SUPERIOR COURT OF NEW JERSEY

APPELLATE DIVISION

DOCKET NO. A-4242-18T2

WILLIAM MARK SCOTT,

Appellant,

v.

NJ HEALTH CARE FACILITIES

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 Jersey 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NOT FOR PUBLICATION WITHOUT THE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 APPELLATE DIVISION

This opinion shall not "constitute precedent or be binding upon any court." Although 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. R. 1:36-3.

January 13, 2021
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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 intervenorrespondent 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

Appellant 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-1 to -13, 

for the production of federal tax return information of respondent Deborah Heart 

and Lung Center (Deborah) in the possession of respondent New Jersey Health 

Care Facilities Financing Authority (HCFFA). We affirm.

I.

The following facts are derived from the record. In 1993, 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 to 
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Deborah, which used the funds to refinance an earlier issue of bonds and to pay 

for additions and renovations to its hospital 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 that 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. During the examination, HCFFA provided 

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 documents it provided to the IRS concerning the transaction came from 

Deborah. The IRS, Deborah, and HCFFA eventually executed a settlement 

agreement 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] concerning an IRS 
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examination of, and negotiation or settlement of the examination dispute relating 

to" the Bonds.

On August 4, 2015, the HCFFA custodian of records denied Scott's 

request pursuant to N.J.S.A. 47:1A-9(a), which prohibits the disclosure of 

documents that are confidential under any other 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 the 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 requested because an IRS publication states 

that HCFFA 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 Deborah, are the 

tax records of HCFFA, not of Deborah. Scott argued 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 information, Section 6103 does not prohibit 

production of those records by HCFFA. According to Scott, Section 6103 
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prohibits disclosure of tax return information by three categories of persons, 

none of which is applicable to HCFFA and its employees.

Before the GRC, the HCFFA custodian compiled a list of records 

responsive 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 inquiries, a certificate of non-arbitrage and 

other tax matters, lease agreements, the total return swap letter agreement and 

tender offer, redemption notices, IRS extension letters, and various 

confirmations, certificates, and letters relating to the total return swap

transaction. HCFFA argued that despite it being considered 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 the Bonds and role the authority played 

in the examination. In addition, HCFFA argued that the definition of tax return

information in Section 6103 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 substantively parallel those of HCFFA.

On April 30, 2019, the GRC issued 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 found 
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that the HCFFA custodian provided a sufficient response to his request by citing 

the statutory basis for the denial of access. In addition, the GRC concluded that

the HCFFA custodian did not unlawfully deny Scott access to the records he 

requested because those records contained Deborah's tax return information 

within the meaning of Section 6103, which applied to HCFFA and its 

employees. Thus, the GRC concluded, production of those records 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 RECORDS THE 

AUTHORITY RECEIVED FROM THE I.R.S.
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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 to be 'arbitrary, capricious, or 

unreasonable, or [] not supported by substantial credible evidence in the record 

as a whole.'" Id. at 202 (quoting Stallworth, 208 N.J. at 194). However, 

"determinations about the applicability of OPRA and its exemptions are 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, 410 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 intent of 

the Legislature.'" Id. at 274 (quoting Murray v. Plainfield Rescue Squad, 210 

N.J. 581, 592 (2012)).

"The purpose of OPRA is to maximize public knowledge about public 

affairs in order to ensure an informed citizenry and to minimize the evils 
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inherent in a secluded process." O'Shea, 410 N.J. Super. at 379 (quoting Times 

of Trenton Publ'g Corp. v. Lafayette Yard Community Dev. Corp., 183 N.J. 519, 

535 (2005) (internal quotations omitted)). Accordingly, the statute provides that 

"government records shall 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 

exceptions. A "[g]overnment record" includes

any paper . . . document . . . data processed or image 

processed document, information stored or maintained 

electronically . . . or any copy thereof, that has been 

made, maintained or kept on file in the course of his or 

its official business by any officer . . . agency or 

authority of the State . . . or that has been received in 

the course 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 

heretofore made pursuant to . . . any federal law . . . ."

Section 6103, a federal law, provides in relevant part that

(a) . . . Returns and return information shall be 

confidential, and except as authorized by this title –
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. . . .

(2) no officer or employee of any State, any local law 

enforcement agency receiving information under 

section (i)(1)(C) or (7)(A), any local child support 

enforcement agency, 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 

provision of this section.

[26 U.S.C.A. § 6103(a).]

"Return 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 other 

investigation or processing, or any other data, received 

by, recorded by, prepared by, furnished to, or collected 

by the Secretary with respect to a return or with respect 

to the determination of the existence, or possible 

existence, of liability (or the amount thereof) of any 

person under this title for any tax, penalty, interest, 

fine, forfeiture, or other imposition, or offense . . . .

. . . .
10 A-4242-18T2

(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 titled "Closing agreements" which are defined as "agreement[s] 

in writing with any person relating to the liability of such person . . . in respect 

of any internal revenue tax for any taxable period." 26 U.S.C.A. § 7121(a).

Scott disputes that the information he requested falls within the broad 

definition of return information under Section 6103, an argument he did not raise 

before the GRC. In addition, he reiterates his argument that: (1) if the 

information he requests is return information, it is the return information of 

HCFFA, not Deborah; and (2) alternatively, if information he requests is the 

return information of Deborah, Section 6103 does not preclude 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 the 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-4242-18T2

For example, the "broad definition . . . is sufficient to include documents 

produced during an initial IRS investigation of an organization seeking taxexempt status." Ibid. See also Church of Scientology of Cal. v. IRS, 484 U.S. 

9, 14 (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. Okla. 1978) (holding that IRS investigation results 

of a tax-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 between HCFFA and the IRS 

during an examination of whether the total return swap transaction 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 collected 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 closing 

agreement that the IRS, HCFFA, and Deborah ultimately executed to conclude 

the examination, which is protected from disclosure by Section 6103, as is the 
12 A-4242-18T2

"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 liabilities

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 during its examination of the 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 obtaining 

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 

contention 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 argument to provide a complete analysis 

of whether the information he requests is exempt from disclosure.
13 A-4242-18T2

been altered by that 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 policy of encouraging the production of 

documents containing tax information by entities whose financial transactions 

are examined by the IRS. To the contrary, such an interpretation of Section 

6103 would impede cooperation among the issuers of government bonds 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." As 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 statutory protection afforded to Deborah in 
14 A-4242-18T2

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 this 

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 examination commenced. The documents 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 if 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 

Section 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 HCFFA 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 officer 
15 A-4242-18T2

or an employee or otherwise under the provisions of this section." 26 U.S.C.A. 

§6103(a)(2). To advance his narrow interpretation of Section 6103, Scott relies 

on provisions of the statute that apply to officers and employees of local law 

enforcement agencies, local child support enforcement 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 have 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.