SUPERIOR COURT OF NEW JERSEY APPELLATE DIVISION DOCKET NO . A

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- 18T2 WILLIAM MARK SCOTT, Appe llant,

v. NJ HEALTH CARE FAC ILITIES FINANCING AUTHORITY, Respondent, and
DEBORAH HEART AND LUNG CENTER,
Intervenor

- Respondent.

________________________ __ ____

Argued September 29, 2020

– Decided Before Judges Gooden Brown and DeAlmeida.
On appeal from the New Je rsey Government Records Council, GRC Complaint No. 2015

- 256. William Mark Scott, appellant, argued the cause pro se.

NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE A PPELLATE DIVISION This opinion shall not "constitute precedent or be binding upon any court

. " A lthough it is posted on the internet , this opinion is binding only on the parties in the case and its use in other cases is limited

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January 1 3 , 202 12 A

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- 18T2 Alison Keating, Deputy Attorney General argued the cause for respondent New Jersey Health Care Facilities Financing Authority (Gurbir S. Grewal, Attorney General, attorney; Donna Arons, Assistant Attorney General, of counsel; Alison Keating, Deputy Attorney General, on the brief). Robert A. Mintz argued the cause for intervenor

respondent Deborah Heart and Lung Center (McCarter & English, LLP, attorneys; Robert A. Mintz of counsel and on the brief ; James A. Kellar, on the brief). Gurbir S. Grewal, Attorney General, attorney for respondent Government Records Council (Debra A. Allen, Deputy Attorney General, on the statement in lieu of brief).
PER CURIAM Appellan t William Mark Scott appeals from the April 30, 2019 final agency decision of respondent Government Records Council (GRC) denying his request under the Open Public Records Act (OPRA), N.J.S.A. 47:1A

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- 13, for the productio n of federal tax return inform ation of respondent Deborah Heart and Lung Center (Deborah) in the possession of respondent New Jersey H ealth Care Facilities Financing A uthority (H C FFA). We affirm.
I. The following facts are derived from the record . In 19 93, HCFFA , a public authority, issued tax

- exempt conduit bonds (the Bonds) for the benefit of Deborah , a non - profit hospital. The proceeds of the Bonds were loaned to3 A

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Deborah, which used the funds to refinance an earlier issue of bonds and to pay for addi tions and renovations to its h ospital facilities

. The Bonds were payable solely from payments made by Deborah to HCFFA under a loan agreement. Deborah subsequently initiated a total return swap transaction to reduce its interest obligation on the Bonds. HCFFA was not a party to th at secondary market transaction. In 2010, the Internal Revenue Service (IRS) initiated an examination of the total return swap transaction and the impact , if any, it had on the federal tax treatment of interest on the Bonds. D uring the examination, HCFFA p rovided the IRS with copies of documents relating to the issuance of the Bonds. In addition, HCFFA became aware of the total return swap transaction, and solicited documents from Deborah related to that transaction , which it forwarded to the IRS

. Because HCFFA was not a party to the total return swap transaction, all of the document s it provided to the IRS concerning the transaction came from Deborah. The IRS, Deborah, and HCFFA eventually executed a settlement
agre ement that brought the examination to a conclusion. On July 30, 2015, Scott filed an OPRA request with the custodian of records for HCFFA for "[a]ll correspondence (including information document requests) and agreements between [HCFFA] and the [IRS] conc erning an IRS4 A

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examination of, and negot iation or settlement of the examination dispute relating to" the Bonds. On August 4, 201 5 , the HCFFA custodian of records denied Scott's request pursuant to N.J.S.A. 47:1A

- 9 (a) , which prohibits the disclosure of docu ments that are confidential under any o ther statute. The custodian determined that the requested information contained Deborah's federal tax return information protected from disclosure under 26 U.S.C.A. § 6103 (Section 6103)

. On August 5 , 2015, Scott filed a denial of access complaint with t he GRC. He argued that the HCFFA custodian provided an insufficient explanation for the denial of his public records request . In addition, he argued that Section 6103 is not applicable to the records he requ ested because an IRS publication states that HC FFA is treated as the taxpayer for purposes of the examination of the Bonds. Thus, Scott argued , all correspondence between the IRS and HCFFA related to the examination , including documents obtained from Debo rah, are the tax records of HCFFA, not of Debor ah . Scott argue d that Section 6103 does not prohibit HCFFA from disclosing its own tax records

. In addition, Scott argued that even if the requested records contain Deborah's federal tax return i nformation, Section 6103 does not prohibit production of th ose records by HCFFA. According to Scott , Section 61035 A

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prohibits disclosure of tax return information by three categories of persons,

no ne of which is applicable to HCFFA and its employee s . Befor e the GRC, the HCFFA custodian compiled a list of records

r esponsive to Scott's request and the basis for denying their production . Those records include legal documents related to the issuance of the Bonds, rebate reports, detailed responses to IRS inqui ries, a certificate of non

- arbitrage and other tax matters, lease agreements, the total return swap letter agreement and tender offer, redemption notice s , IRS extension letters, and various confirmations, certificates, and letters relating to the total ret urn swap transaction. HCFFA argued that despite it being c onsidered the taxpayer by the IRS during the examination, the records Scott seeks are the de facto tax records of Deborah due to the conduit nature of t he Bonds and role the authority played in the examination

. In addition, HCFFA argued that the definitio n of tax return information in Section 61 0 3 is broad and the prohibition on disclosure applies to it and its employees. Deborah moved to intervene before the GRC , seeking to make arguments that su bstantively parallel those of HCFFA

. On April 30, 2019, th e GRC issue d its final agency decision upholding HCFFA's denial of Scott's records request. As an initial matter , the GRC granted Deborah's motion to intervene

. On Scott's substantive claims, the GRC found6 A

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that the HCFFA custodian provided a sufficient r esponse to his request by citing the statutory basis for the denial of access . In addition, the GRC concluded that the HCFFA custodia n did not unlawfully deny Scott access to the records he requested because those records contained Deborah's tax return in formation within the meaning of Section 6103 , which applied to HCFFA and its employees . Thus, the GRC concluded, production of those r ecords was properly denied under N.J.S.A. 47:1A

- 9(a). This appeal follows. Scott raises the following arguments.
POINT I
A DE NOVO STANDARD OF REVIEW APPLIES. POINT II THE GOVERNMENT RECORD[S] COUN[CIL'S] DETERMINATION IS PROFOUNDLY WRONG. POINT III COPIES OF RECORDS SENT TO THE I.R.S. ARE NOT RETURNS OR RETURN INFORMATION.
POINT IV THE CUSTODIAN MAY DISCLOSE RECORD S THE AUTHORITY RECEIVED FROM THE I.R.S.7 A

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- 18T2 POINT V DISCLOSURE IS NOT SUBJECT TO A QUALIFIED PRIVILEGE.
II. Our review of an administrative agency's final decision is limited. Kadonsky v. Lee , 452 N.J. Super. 198, 201

- 02 (App. Div. 2017) (citing In re Stallworth , 208 N.J. 182, 194 (2011)). "We will not reverse an agency's judgment unless we find the decision t o be 'arbitrary, capricious, or unreasonable, or [] not supported by substantial credible evidence in the record as a whole.'" Id. at 202 (quoti ng Stallworth , 208 N.J. at 194). However,

" d eterminations about the applicability of OPRA and its exemptions a re legal conclusions" subject to de novo review. In re N.J. Firemen's Ass'n , 230 N.J. 258, 273

- 74 (2017) (citing O'Shea v. Twp. of W. Milford , 4 10 N.J. Super. 371, 379 (App. Div. 2009); Asbury Park Press v. Cty. of Monmouth , 406 N.J. Super. 1, 6 (App. Div . 2009), aff'd o.b. , 201 N.J. 5 (2010)) . "As always, our primary 'objective [in] statutory interpretation is to discern and effectuate the inten t of the Legislature.'" Id. at 274 (quoting Murray v. Plainfie l d Rescue Squad , 210 N.J. 581, 592 (2012)).
"Th e purpose of OPRA is to maximize public knowledge about public affairs in order to ensure an informed citizenry and to minimize the evils8 A

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inheren t in a secluded process." O'Shea , 410 N.J. Super. at 379 (quoting Times of Trenton Publ'g Corp. v. Lafayette Y ard C o mmunity Dev. Corp. , 183 N.J. 519, 535 (2005) (internal quotations omitted)). Accordingly, the statute provides that "government records sh all be readily accessible for inspection, copying, or examination . . . with certain exceptions, for the protection of the public interest
. . . ." N.J.S.A. 47:1A

- 1. The present appeal turns on the parameters of one of the statutory exception s . A "[g]ov ernment record" includes

any paper . . . document . . . data processed or image processed document, infor mation stored or maintained electronically . . . or any copy there of , that has been made, maintained or kept on file in the course of his or its offici al business by any officer . . . agency or authority of the State . . . or that has been received in the cour se of his or its official business by such officer . . . agency, or authority . . . . [N.J.S.A. 47:1A

- 1.1.] However, N.J.S.A. 47:1A

- 9(a) provides that OPRA "shall not abrogate any exemption of a public record or government record from public access
h eretofore made pursuant to . . . any federal law . . . ." Section 6103 , a federal law, provides in relevant part that (a)

. . . Returns and return in formation shall be confidential, and except as authorized by this title

–9 A

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- 18T2 . . . . (2) no officer or e mployee of any State, any local law enforcement agency receiving information under section (i)(1)(C) or (7)(A), any local child support enforcement age ncy , or any local agency administering a program listed in subsection (l)(7)(D) who had or had access to returns or return information under this section or section 6104 (c) . . .

. . . . shall disclose any return or return information obtained by him in any manner in connection with his service as such an officer or an employee or otherwise under this provi sion of this section. [26 U.S.C.A. § 6103 (a) .]

" R eturn information " is defined broadly as

(A) 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 ot her investigation or processing, or any other data, received by, recorded by, prepared by, furnished t o, 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 t he amount thereof) of any person under this title for any tax, penalty, interest, fine, forfeiture, or other imposition, or offense

. . . .

. . . .10 A

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- 18T2 (D) any agreement under section 7121, or any similar agreement, and any background information related to such an agreement or request for such an agreement. [26 U.S.C.A. § 6103(b)(2).] Section 7121 is titl e d "Closing agreements" which are defined as "agreement[s] in writing with any person relating to the liability of such person . . . in respect of any int ernal revenue tax for any taxable period." 26 U.S.C.A. § 7121(a). Scott dispute s that the information he request ed falls within the broad definition of return information under Section 6103 , an argument he did not raise before the GRC

. In addition, he r eiterates his argument that: (1) if the information he requests is return informat ion , it is the return information of
HCFFA , not Deborah; and (2) a lternatively, if information he requests is the return information of Deborah, Section 6103 does not preclud e HCFFA from disclosing that information

. Having carefully reviewed the record in light of the unequivocal language of Section 6103, we conclude that Scott's arguments are without merit. We briefly address his arguments in turn.

" ' [R]eturn information' is defined broadly by the statute to include almost any information compiled by th e IRS in connection with its determination of a taxpayer's liability. " Lehrfeld v. Richardson , 954 F. Supp. 9, 13 (D.D.C. 1996).11 A

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For example, the " broad definition . . . is sufficient to include documents produced during an initial IR S investigation of a n organization seeking tax

exempt status." Ibid. See also Church of Scientology of Ca l . v. IRS , 484 U.S. 9, 1 4 (1987) ("[A]s a practical matter, 'return information' might include the report of an audit examination, internal IRS correspondence concerning a taxpayer's claim, or a notice of deficiency by the IRS

. . . . "); Belisle v. Comm'r , 462 F. Supp. 460, 462 (W.D. Ok la . 1978) (holding that IRS investigation results of a t ax - exempt corporation were confidential under Section 6103); Tax Analysts v. IRS , 53 F. Supp. 2d 449 (D.D.C. 1999) (holding that closing agreements constitute "return information" not subject to disclosure). The information Scott seeks was exchanged betwe en HCFFA and the IRS during an examination of whether the total return swap transa ction had an impact on the tax

- exempt status of interest paid pursuant to the Bonds. This information is "data, received by, recorded by, prepared by, furnished to, or colle cted by the Secretary with respect to . . . the determination of the existence, or possible existence, of liability . . . of any person . . . for any tax," 26 U.S.C.A. § 6103, and falls within the broad scope of the statute. The same is true for the closi ng agreement that the IRS, HCFFA, and Deborah ultimately executed to conclude the examination , which is protected from disclosure by Section 6103, as is the12 A

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"background information related to such an agreement or request for such an agreement

. . . . " 26 U.S.C.A. § 6103 (b)(2)(D)

. Scott's cabined interpretation of Section 6103 does not comport with its unequivocal terms or the evident intention of Congress to provide broad protection to taxpayers who produce information to the IRS to facilitate that agency 's determination of tax l iabilities and to the background information those taxpayers retain after an IRS examination that resulted in a closing agreement

. 1 Nor do we agree with Scott's argument that because HCFFA is considered the taxpayer by the IRS dur ing its examination of t he tax

- exempt status of the Bonds all of the information HCFFA received from Deborah and forwarded to the IRS is transformed into HCFFA's return information . Because HCFFA was the entity that issued the Bonds the IRS considered it responsible for obtaini ng the necessary information from Deborah , which was a party to the total return
swap transaction, to determine whether the tax

- exempt status of the Bonds had

1 We acknowledge Deborah's argument that we should not consider Scott's co ntention that the information he requested is not return information because he failed to raise that argument before the GRC. See N.J. Div. of Youth & Family Servs. v. M.C. III , 201 N.J. 328, 339 (2010) ("We have often stated that issues not raised below will ordinarily not be considered on appeal unless they are jurisdictional in nature or substantially implicate the public interest."). Given that the Legislature has recognized the public interest in access to government records, we address Scott's argum ent to provide a complete analysis of whether the information he requests is exempt from disclosure.13 A

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been altered by th at transaction

. Scott cites no legal authority, and we can find none, holding that HCFFA's role as a conduit to the IRS for Deborah's return information converted Deborah's return information into the return information of HCFFA. There is no evident argument that such an interpretation of Section 6103 would advance the public polic y of encouraging the production of documents containing tax information by entities whose financial transactions are examin ed by the IRS. To the contrary, such an interpretation of Section 6103 would impede cooperation among the is suers of government bond s and the beneficiaries of those instruments during an IRS examination. In support of his argument, Scott relies on a IRS publication that states that "[t]he issuer of the municipal debt is treated as the 'taxpayer' throughout the examination process." A s a threshold matter, the publication appears to apply to municipal debt. HCFFA is not a municipality , but a State authority. Scott does not address this discrepancy or cite to legal authority for the proposition that debt issued by a State authority is considered municipal debt by the IRS. Even if we were to assume that the Bonds are considered municipal debt for purposes of the publication, Scott cites to no legal precedent supporting the notion that the IRS can abrogate the sta tutory protection afford ed to Deborah in14 A

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Section 6103 through issuance of a publication that, in effect, transforms Deborah's tax return information into HCFFA's tax return information

. Nor would an erosion of the protections afforded by Section 6103 in t his fashion comport with the statute's overall structure. The IRS examination of the total return swap transaction was directed at Deborah, which participated in the transaction, and not HCFFA, which was unaware of the transaction until after the examinat ion commenced. The docu ments at issue, which were obtained from Deborah's files, contain Deborah's tax information and the details of its financial transaction, not the sensitive information of the HCFFA. The protections provided by Section 6103 would be considerably weakened i f the IRS could abrogate the statute's confidentiality protections merely by requiring a third party tangentially related to a financial transaction to collect and forward information from other taxpayers involved in the transaction . We do not see in
Sect ion 6103 any provision suggesting the confidentiality of a taxpayer's return information is subject to such ready abrogation by the IRS. Finally, we disagree with Scott's strained interpretation of Section 6103's applicability to H CFFA and its employees. The statute plainly provides that "no officer or employee of any State . . . shall disclose any . . . return information obtained by him in any manner in connection with his service as such an officer15 A

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or an employee or otherwise un der the provisions of this section." 26 U.S.C.A. §6103(a)(2). To advance his narrow interpretation of Section 6103, Scott relies on provision s of the statute th at apply to officers and employees of local law enforcement agencies, local child support enfo rcement agencies, and local agencies administering certain federal programs. It is evident that those provisions do not apply to HCFFA or it employees or comport with the statute's overall purpose of providing protection to taxpayers

. To the extent we ha ve not specifically addressed any of Scott's remaining arguments , we conclude they lack sufficient merit to warrant discussion in a written opinion. R. 2:11

- 3(e) (1)(E). Affirmed.