United States Court of Appeals

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued May 10, 2005 Decided June 7, 2005

No. 04-5304

TAX ANALYSTS,

APPELLANT

v.

INTERNAL REVENUE SERVICE AND

CHRISTIAN BROADCASTING NETWORK, INC.,

APPELLEES

Appeal from the United States District Court

for the District of Columbia

(No. 98cv02345)

William A. Dobrovir argued the cause for appellant. With

him on the briefs was Cornish F. Hitchcock.

Teresa T. Milton, Attorney, U.S. Department of Justice,

argued the cause for appellee Internal Revenue Service. With

her on the brief were Kenneth L. Wainstein, U.S. Attorney, and

Jonathan S. Cohen, Attorney.

Bruce C. Bishop and J. William Koegel, Jr. were on the

brief for appellee Christian Broadcasting Network, Inc.

Before: GINSBURG, Chief Judge, and SENTELLE and

HENDERSON, Circuit Judges.
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Opinion for the Court filed by Circuit Judge SENTELLE.

SENTELLE, Circuit Judge: Tax Analysts (“TA”), a publisher

of tax materials, sued the Internal Revenue Service (“IRS” or

“the Service”) and the Christian Broadcasting Network (“CBN”)

under the Freedom of Information Act (“FOIA”) and the

Internal Revenue Code in an effort to obtain copies of a closing

agreement reached between the IRS and CBN in connection

with CBN’s filing for tax-exempt status. The District Court

dismissed the action against both defendants. On appeal, in Tax

Analysts v. Internal Revenue Service, 214 F.3d 179 (D.C. Cir.

2000), we affirmed the judgment of dismissal as to CBN, but

remanded for further proceedings the claim against the IRS. In

the remand order, we directed the provision of further discovery

before entry of dispositive judgment. Following some

discovery, which TA contends was inadequate, the District

Court granted summary judgment in favor of the IRS. TA once

again appeals, arguing that the IRS failed to meet its burden

under FOIA, the Internal Revenue Code, Treasury regulations,

and case law of this Circuit by showing that withheld documents

were exempt from FOIA’s disclosure requirements. For the

reasons set forth below, we affirm the District Court’s judgment.

I. Background

A. The Underlying Controversy

We detailed the facts underlying this controversy in

disposing of the previous appeal of this case, Tax Analysts v.

InternalRevenueService, 214 F.3d 179, 181-83 (D.C.Cir.2000)

(“Tax Analysts I”). We incorporate that discussion by reference,

and reiterate facts only as necessary for the purposes of

resolving the matter now before us.
3

TA publishes tax materials. It sued the IRS and CBN under

FOIA and the Internal Revenue Code (both discussed below) to

obtain copies of a CBN-IRS closing agreement regarding taxes

due for previous taxable years. The closing agreement was

reached in the same time period during which CBN secured taxexempt status going forward. In our previous opinion, this

Court described the closing agreement as being reached “in

conjunction” with CBN’s tax-exemption filing.

CBN had been a tax-exempt 501(c)(3) organization since

1961. In 1985 and 1986, CBN allegedly engaged in political

activities in support of presidential candidate and CBN founder

Pat Robertson. The IRS audited CBN regarding CBN’s past and

continued eligibility for tax-exempt status.

CBN filed a Form 1023 Application for Exempt Status on

February 2, 1998; the IRS granted the application on March 13,

1998, retroactive to April 1, 1987. On March 16, CBN issued a

press release announcing that it had entered into an agreement

with the IRS to conclude an audit and to preserve its exempt

status; the press release announced both the closing agreement

regarding previous taxable years and the Form 1023 regarding

the period subsequent to those years.

On April 6, 1998, TA sent a FOIA request to the IRS

seeking the following: a copy of the closing agreement

mentioned in the press release; any closing agreement relating

to the issues noted in the press release; any written

correspondence or memoranda of conversations between CBN

and the IRS pertaining to those agreements; and any renewal,

revocation, or modification of any ruling granting tax-exempt

status to CBN.

On June 29, 1998, the IRS responded. Citing FOIA

Exemption 3, 5 U.S.C. § 552(b)(3), and I.R.C. § 6103, 26 U.S.C.
4

§ 6103, the Service declined to disclose any of the requested

information except for the February 1998 Form 1023 filing and

the March 1998 determination letter. On July 20, 1998, TA sent

a letter to CBN requesting the same information. CBN, like the

IRS, declined to produce any document except for the Form

1023 and the determination letter. Shortly thereafter, TA filed

this action against the IRS and CBN.

B. Statutory and Regulatory Framework

The Freedom of Information Act sets forth a basic rule for

disclosure of federal records, 5 U.S.C. § 552(a), but includes a

number of exceptions, including an exception for documents

specifically exempted by statute, commonly referred to as

“FOIA Exemption 3.” Id. § 552(b)(3). The Internal Revenue

Code sets forth a basic rule regarding public disclosure of

documents pertaining to application for tax-exempt status:

[For organizations exempt under Section 501(c) or (d)] the

application filed by the organization with respect to which

the Secretary made his determination that such organization

was entitled to exemption . . . , together with any papers

submitted in support of such application or notice, and any

letter or other document issued by the Internal Revenue

Service with respect to such application or notice shall be

open to public inspection at the national office of the

Internal Revenue Service.

I.R.C. § 6104(a)(1)(A) (emphasis added). By contrast, Section

6103 explicitly protects the confidentiality of such tax return

information as closing agreements, so long as the return

information is not subject to disclosure under Section 6104. Tax

Analysts I, 214 F.3d at 183 (characterizing Section 6104 as “an

exception to the exception from the general disclosure rule

offered by FOIA Exemption 3 and I.R.C. § 6103”). This Court
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has already held that the fact that Section 6103 is a statute

“contemplated by FOIA Exemption 3 is beyond dispute.” Tax

Analysts v. IRS, 117 F.3d 607, 611 (D.C. Cir. 1997).

The U.S. Department of the Treasury (“Treasury”)

implemented Section 6104 with Treasury Regulation section

301.6104(a)-1, 26 C.F.R. § 301.6104(a)-1. Section (a) of this

rule essentially mirrors the statutory provision. Section (b)

defines “[l]etters or documents issued by the Internal Revenue

Service with respect to an application for tax exemption.”

Section (c) notes that no such documents will be made public

until the applicant “is determined, on the basis of the

application, to be exempt from taxation for any taxable year.”

Section (d) defines “application for tax exemption.” And

section (e) defines “supporting documents”:

Supporting documents defined. For purposes of this section,

“supporting documents”, as used with respect to an

application for tax exemption, means any statement or

document not described in paragraph (d)of thissectionthat

is submitted by an organization in support of its

application. For example, a legal brief submitted in support

of an application for tax exemption is a supporting

document.

Treas. Reg. § 301.6104(a)-1(e) (emphasis added). 

Finally, section (i) of the rule provides that certain

documents are never subject to Section 6104 disclosure, even

when they relate to tax-exempt organizations. This list includes

“[u]nfavorable rulings or determination letters . . . issued in

response to applications for tax exemption,” Treas. Reg. §

301.6401(a)-1(i)(1), and “[a]ny other letter or document filed

with or issued by the Internal Revenue Service which, although

it relates to an organization’s tax exempt status as an
6

organization described in section 501(c) or (d), does not relate

to that organization’s application for tax exemption, within the

meaning of paragraph (d).” Id. § 301.6401(a)-1(i)(6).

Tax returns and return information remain confidential

except where provided to the contrary. I.R.C. § 6103(a).

Closing agreements contain such information, but it is at least

theoretically possible that they may contain information subject

to disclosure under Section 6104(a)(1)(A). We identified this

intersection of the two sections in the previous appeal in this

case, but noted that the parties agreed on that reading of the law

and only disputed whether the closing agreement was subject to

disclosure. Tax Analysts I, 214 F.3d at 184-85.

C. The First Round of Litigation: Trial and Appeal

The District Court did not examine any of the documents in

question before dismissing TA’s complaint. The court

concluded from the pleadings that requested information

represented a closing agreement under I.R.C. § 7121(a), and was

therefore a tax return exempt from disclosure under Section

6103 and FOIA Exemption 3. It granted judgment under FED.

R. CIV. P. 12(c). The court also concluded that Section 6104

provides no private right of action against a tax-exemption

applicant, and dismissed the claim against CBN under FED. R.

CIV. P. 12(b)(6).

This Court affirmed the Rule 12(b)(6) dismissal of the claim

against CBN, Tax Analysts I, 214 F.3d at 186, but vacated the

12(c) dismissal and remanded, holding that Section 6103 does

not exclude all closing agreements and their documentary

precursors. Instead, that provision only excludes those

agreements which are not “any papers submitted” or “any letter

or document issued”subject to public disclosure under Section

6104(a)(1)(A). 214 F.3d at 184-85 (emphasis added by the
7

Court). We concluded this analysis with the following

instruction for the District Court on remand:

At bottom, the case before us does not present a

disagreement over the law to be applied, but the narrow and

fact-specific question of whether the closing agreement

between the IRS and CBN and any accompanying

documentation represent material disclosable under I.R.C.

§ 6104(a)(1)(A), despite their apparent status as material

exempt from disclosure under I.R.C. § 6103. As the present

record is inadequate for such determination, further

discovery is necessary. We therefore vacate the district

court’s judgment in favor of the IRS and remand for further

proceedings consistent with this opinion. We leave to the

district court in the first instance the question of whetherin

camera examination or the filing of a Vaughn index is

sufficient to create an adequate record upon which to base

the disclosability determination.

214 F.3d at 185 (emphasis added).

D. On Remand

On remand, the IRS filed a motion for summary judgment,

accompanied by a statement of material facts with attached

declarations. One of the declarants was Steven Miller, thenDirector of Exempt Organizations in the IRS’s Tax Exempt and

Government Entities Operating Division. Miller had been

involved in the CBN-IRS negotiations. On inspection of 13

boxes of documents relevant to the matter, he stated that the

boxes contained memos and correspondence on resolution of

CBN’s past returns. The other declarant, Sanford Ayers,

Executive Assistant to Miller, was familiar with 19 more boxes

and a file cabinet of materials, all related to the past returns.

According to Miller, discussions regarding the tax-exempt status
8

going forward involved no documents in connection with CBN’s

February 1998 tax-exemption application and the materials

supporting that application. As such, all documents required to

be disclosed had already been disclosed.

TA opposed the motion, disputing some of the allegations

of fact and requesting discovery. The District Court granted TA

discovery in the form of deposition testimony. But the court

limited questioning regarding the “substance” of materials so as

to not “go beyond what would be disclosed by a Vaughn

affidavit.” Miller was deposed, and identified documents that

were dated after August 1996, the time at which the subject of

the new tax exemption had been raised. TA requested that the

IRS produce those documents. Instead, on July 20, 2001, the

IRS submitted a Vaughn Index describing the documents at

issue and explaining the reasons why each document was not

disclosable. The documents were as follows:

i. A draft application for tax-exempt status (“TES”);

ii. A March 6, 1997 letter from CBN to the IRS

enclosing a draft closing agreement;

iii. A Form 1023 Application for TES, submitted

April 15, 1997;

iv. An August 12, 1997 letter from Miller to CBN

regarding issues arising from the April 1997 TES

application;

v. An October 3, 1997 letter from CBN to the IRS

with draft responses to the August 1997 letter;

vi. A November 10, 1997 letter from CBN

withdrawing the April 1997 application; and
9

vii. A November 17, 1997 letter from CBN

responding to the August 1997 letter.

JA 174-83. Later, the IRS filed a supplemental Vaughn Index

identifying one more document:

viii. A February 21, 1997 letter from CBN’s counsel to

the IRS with three attachments: two draft closing

agreements, and a list of related issues.

JA 197. TA filed a motion to compel Miller to answer more

questions; the District Court denied this motion and scheduled

a status hearing. The Court conducted an in camera review of

the closing agreement.

On February 25, 2004, the District Court granted the

Service’s motion for summary judgment. Tax Analysts v. IRS,

No. 98-2345 (D.D.C. Feb. 25, 2004) (“Memo Op.”), reprinted

at JA 260. The Court held in its memorandum opinion that the

documents were not submitted “with, or in support of, [CBN’s]

application for tax exempt status.” Memo Op. at 1. The closing

agreement itself, viewed by the Court, made “only passing

reference to the [CBN] application for tax exempt status,” and

that reference indicated that the application had “already been

approved.” Memo Op. at 3. Because the closing agreement was

not “submitted with, or in support of, CBN’s application for tax

exempt status,” it was not subject to disclosure under I.R.C. §

6104(a)(1)(A). Id.

The Court then amended its decision so as to also grant

summary judgment for the IRS on all claims regarding the eight

Vaughn Index documents, on the same grounds. Tax Analysts

v. IRS, No. 98-2345 (D.D.C. Aug. 19, 2004), reprinted at JA

271-72. TA timely filed this appeal.
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II. Analysis

A.

The standard governing a grant of summary judgment in

favor of an agency that claims it has fully discharged its

FOIA disclosure obligations is well established. . . . The

agency must show, viewing the facts in the light most

favorable to the requester, that there is no genuine issue of

material fact. . . . We review the issue de novo on the

district court record.

Lopez v. DOJ, 393 F.3d 1345, 1348-49 (D.C. Cir. 2005)

(quoting Steinberg v. DOJ, 23 F.3d 548, 551 (D.C. Cir. 1994)).

This Court reviews the District Court’s discovery rulings for

abuse of discretion. Stewart v. Evans, 351 F.3d 1239, 1245

(D.C. Cir. 2003).

B.

In remanding this matter to the District Court for it to

develop further the record on which it was to determine whether

the materials requested were subject to Section 6104 disclosure,

we provided instructions for the means by which the court was

to construct such a record: “We leave to the district court in the

first instance the question of whether in camera examination or

the filing of a Vaughn index is sufficient to create an adequate

record upon which to base the disclosability determination.”

214 F.3d at 185. The District Court has done no less.

As described above, the court allowed the IRS to avoid

voluminous Vaughn Index submissions by relying on a mix of

deposition testimony, declarations, a Vaughn Index, and in

camera review to identify and evaluate documents possibly

implicated by Tax Analysts’s disclosure requests. The District
11

Court did not abuse its discretion in adopting this approach.

AlyeskaPipeline Serv. Co. v. EPA, 856 F.2d 309, 315 (D.C. Cir.

1988) (holding that agency affidavits carried agency’s burden of

proof under FOIA); Mapother v. DOJ, 3 F.3d 1533, 1539-40

(D.C. Cir. 1993) (relying on in camera review of documents to

determine that information was subject to FOIA disclosure).

Indeed, we suggested such a process in the first appeal. 214

F.3d at 185.

Tax Analysts argues that because this Court remanded the

proceedings for “some review of the content of the documents

in question,” id., the District Court erred by not requiring the

Service to respond to Tax Analysts’s inquiries into the content

of various documents. Br. for Appellants at 36 (citing Depo. of

Miller, reprinted at JA 204-22). Therefore, they argue, the

District Court’s judgment violated the express order of this

Court.

But Tax Analysts reads this Court’s holding too broadly: in

remanding the matter for “some review of the content,” we did

not require that the IRS provide disclosure in excess of that

which would have been provided in a full Vaughn Index of all

of the documents. The inquiry into the content of the documents

need only look deeply enough to satisfy the requirements of

Vaughn and its progeny: that is, to

force[] the government to analyze carefully any material

withheld, [to] enable[] the trial court to fulfill its duty of

ruling on the applicability of the exemption, and [to]

enable[] the adversary system to operate by giving the

requester as much information as possible, on the basis of

which he can present his case to the trial court.
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Keys v. DOJ, 830 F.2d 337, 349 (D.C. Cir. 1987) (collecting

cases and quoting Lykins v. DOJ, 725 F.2d 1455, 1463 (D.C.

Cir. 1984)).

This Court’s instructions are fulfilled if the District Court’s

inquiry into the documents is sufficient to demonstrate that the

Service rightfully withheld the documents from Tax Analysts.

As we describe in the following discussion, it has served that

purpose.

C.

Section 6104 of the Internal Revenue Code requires the

Service to disclose “the application filed by the organization

with respect to which the Secretary made his determination”

regarding CBN’s tax-exempt status and those documents which

were “submitted in support of such application or notice” or

which were “issued by the Internal Revenue Service with

respect to such application.” I.R.C. § 6104(a)(1)(A).

The parties disagree over whether the Code’s reference to

the “application” for tax-exempt status necessarily incorporates

all prior applications that precede the particular application

submission that is accepted by the Service. Tax Analysts argues

that “earlier submissions of CBN’s application” – in this case,

a draft application and a withdrawn application – were “part of

the negotiation of the terms of the final application that IRS

would grant,” Br. for Appellants at 45-46, and as such are

subject to disclosure as documents submitted in support of the

successful application. 

The IRS argues that, according to “longstanding policy,”

documents are disclosable “if they were actually submitted with

or in support of a successful application for tax-exempt status,

but not if they were merely exchanged in an informal process
13

leading up to the successful application and not included with

the application itself.” Br. for IRS at 39; see also Decl. of Miller

at 9-10 (Jan. 4, 2001) (describing Service practice). 

In support of this argument, the Service points to Treasury

Regulations section 301.6104(a)-1(e) and -1(i)(6). Neither of

those specifically defines as documents submitted “in support

of” an application only those documents submitted with an

application or submitted for the purpose of promoting a specific

application and only that application, though each is certainly

consistent with that interpretation. Those sections of the

regulations read as follows:

(e) Supporting documents defined. For purposes of this

section, “supporting documents”, as used with respect

to an application for tax exemption, means any

statement or document not described in paragraph (d)

of this section that is submitted by an organization in

support of its application. For example, a legal brief

submitted in support of an application for tax

exemption is a supporting document.

* * *

(i) Material not open to public inspection under section

6104 or 6110. 

* * *

(6) Any other letter or document filed with or issued

by the Internal Revenue Service which, although

it relates to an organization’s tax exempt status as

an organization described in section 501(c) or (d),

does not relate to that organization’s application

for tax exemption, within the meaning of
14

paragraph (d).

Treas. Reg. § 301.6104(a)-1. While these sections of the

Treasury Regulations are indeed consistent with a Service policy

that deems disclosable those documents that “were actually

submitted with or in support of a successful application for taxexempt status, but not . . . merely exchanged in an informal

process leading up to the successful application and not included

with the application itself,” such a policy is not commanded by

the regulations. By formulating the policy in terms of

documents “actually” submitted in support of the application, to

the exclusion of document submitted “in an informal process

leading up to the successful application and not included with

the application itself,” the Service imputes a definition to the

regulation that is not compelled by the text of the regulation. 

That said, because this is the agency’s interpretation of its

own regulation, we grant the agency great deference: “under

well-recognized precedent, we can reject the Secretary’s

interpretation only if ‘it is plainly erroneous or inconsistent with

the regulation.’” Sec’y of Labor v. Ohio Valley Coal Co., 359

F.3d 531, 534-35 (D.C. Cir. 2004) (quotingAkzo Nobel Salt,Inc.

v. FMSHRC, 212 F.3d 1301, 1303 (D.C. Cir. 2000)). The

proffered interpretation is neither inconsistent with the text nor

plainly erroneous. We readily defer to the agency.

Turning now to the nine documents at issue – to wit, the

final closing agreement and the eight other documents

enumerated at pages 8-9 above – we agree with the District

Court that the Service has met its burden to demonstrate that

each of the documents is exempt from disclosure under Section

6104. The Miller Declaration provided an exhaustive list of the

documents that comprised either “the application itself” and the

supporting “attachments” or the documents issued by the

Service with respect to CBN’s application. Miller Decl. ¶ 19,
15

reprinted at JA 79-81. The eight controverted documents for

which the Service provided a Vaughn Index were not among

these documents, and as such they do not constitute documents

submitted in support of the successful application or documents

issued by the Service with regard to the successful application.

As for the closing agreement itself, the District Court found

upon in camera review that “it makes only passing reference to

the application for tax exempt status as having already been

approved,” and as such it does not constitute a document

submitted in support of the application. Memo Op. at 3,

reprinted at JA 262. In sum, the Service has met its burden.

D.

Tax Analysts’s demand for further inquiry into the

substance of the documents would, if granted, turn FOIA on its

head, awarding Appellant in discovery the very remedy for

which it seeks to prevail in the suit. The courts must not grant

FOIA plaintiffs discovery that would be “tantamount to granting

the final relief sought.” Military Audit Project v. Casey, 656

F.2d 724, 734 (D.C. Cir. 1981). Cf. Cheney v. United States

Dist. Court, 124 S.Ct. 2576, 2591 (2004) (describing as

“anything but appropriate” those discovery requests which

“provide respondents all the disclosure to which they would be

entitled in the event they prevail on the merits, and much more

besides”). Under the limited requirements of FOIA and Sections

6103 and 6104 of the Internal Revenue Code, the IRS has met

its burden, and we therefore affirm the District Court’s grant of

summary judgment.