendered in under two hours.3

For the foregoing reasons, we conclude that the documents

Tax Analysts seeks plainly fall within the statutory definition of

“Chief Counsel advice,” which 26 U.S.C. § 6110 requires be

available for inspection. Accordingly, we affirm the district

court’s grant of summary judgment in favor of Tax Analysts. 

So ordered.

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