UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA

_____ _______________________________ ) MONTE S ILVER
, et al.

, ) ) Plaintiff s , )

)

v. ) Civil Action No. 2 2

- 13 ( RBW ) ) U N ITED STATE S OF AMERICA

, ) ) Defend ant

. )

)

MEMORANDUM OPINION

T he pl aintiff

s , M on te Silver and his business Monte Silver L td.

, b ring this civil action

pursuant to 26 U.S.C. § 7431 against th e United States of America (t he “ gove rnmen t ” ) , alleging

the unauthorized disclosure of the p laintiffs’ federal tax returns

, in violation of 26 U.S.C § 6103

.

See Complain t ( “ Compl. ” ) ¶ ¶ 1, 36

– 45

, ECF N o. 1

. Currently pending before the Court is the

U nited State s of Ame rica ’ s M otion to Dismiss (“De f.’s Mot.” or the “ government ’ s motion ” )

,

ECF No. 5

. Upon care ful consideration of t he parties’ submi ssions, 1 the Court concludes for th e
following reasons that it m ust grant the government ’ s motion.

I. BACKGROUND

A. Fa ctual Background

The p laintiff

, Mon te Silv er , is a United St ates citiz en who liv es and operates his bu siness

Monte Silver Lt d., which is also a plaintiff in this action, in Israel

. See Compl. ¶ ¶ 2

– 3. This

case concerns actions taken by the gover nment i n two prior cases brought by the plaintiff s and

1 In ad diti on to the filings already iden tifie d, the Court co nsi dered the f ollowing subm is s ion s in rendering it s decision: (1) the P l aintiff s ’ Memorandu m o f Points an d Autho rities in Opposition to Defendant ’ s Motion t o Dis miss (“ Pls .’ Opp ’ n ”) , ECF N o. 6 ; and (2) the United State s of America ’ s Rep ly in S u ppo rt of its Mo tion to Dis miss ( “ Def. ’ s Reply ” ) , ECF No. 7.2

assigned to other mem bers of this C ourt : (1) Silver v. Inter nal Revenue Service , Ci v il Action No.

19

- 247 ( “ Silver I ”)

, and (2) Silver v. Internal Revenue Service

, Civil Action No. 20

- 1544

( “ Silver II ” ) . The Cou rt wi l l discuss each case in tur n.

1. Silv er I

On J anuary 30, 2019, the plaintiffs in the case currently b efo re the C ourt brought suit

against t he Internal Rev enue Service ( “ IRS ” ) and the Department of the Treasury ( “Treas u ry ”) in

Silver I

. See Compl

. ¶ 7. In Sil ver I
, t he pl ainti ff s alleged tha t “ the IR S and [ the ] Treasury

vi olated ” the Administrative Pr ocedure Act, 5 U.S.C. § § 551

– 59 ; the Regulatory Flexibility Act,

5 U.S.C. § § 601

– 12 ; and the Paperwork Reduction Act, 44 U.S.C. § § 3501

– 21

, when they

promulgated “ re gula tions tha t implemented and in terpreted

. . . the Tax Cut and Jobs Act ” (the

“Tax Act ”). Id

. ¶ 8

. Specifically, the pla intiffs c hallenge d regulations implementing the

so

- called “ transition tax

, ” which “impose [d] a one

- time tax on U [nited ] S [tate s ( ‘ U

. S

. ’ ) ]

sha reholders o f certain spe cified fo reign corporations

. . . by deeming those earning s to be

repatriated and in cluded in the U.S. person ’ s income for the 2017 tax year.” Silver I

,

531 F. Supp. 3d 346, 35 1

– 52 (D.D.C. 2021), opinion modified on den ial of recon sideration

,

No. 19

- cv

- 24 7 (APM), 2021 WL 7287301 (D.D. C. Nov. 1, 2021) (in ternal quotation marks

omitted) (footnote omitted) (citing 6 U.S.C. § 965(a) )

.

Prior to the filing of summary judgment motions in Silver I
, the IRS and th e Treasury

“ p rov ided officers a nd employees of the D epartment of Justice [( ‘ DOJ ’ ) ]

. . . c onfidential

documents r elating [to] the [p] laintiff s ’ 20 17 f ede ral tax returns ” (the “ confidential documents ” ).

Compl. ¶ 12. A fter the plaintiffs moved fo r summary judgment on Ma y 1 5, 2020, see i d. ¶ 14,

the IRS and t he Treasu ry filed thei r cross

- motion for summary judgment on Ju ly 20 , 2020

, see

id. ¶ 15, inclu din g the confid e ntial d o cuments as attachments with their c ros s

- motion

, see id.

¶ 16. According to the plaintiffs, in their cross

- mot ion, t he IRS and t he Trea su ry also allegedly3

“made outrageous, false[,] and damaging sta tements [ ] relating to the [c]o nfidential

[d ] ocuments[.] ” I d. ¶ 17. The plaintiffs also cont end ed that, “ a t no time prior to ” either the

disclosure of the confidential documents to the DOJ by the IRS and the Treas ury or the

submission of these documents by the D OJ in Silv er I “did [the government] ever contact [t he

plaintiffs] to discuss th e ” submission of the documents or the issues to which the documents

allegedly pertaine d

. Id. ¶ 19. T he p laintiffs further r epresent that , d espite the s ubmission t o the

Court of the confi dential d ocuments , “ Silv er I had nothing to do with [the p]laintiffs ’ tax

liability[,] but inste ad was a [n]

. . . a dministrative law procedural challenge to [the ]

regulation s [,] ” grounded in the “significant on

- going compliance costs ” that the “new law an d

regulations imposed [ up ] on [the p]lain tiff[s .] ” Id. ¶ 18.

In respon s e to the disclosure of the co n fidential documents in Silver I

, o n J ul y 23, 2020

,

t he plaintiffs sent th e IRS and the Trea sury a letter “ request [ing] that [the plaintiff s ’ ] ta x returns

and related information

. . . be removed in their entir ety ” from the Silver I docket

. Id.

, Exhibit

(“Ex.”) A ( Re: Illegal Disclos ure of T ax Returns u nder 26 U.S. C

. § 61 03 in Silver

, et al. v. IRS,

et al. , No. 1:19

- cv

- 0247 (D.D.C.) ( July 23 , 20 20 ) ) at 4 , ECF No. 1

- 1

. Although t he IRS and the

Tre asury i nitially denied the plaintiff s ’ request to remove the doc uments , they did “ o ffer [ ] to do

so if [the plaintiffs ] wou l d conce de a critical jurisdicti onal fact of the case

, ” i d. ¶ 22 , namely

, that

“ neither [ plain tiff wa] s a ‘ small enti t y[,] ’ ” and that “ Silver will neve r owe a tr ans ition tax[,] ” id

. ,
Ex. A (R E: Si lver v. IRS , 19

- cv

- 247 ( APM ) ( D.D.C.) ( J uly 2 9 , 2 020) ) a t 7 , E CF No. 1

- 1

. The

plai ntiffs pr esu mptively declined this request due to the ir belief that making the concessions

“ would have resulte d in the d ismissal of the [ir] lawsuit. ” Id. ¶ 22.4

“ On August 3, 202 [ 0 ]
, ” 2 id. ¶ 23

, t h e plai ntiffs filed a m ot ion to seal the confid ential

documents

, s ee id.

, and, “ [o]n Februar y 24, 202 1

, ” id. ¶ 24

, the [ ] C ourt provisionally sealed the

[ ] [d] ocuments [ ,] ” id. “ On March, 28, 2021 , the [ ] C ourt denied

. . . [the p]laintiff s ’ mo tion [,] ”

id. ¶ 25, to th e extent that it sought the seal i ng of the document s in their entirety

, see Sil ver I
,

No. 19

- cv

- 247 (APM) , 2021 WL 1177998, at *3 (D.D.C. Mar. 28, 2021), a n d “ order[ed] the

parties to meet a nd confer and file .

. . propo sed redactions to the [documents

, ] ” Co mpl. ¶ 25. In

the event that “ the parties could not reach agreement, ” the C ourt direct ed them to “ file

s upplementary brie fing ” on the issue

. Id. Thereafter

, althou g h “ the part ies discussed the

p o ssi b l e reda ctions, [ ] they were not able to agree and, consequently [,] submitted sup plem ental

briefing. ” I d.

O n March 28, 2021, the C ourt grante d th e IRS ’ s and the Treasury ’ s cross

- motion for

summary judg ment

. See Silver I
, 531 F. Supp. 3d at 366. On May 25, 2021, the plai ntiffs

appealed the Co urt ’ s memora ndum opinion and order granting su mma ry judgment to the I RS

and the Trea sury and the C ourt ’ s partial denial of the plaintiffs’ motion to seal to the District o f

Columbia Circuit

. See Notice of Appeal at 1

, Silver I

, Civil Action No. 19

- 247, ECF No. 78

.

Subse quently, o n December 6, 2022, the C ircuit affirmed the Court ’ s merits ju dgment and

dismissed the appeal of the Court ’ s ruling o n the motion to seal

. See Notice of Supp lemental

A uthority, Ex. A ( Judgment

, Silver, et al . v. Internal Revenue Service, et al.

, No. 21

- 5116

( “ Judgment ” )) at 1

, E CF No. 12

- 1

. With re spect to the dismissal of the Court ’ s ruling on the

mot ion to seal, the Circuit deter mined that it “ la c k[ed] j urisdiction to review ” the C ourt ’ s ruli ng

2 In their Complaint, t he plaintif fs allege that they fil ed their motion to sea l “ [ o ] n August 3, 202 1 [.] ” Compl. ¶ 23

. Howev er, g iven th at the y also assert that the C ourt provisionally sealed the documents “ [o ]n February 24, 2021

, ” id. ¶ 24 , and ruled on their motion “ [o]n March 28, 2021

, ” id. ¶ 25, t he Court w i l l construe the plaintiffs ’ re ference to August 3, 2021, as a typog raphical e rr or and conclude that the p laintiffs intended to refer to the year 2020 , r ather th a n the year 2021.5

that § 6103 does not apply “ because the sealing question [wa] s coll ateral to the merits ” of the

appeal a n d “ the sealing order made no final decision on whether parts of Silver ’ s tax return

should remain confidential[.] ” Id.

, Ex. A ( Judgmen t ) at 3.

2. Silv er I I

On June 12, 20 2 0

, 3 th e plaintiffs filed a second suit ag ainst the IRS and the Treasury

,

al leging viol ati on s of th e Administrative Procedure Act, 5 U.S.C. § § 551

– 5 9 ; the Regulatory

Flexibi l ity Act, 5 U.S.C. § § 601

– 12 ; and the Paperwork Redu ctio n Act, 4 4 U.S.C. § § 3501

– 21

. Compl

. ¶ 26

. In Silver II , the plaintiffs alleged that these violations occurred “ duri ng the

ru le[] making process relating to the global intangible low

- taxed income [ ] provisions of th e [ Tax

Act

. ] ” Id

. Si milarly to Silv er I , the pla i ntiffs conceded that they “owed no taxes either under the

new [ global intangible low

- taxed income] l aw or the regulati ons [ ] issu e[d] interpreting the

law[,]” but they claim ed that “the new law and regula tions ” resulted in “ significant on

- go ing

compli anc e costs [

. ] ” Id . ¶ 27.

On August 24

, 202 0

, 4 the IRS and t he T reasur y filed a motion to di smiss

, which aga i n

included the confidential documents as a ttachments

. See id. ¶ 28. As with Silver I

, the plaintiffs

argu ed that “ th e [c]onfidential [ d]ocuments

. . . had abs olutely nothi ng to do with a ny of the

underlying issues in S ilver II

. ” Id. ¶ 32. “ Prior to fi ling their motion .

. . , counsel for the IRS

a nd [the] Treasur y

. . . asked [the plaint iffs ] if they had redact ions [t hat] t hey wished to in sert in

the [c]onfid ential [d] ocu ments before ” th e documents were filed on the docket. Id. ¶ 29. The

plai ntiffs “ objected to any disclosure of the [c]o nfidential [d] ocumen ts

. ” I d. “ Ho wever, under

3 The Complaint allege s that the plaintiffs commenced Silver II “ [ o ] n June 12 , 202 1 [.] ” Compl. ¶ 2 6 . Howev er, g iven the fact that the Court stayed Silver I I on February 16, 2021

, s ee Silver II , N o. 20

- cv

- 1544 (CKK) , 2021 WL 1 093 395 , at *1 (D. D.C. Feb. 16, 2021 ) , t he Court w i l l construe the plaintiffs ’ re fe rence to June 1 2, 202 1

, as a typog raphical e rror and conclude that the p laintiffs intended to refer to t he year 2020, r ather th a n the year 2021.

4 Ag a i n, because Silver II w as stayed on February 16, 2021

, s ee Silver II
, 2021 WL 1 093 395 , at * 1 , the Court

c oncludes tha t the plaintiffs intended to refer to the year 2020 instead of 2 021.6

protest and solely to avoid much b roader exposure, [th ey] agreed to either ” (1) a “ stipul at [ ion]

that the [c]onfidential [d] ocuments did not state a U

. S

. office in the rel evant box ” or

(2 ) redactions of “ al l material in the for m other than the name of [the p ]laintiffs and the empty

box[

. ] ” I d. ¶ 30

. Thereafter, “ [t]he Silver II defendants su bmitted a reda cted version of portions

of the [c]onfidential [d]ocume nts

. ” I d. ¶ 31. On February 16, 2021, the C ourt stayed Silver II

pe nding the resol ution of the cross

- motions for summary judgment in Silver I

. S ee Silver II
,

N o. 20

- cv

- 154 4 (CKK)

, 2021 WL 1 093 395 , at *1 (D. D.C. Feb. 16, 2021 ) . Subsequently, on

November 7, 2022, the Court granted the IRS ’ s and t he T reasur y ’ s m o tion to dismiss. See

Silver II
, No. 2 0

- cv

- 15 4 4 (CKK ), 2022 WL 16744921, at *1 (D.D.C. Nov. 7, 2022). The Court ’ s

November 7, 2022 decision is currently on appeal to the District of Colu mbia Circuit

. See

Noti ce of Appeal at 1

, Silver II

, Civ il Action No. 2 0

- 1 544, ECF No. 26.

B. P r oc ed ural History of t his Case

On January 4, 2022, the pla intiffs filed their Complaint in this ca s e , “ s eek [ing ] da mages

for [the government ’ s purported ] unauthor ized sharing and disclosur e of [the p] laintiffs’ feder a l

tax retu rns and return information ” in the Silve r I and Silve r II cases

. Compl. ¶ 1. On Fe br uary

8, 2022, t he government filed its mot i on to dismiss this case

. S ee D ef.’s Mot. at 1. On February

22, 202 2, the plai ntiff

s fi led their opposition to the govern ment ’ s motion

, see Pls. ’ Opp ’ n at 1,

and on February 2 8, 2022, the government filed its reply, see Def. ’ s Reply.

II. S TANDARD O F REVIE W

A Rule 12(b)(6) motion tes t s w h e ther a complaint “state [s] a cl aim upon w hich rel ief ca n

b e g r anted [

. ] ” Fe d . R . Civ. P. 12( b)( 6 )

. “To s urv ive a motion to dismiss [under Rule 12(b)(6)], a

complaint must contain sufficient factual m att er, accept ed as tr ue, to ‘state a claim to rel i ef t h at is

plausible on its face.’” Ashcroft v. I qbal , 556 U. S

. 6 6 2, 678 (2009) (qu oting Bell At l. C o rp . v.7

T wom bly , 550 U.S. 544, 570 (2007)) . A claim is facially plausib le “when the plaintiff pleads

fac tua l content that all ows the court to draw [a] re a son a b le inference that the d efendant is liable

for the misco nd u ct a lleged.” Id. (ci ting Twombly

, 55 0 U. S. at 556 ).

In evaluating a motion to dismis s under Rule 12(b)(6), “ the Court mu s t construe the

compl ain t in favor of the plaintiff, who must be grant e d t h e benefit of all inferen ces that can be

der ive d fro m the f

ac t s alleged.” He t tin ga v. United S ta t es , 677 F. 3d 471, 476 (D.C. Cir. 2012)

(in ternal quotation marks omitted ). While th e Court must “assume [th e] veracit y” of an y

“well

- pleaded factual alle g ati o n s ” in a complaint, conc lusory a llegations “ar e not ent i tl ed to the

assump t ion o f truth.” Iqb al

, 5 5 6 U.S. at 679. Thus, “[t]hreadbare rec itals of the elements of a

cau se of action

, supported by mere c onc lusory sta tements, do not suffice.” Id. at 67 8 (c i t ing

Twombly , 550 U.S. a t 555). Also, the Cou rt ne ed n o t “ a c cept legal c o nclusi ons cast as fa ct u al

allegat io ns [
, ] ” or “inferences drawn by [ the] plaintiff if those infere nces are n o t supported by the

f act s set out in the c omplaint [

. ] ” Hettinga , 677 F .3d a t 476. The Court “may consider only the

f act s all ege d i n t he complaint, any do cuments either a t ta ched to or incorporated in the

complaint[,] an d matters of which [the Cour t] may t a k e judicial notice

. ” 5 E qual Emp

. Opportun ity Comm’n v. St. Francis X a vier P arochial Sch. , 117 F.3d 621, 62 4 (D.C. Ci r. 1997)

.

III. A NALYSI S

The government moves to di sm iss the p l a intiff s ’ Complaint , arguing that “ each of th e[]

disclosures ” alleged by the plain t iffs

— ( 1) “ from the IRS to the DOJ

, ” (2) “ from the DOJ to the

C ourt in Silver I

, ” and (3) “ from th e DOJ to the C ourt in Si lve r II ”

— “ w e re autho rized by

exceptions in [ 26 U.S.C. § ] 61 03. ” De f. ’ s Mot. at 5. The pla intiff s cou n t e r that the exceptions

5 Becaus e the Court may “ t ake judicial notice of public records from other proceedings [,] ” He mphill v. Kimberly

Clark Corp. , 605 F. Supp. 2d 183, 186 (D .D.C. 2009 ) (citi ng C ov ad Comms. Co. v. Bell Atl. C orp. , 407 F.3d 122 0

, 1222 (D.C. Cir

. 2005)) , the Cou rt will t ake judicial no ti c e of the p ublic record of the proceedings in both Silver I and Silv er II

.8

cited by the government do not apply and that “ disc losure was [ ] prohibited under the statute

. ”

Pls. ’ Opp ’ n at 3. For the followi ng reason s, the Court concludes that al l th ree d isclosur es were
authorized by § 6103 and , thus, the C o urt must grant the government ’ s motio n

.

Section 6103 of the Internal Rev enue Code states that “ [ tax r] eturns [ 6 ] and [tax] return

informat i on [ 7 ] shall be c onfident i al, ” and t hus , as a general rule, “ no officer o r employee of the

United States

. . . shall di s clo s e any retur n or return information obtaine d by him [or her] in any

manner in connection w ith his [or her] service [.] ” 8 26 U.S.C. § 6103 (a). H ow ever , § 6103 also

p rovides exceptions for when returns and r eturn info rmation may b e disc losed

. See id

.
§ 6103( c )

– ( o)

. R elevant to this c as e,

[a] ret urn or return information may be disclosed in a Federal or Stat e judi cial or administrative proceeding pert aining to tax administration, but only

—
(A) if the taxpayer is a party to the proceeding , o r the proceeding arose out of , or in connection with, determ i ning the taxpayer ’ s civil or criminal

6 Section 6103 d efi nes a “ retur n ” as “ any tax or in for mation return, d ecla ration of esti mated tax, or claim for refund required by, or p rovided for or p ermitted under ” the Intern al Revenue Code. 26 U.S.C. § 6103 (b) (1)

.

7 Section 6103 defines “ re turn in formation ” to mean

a taxpay e r ’ s i dentity, the n atur e, source , or amount of hi s [or her] income , paym ents, receipts, deductions, exemp t ions

, cre dits, assets , liabilities, net wort h, tax liability, tax withheld, deficiencies, overassessment s , or tax payments, whether the taxpayer ’ s return w as, is being, or will b e ex amined or subj ect to other i nvesti gation or processing, or any other data

, re c eived by, recorde d by, prepared by, furn ished to, or collected by the Secretary with respect to a re t urn or wi th respect to the determination of the ex ist e nce, or possible ex iste nce, of liabil ity (or the am ount t hereof ) of any person under this title f or a ny ta x, penalty, interest, fine , forfeit ure, or other imposition, or offense [.]

Id. § 6103(b) (2)

.

8 S ect i on 6103 is enforceable via 26 U. S.C. § 743 1 , which st ates th at :

[i] f any of

ficer or employee of t he United States knowingly, or by rea s on of negligence, inspects

o r discloses any return o r return infor mation with respect to a taxpayer in vi o lation of any
pr ovision of [§] 6103, such t ax payer may bring a c ivil acti on for damages ag ainst th e Unit ed State s in a district court of t h e United S tates.

Id. § 74 31 (a)(1).9 liability, or the collection of such civil liability, in respect of a ny tax im posed under this title;

(B) if the tr eatment of an it em r eflected on such return i s dir ectly related
to t h e re solution of an issue in the proce edi ng;

(C) if such return or ret u rn information directl y relates to a tr ansactional relationship between a per son who i s a party to the proceeding and th e taxpayer wh ich directly affects the resolu t i o n of an issue in th e pr oceeding; or

(D) to the extent requ i red by order of a c ourt pursuant to [18 U.S.C. § 3500] or [R]ule 16 of the Federal Rules of Criminal Procedure , such

co urt being authorized in the issuan ce of such or der to give due consideration to congressional policy f avoring the confidentiality of
ret urns and return information as set forth in this title.

Id. § 6103(h)( 4).

T he government asserts that its d isclosure s to the Court in both Silver I a nd Sil ver II

“ were authorized by [ § 6103] (h)(4), [ 9 ] which gove r ns d isclosure s i n judici al and adm ini strative

9 With respect to the disc losure from the IRS and the Treasury to the DOJ in Silver I

, s ee Compl . ¶ 12 ( “ [A]t some point after the c ommencement of Silver I , the defendants in Silver I provided officers and e mployees of the [ DOJ

— ] in violation of 26 U.S.C. §[ ] 6103 [

— ] confidential doc uments relating [to] the [p]laintiffs ’ 2017 federal tax
returns. ” )

, t

h e government relies on § 6103 (h) (2) as authorization for the disclosure

, s ee Def

. ’ s Mot

. at 5 (a rguing that the disclosure “ from the IRS to the DOJ

. . . was authorized by [§ 6103(h)(2)] , which governs disclosures to the DOJ ” ).

Pur suant to § 6103(h)(2),

[i]n a matter i nvol ving tax administration, a retu rn or return in formation shall be o p e n to ins pection by o r disclos ure to of ficers and employees of the [DOJ]

. . . personally and direc tly engaged in, and solely for their use in, any proceeding before a F ederal grand jury or pr eparation for any proce eding (or inves tigation which may result in such a pro c eeding) bef ore a Federal
gra nd jury or any Federal or State court, but only if

—
(A) the taxpay er i s or may be a party to the proceedin g , or the proceeding aro se out of, or in connection with, determining the taxpayer ’ s civil or criminal liabili ty, or the col l ection of s uch civil liabili ty in respect of any tax imposed under this ti tle;

(B) the t reatment of an item reflected on such return is or ma y be related to t he resolution of an issue in the proceeding or investigation; or

(C) such return or retur n informat ion r elat es or m ay relate to a t r a nsactional relationship between a pe rson who is or may b e a party t o the proceeding and the taxpayer which affects, or may aff

ect, the resol ution of an issue in such procee ding or investi gation.

(continued .

. .)10

t ax proceedings

, ” Def. ’ s Mot. at 5 (citing 26 U.S.C. § 6103(h)( 4 ) )

. In response , the plaintiffs

argue that : (1) § 6103(h) (4) does not apply because “ Sil ve r I and Sil ver II do n ot pertain to tax

administr a tion [,] ” Pl s. ’ Opp ’ n at 3 ; (2) § 6103 (h)(4) “ auth orizes disclosure ‘ only if such purpose

o r activity cannot otherwise pro per ly be accomplished without making such [a ] disclosure[,] ’ ” id.

at 6 ( quoting 26 C.F.R. § 301.6103 (h)(2)

- 1(b)(iii) ) ; and (3 ) even if disclosure to the Cou rt w as

perm itted under § 6103(h)(4)

, “ the filing of [the] tax returns and informat ion on ” the Publi c

Access to Court Electronic Records ( “ PACER ” ) system was no t authori zed, id. at 7. The Court

will begin its ana lysis by a ddressing whether the language of § 6103(h)(4) authorized the

government ’ s disclos u res to the Court in Silver I and Silver II

— including a determination of

w hether the suits “ pert ain [ e d ] to tax administration

, ” 26 U.S.C. § 6103(h)( 4 )

— before turning t o
the plaintiff

s ’ remaining argumen ts

.

A. W hether § 6 1 0 3 ( h ) ( 4 ) A u t h o r i z e d the Di sc losures to the Court in Silver I and Silver II

The government a rgues t hat the DOJ ’ s disclosures to the Co urt in Silver I and Silver II

we re authorized under the exem ption found in § 610 3 (h)(4 ), see Def. ’ s Mot . at 6, which , as

discussed above, pe rmit s the disclosure of tax retu rns or tax informat ion i n a “ ju dicial

. . .

(. . . continued) Id. § 61 0 3(h)(2)

.

In its motion

, the gover nm e nt cont ends t hat § 6103(h)(4) “ is the na rrowe r pr ovision, such that i f disclosure to the [C] ourt i s proper [ under § 6103(h)( 4)] , so too was disclosure to [the ] DOJ [ under § 610 3(h)(2). ] ” Def

. ’ s Mot. at 5 ( internal qu ota tion marks omit ted)

. And, in their opposition, the plaintiffs neither oppose the government ’ s representa tion nor present any argument pertaining speci fically to § 6103(h)(2)

. S e e generally Pls. ’ Op p ’ n. Thus, the plaint iffs have conceded the argument regardin g the disc losure to the DOJ under § 610 3(h)(2 )

. See Toms v. Off. of the Architect of the Capitol , 6 50 F. Supp. 2d 11, 18 (D.D.C. 2009) ( Walton, J.) ( “ [A] court in this D istrict, at least when the pla intiff is represented by counsel, may consider as conced ed any arg uments raised by a defendant’s Rule 12(b)(6) motion that are not addressed in a plaintiff’ s opposition.” ). Furthermore, th e government ’ s characterization
appea r s to be consistent w ith an ag r eement by the parties in Silver I that “ the sta ndards u nder [§ 61 03(h)(4 ) ] are the

narrow er of the two, such that if disclosure to the [C] ourt is proper, s o too was disclosure to [ the ] DOJ

. ” Silver I

, 2021 WL 1177998, at *1 (internal citation omitte d ) . Accordingly, b ecause the Court concludes that disclosure to the C o ur t in Silver I and Silver II was authorized by § 6103(h)(4)

, see infra Section I II, th e C ourt also concl udes that disclosure by the IRS and the Trea sury to the DOJ during Silver I did not violate § 6103(h)( 2).11

proceedi ng per taining to tax administra tion

. . . [ when ]

. . . t he taxpa yer i s

. . . a party to the

proceedin g [
, ] ” 26 U .S.C. § 6103(h)(4 )

. Because the pl aintiffs were parties in both S il ver I and

Silver II

, see Compl. ¶¶ 7, 26, the Court must assess w hether those cases “ pertain[ed] to tax

adm inistration ” within the meaning of § 6103(h)(4). See Def

. ’ s Mot. at 6 ( “ Bec ause there is n o
dispute that [the plain tiffs] were parties to Silver I a nd Sil ver II , their c laims he re turn on whether

those suits are proceedin gs pertaining to tax administratio n

. ” ) ; Pls. ’ Opp ’ n at 3 ( “ [ A] lawsuit

must pert ain to ‘ tax administratio n ’ as a prerequ isite for the applicatio n of § [ ] 610 3 (h)(4 )

. ” )

. The

governme n t argues that “ tax administration ” “ includes much more than the d etermination of

certain taxpayers ’ lia b ilit ie s [, ] ” and includes cases such as S ilver I and Silver II

. Def. ’ s Mot.

at 6

. In response, t he plainti f fs cont end that “ tax administration ” shoul d b e defined more
narrowly and that Silver I a nd Si lver II should be regarded as “ ad mi nistrative challenges [
, ] ”

rat her than cases “ about the deve lopment, administration, and formulation o f fede ral tax policy. ”

Pl. ’ s Opp ’ n at 5

. For the following reasons, t h e Cour t concludes that both Sil ver I and Silver II

pertain ed to tax administration and thus the DOJ ’ s d i scl osu res to the Court were authorized

under § 6103(h)(4).

Section 6103 “ defin e s ‘ tax admin istration ’ fairly broadly, to include [
, ] ” Gardner v

.

United S tates , 213 F.3d 735 , 738 (D.C. Ci r. 2000) :

the administration , management, conduct, direction

, and sup e rvis ion of the execution and applica tion of the internal revenue laws or relat ed statutes (or equivalent laws and statutes of a State) and tax conve nti on s to which the United States is a party, and

[ ] the development and formulation of Federal tax poli c y rel ating to existing or proposed internal revenue laws, related statut es, and t ax conventions[ , as well as th e ]

[ ] assessment , collection, enforcem en t, litigation, publication, and statistical gathering functions under such laws, statutes, or convent i ons.12

26 U.S.C. § 6103(b)(4 )

. Therefore, a case “ pertain[s] to ta x admi nistratio n, ” id. § 6103(h)(4),

provided that the case “ re f erence [ s ] ” o r is “ connect ed

. . . in some way ” to one of the

above

- listed subjects

, Silver I

, 2021 WL 1177998

, at * 2 ( inter n al quot ation marks omitted ). See

Norman E. Duquette, In c. v. Comm ’ r of Internal Reven ue Serv. , 110 F. Sup p. 2d 16 , 20 (D.D.C.

20 00) (adopting the “ ma

jori ty po s ition ” that “ the term ‘ t ax administration ’ should be read

broadly ” ) ; Silver I
, 2021 WL 1177998

, at * 1 ( “ T he [ ] Ci rcuit has ex plained that th e [Inter nal

Revenue Code] defines ‘tax ad ministra tion’ fairly broadly [.] ” ).

A ppl ying the definition of “ tax admin istration” found in § 6103 (b)(4 )

, the Court

concludes , in accordance wit h the C ourt in Silver I

, see 202 1 WL 1177998 , at *2 ( concluding

that “ th [ e ] case ‘ pertain [ed] to ’ the ‘ adminis tration ’ of tax law ” )

, that both Silver I and Silver II

pertain e d to tax administration within the mean ing of § 6103(h)(4)

. In S ilver I , the pla i ntiffs

chal l enge d “ the process b y whic h [th e Trea s ury and the I RS] issued regulation s g overning the

calculatio n , repo rting, and payment of the [ ] t ransitio n ta x[ ,] ” i d

. at *1

. S e e C om pl. ¶ 8

( “ S ilver I concerned three federal administrative procedur al statutes . . . , which the IR S and

Treasury violated when they issued an extensive set of regulations that imple mented and

interpreted the [ ] international [t] ransition [t] ax provision s . . . , enacted as part of the [ Tax

A ct

. ] ” ). As the C ourt in Silv er I concluded, such a challenge “ eas ily satisfies th [e] defini t ion [,] ”

Silver I

, 2021 WL 1177998 , at * 1

, of “ tax a dministration ” in § 6103(b)(4) because it

“ re ference[d] ” or was “ conn ecte d

. . . in some way [,] ” id

. at * 2

, to “ the ad ministrati on []

. . . of

the execution and application of the internal revenue laws [,] ” 26 U.S

. C. § 6103(b)( 4). 10 See

10 The p laintiffs contend that the C ourt shoul d “ look to [the] government’ s own man u als [,] ” Pl s

. ’ Opp ’n at 4

, according to which the ter m “tax administration [,] ” 26 U.S.C. § 6103(b)(4 )

, refe rs “ to a case ‘ i n which a per son’s liability or collection of that liabili ty und er t he internal revenu e laws, re lated statutes, or tax conventions is determined, or any judicia l pr ocee din g arising out o f or in connection w it h a determination. ’ ” Id. ( quoti ng Internal Reve nue Serv., Publication 4639 (Rev. 10

- 2012), D i sclosure & Pri vacy Law Reference Guide 3

- 10 (2012) ( “ Publication 4639 ” ))

. In support of their argument, t he plaintiffs cite Diam o nd v. Unit ed S tat es , 944 F . 2d 431 (8th (continued .

. .)13

Silver I

, 2021 WL 117 7998

, at *2 (noting that “ [o] ne need look no further than the relief [the

p] laintiffs seek

— a stay [of] the enforcemen t of the [r ] egulat ions and the [ T ] ax [ A ct]

itself,

. . . agai nst [the p] laintiffs and ot h er smal l businesses [ ]

— to see that this case ‘ per tains to ’

the ‘ administ ration ’ of tax law ” ( internal quot ation marks and citations omitted) )

. Si mil arly,

S ilv er II w as a n “ adm inistr ative law procedural ch allenge [,] ” Compl. ¶ 2 7, to the IRS ’ s and the

Trea sury ’ s promulgation of tax regulation s “ rel ating t o the gl obal i ntangible low

- taxed income

[ ] provi sion s of the [ Tax Act ,] ” id

. ¶ 26

. S uch a challenge similarly “ r e fer ence [ s ] ” or i s

“ conn ected

. . . in so me way [,] ” Silver I

, 2 021 WL 1177998

, at *2 t o the “ administration . . . of

the execution and applic a tion of the internal revenue laws [,] ” 26 U.S.C. § 6103(b)(4 )

.

Accor di ng ly, b ecause both Silver I and Silver II “ pertain [ ed ] to tax a dministra tion [
, ] ” id.

§ 610 3(h)(4), and beca use the plaintiffs were parties in b oth cases , s e e id.

, the Court concludes

th at the DOJ ’ s disclosure s of the confidentia l documents to the C ourt in th ose cases wer e

per m i ssible under § 6103 (h)(4)

.

(. . . continued) Cir. 19 91) , for the prop osition that

, “ i n § 6103 cases, courts look to [the] govern men t ’s own manuals [ .] ” P ls

. ’ Opp ’ n at 4.

However, t he plaintiff s ’ rel ian ce on Diam ond is misplaced . In addition to the fact that Diamo nd is an Eight h Circuit

case and thus cannot supe rsede in t his District the D.C. Circuit ’ s ruling in G ardner regarding the broad m ea ning o f

“ tax admini stratio n [,] ” see Gard ner , 213 F.3d at 738 ( “ The Internal Revenue Code defines ‘ tax administration ’ fair y broadl y[.] ” )

, D i amond itself does not support the prop osi tion that t he Court should generally loo k to government

m anuals in § 6103 cases

. Ra ther

, the Eight h Circ uit held t h at the manuals c an be us e d to determine whether “ the IRS

. . . inter p reted [ § ] 6103 erron eou s ly but in good faith [,] ” D iamond 944 F . 2d at 4 3 5 , wh ich is pertin ent to

ana lyses under § 7431 regarding whether a disclosure resulted from “ a good fait h, b ut err oneous, interpretation of [§ ] 6103[,] ” 26 U.S.C. § 7431. See id. § 7431(b) (pro viding tha t “ [n] o liability shall arise

. . . wit h respe ct to any inspection or disclosur e ” when the disc losure was the result of “ a good faith, but erroneous, interp reta tio n o f [ § ] 6103

. ” )

. Here, h owever , b ec ause the Court concludes that th e govern ment ’ s interpret ation o f § 6103 was valid and that the disclosure s in th is case were a uth oriz ed the reund er , there is no need to look to the g overn m ent ’ s manu al to det ermine if its in te rpre tation was made in good faith

. Further more , the la n guage of a n IRS manu al cannot

su persede t he statutory language

, see Miller v. Com m ’ r of In t ernal Reven ue , 114 T.C. 184 , 195 (2000) ( “ Administrative guidance contained in IRS p u bli cations i s not b in d ing on the [g] o vern ment, nor can it change the plain me aning o f tax statutes. ” )

, and thus the narrow er in terpretation found in Publication 4639 cannot supplant t he lang uage of § 6103 defining “ tax ad ministration ” more broadl y

. T herefore, the a rg ument adva n ced by t he plaintiffs does not provide sufficien t reason to reject the C ourt ’ s holding in Si lve r I

.14

B. The Plaintiffs ’ Remaining Arguments

The Co urt having concl uded that the disclosures of the con fidential docum ents by the

D OJ in Silver I and Silver II were authorized under § 610 3 (h)(4 ), t he C ou rt will now add ress the

plaintiff s ’ remaining arguments. T he plaintiffs argue that (1) “ [ § ] 6103 (h)(4) authorize s

discl osure ‘ only if such purpose or activit y cannot otherwise properly be accom plis he d with out

making such disclosure ’ ” and the DOJ “ could have accomplished what it thought it needed to

a ccomplish without

. . . disclo s[ing] [ ] [the p ]lai ntiffs ’ tax information [,] ” P ls. ’ Opp ’ n at 6

(quoting 26 C.F.R. § 301.6103(h)(2)

- 1 (b) ) ; a nd (2) even if disclosure to the Court was authorized

under § 6103(h)(4), disc losure to the public via PACER was not authorized

, see id. at 8. The

Court will address each a r g ument in turn.

F irst, the plaintiffs argue that “ [§] 6103(h)(4) auth orizes disc losure only as a last

resort [
, ] ” citing 26 C.F.R. § 301.6103(h) (2)

- 1(b)(iii), and

, here

, “[t ] h e g overnment could have

accomplis he d what it t hought it needed to accom plis h withou t

. . . disclos [ing] [ ] [ the p] laintiffs’

tax i nforma tion [

. ] ” Pls. ’ Opp ’ n at 6 ; see also id

. ( “ Section 6103(h)(4) author izes disclosure ‘ only

if such purpose or act ivit y cannot otherwise properl y be accomplish e d with out making such

disclosure

. ’ ” ( quoting 26 C.F.R. § 301 .6103 (h)(2)

- 1(b)(iii) ) )

. In response, t he government

argu es that t he language quoted by the plaintiffs from 26 C.F.R. § 301.6103(h)(2)

- 1(b)(iii) “ does

no t a pply ” a nd “ provides no b asis for the C o urt to a dd new requirements to [ § ] 61 03(h)(4)

. ”

Def. ’ s Repl y at 3. The Court agree s with the go vernment that 26 C.F.R. § 301.6103 (h)(2)

-
1(b)(iii) does not apply here.

Section 301 .6103(h)(2)

- 1(b) states that

[ r ] eturns and return i nformatio n

. . . inspected by or disclosed to officers and

em p loyees of the [DOJ]

. . . may be disclosed by such officers and employees to other persons

. . . only to the ex te nt nec e ssary in connection with a Fede ral gr a nd jury proceedi n g , or t he proper prep aration for a proceeding (or in connection with15

an investiga tion which may result i n such a procee ding) , described in paragraph (a). [ 11 ] Such disclosures may inc lude, but are not limited to, disclosures

—
(i) To properly accomplish an y p urpose or activity of the nature described in [§] 6103(k)(6) and the regulat i on s thereunder which is e ssential to suc h Feder al grand jury proceeding, or to such proper preparation (or to such investigation);

(ii) To pro perly interview, cons ult, d epose, or interrogate or otherwise obtain relevant information from, the taxpayer to w ho m such return or
return inf ormation re lates (or such taxpayer ’ s legal representati ve) or from any wit ness who may be called to gi ve evidence in the proceeding; or

(iii) To p r op erly conduct negotiations concerning, or obtain authorization for, settlement o r disposition of the pr oceeding, in wh ole or in part, or
st ipulations of fact in connection with the proceeding.

Disclosur e of a return or return information to a person oth e r than the taxpayer to whom such return or return information relates or such t ax payer ’ s legal represent ative to proper ly accomplish any purpose or activity described in this
paragra ph should be made, h owever, only if such purpose or activity cannot other w is e properly be accomplished without making such disclosure.

2 6 C.F.R. § 301.6 10 3( h)(2)

- 1(b) ( emphas e s added).

Thus, a s th e government correctly argues, see Def. ’ s Reply at 3, thi s pro vision appli es to

the “ [d]is clo s ure of returns and return informat i o n

. . . b y officers and employees of the

[DOJ]

. . . to the extent necessary in co nnection with a Federal grand jury proceeding, or the

proper preparation for a proce eding (or in conn ection with an investigation which may result in a

proceeding)

, described in paragraph (a)[,] ” 26 C.F.R

. § 301.6103 (h)(2)

- 1 (b), i.e. , a proceeding

“ be for e a Federal gra nd jury or any Feder al or Stat e cour t , . . . including any such proceeding (or

any such investigation) also involving th e enfor c ement of a relate d Federa l crimin al s ta tute [
, ] ”

id. § 3 01.6 103(h)(2)

- 1( a )

. However, as alleged in the plaintif fs ’ Complaint, the disclos ures by

the DOJ to the Court were made during the proceedings actually be fore the Co urt in both Silver I

11 Paragraph (a) describe s pro ceed in gs “ before a Federal gr a nd jury or any Federal or Stat e cour t, in a matter involving tax administrati on

. . . including any such proceeding (or any such invest i gation) also involving th e enfor c ement of a relat ed Fed era l criminal s tatute [.] ” 26 C.F.R. § 3 01.6 103(h)(2)

- 1( a )

.16

and Silver II

, see Compl. ¶ ¶ 12, 28, not in connection with (1) “ a Federal grand jury

proceeding [,] ” 26 C.F.R. § 301.61 03(h)(2)

- 1( b ) ; (2) “ t he [ ] prep aration f or a proceeding [,] ” id.

,

“ before a Federal grand jury or any Federal or State cou rt[,] ” id. § 301.6103(h)(2)

- 1( a ); or (3)

“ an in v estigation which may re su lt in such a proceeding[,] ” id. § 301.6103(h)(2)

- 1(b).

Therefore, § 301. 6103 (b) (2) does no t apply

, a nd the plaintiffs are incorrect that the D OJ ’ s
disclosure would only be authoriz ed “ as a last resort[.] ” Pls. ’ Opp ’ n at 6

. Second, the plaintif

fs argue that “ [d] isclosure under

. . . § [ ] 6103(h)(4) is per mitted only

to the [C] ourt an d not to a l l man kind [,] ” P l s

. ’ Op p ’ n at 7
, and th us, the DOJ violated § 6103 by

filing the informatio n on PACER

, see id. at 7

– 8

. I n response, t h e government c ounter s that

“ [ n] o thing in [§] 6103 required the United States to seek to file the information un der seal

. ”

D e f

. ’ s Reply at 4. The Court agrees and th erefore conclu des that § 6103 does not preclud e the

filin g of properly disclosed tax returns on P ACER.

Section 6103 (h)( 4) states t ha t “ [a] retu rn or return information may be disclosed in a

Federa l or State judic ial or ad ministrative proceeding [,] ” 26 U.S.C . § 61 03(h)(4), but does not

expressly state that such disclosure s hould not be made in a p u blic filing

, see generally id

. The

plaintiffs do not id entify any provision in § 6 1 0 3 or other authority pr o hibiting t he public fili ng

of documen ts that have been permissibly disclos ed under § 6103(h ) (4)

, s ee generally Pls. ’

Opp ’ n , and the Court has been unable to locate any such prohibi t ion

, see generally 26 U.S.C.

§ 6103

. Moreover, § 6103 (h)(4) states tha t “ [a] return or return information may be disclo se d in

a Federal or State judicial or administrative pr oceed i ng pertaining to tax administration [ ,] ”

subject to the enum erated l imitations

. I d. § 6103(h)(4)

. This provision does not limit the

individuals t o w hom disc los ure is authoriz e d in such proce edings

. S ee genera lly id.

A ccordingly, because disclosu r e under § 6103(h)(4) is authorized “ in a Federal or S t ate judicial17

or admi nistrative proceeding pertaining to tax admin istration[,] ” id.

, the Court concl ude s that

publ ic disclosure in su ch a proceeding occur s under t hat sub section in ac cordance with the

for um ’ s c ustomary rules.

In federal courts, there is a “ strong presumption i n favo r of public access to jud icial

proceedings [, ] ” Johnson v. Greater Se . Cmty. Hosp. Corp

. , 951 F.2d 1268 , 1277 (D.C. Cir.

1991) , which finds its r o ot in “ t his country ’ s comm on law trad i tion of public acces s to records o f

a judicial proceeding [,] ” Unite d States v . Hubbard , 650 F.2d 293

, 314 (D.C. Cir. 19 80)

.

More over, i n thi s C ourt , unles s the re is goo d cause for information to be file d under seal

, “ all

documents to be filed with t he Court must be filed by elect r onic text

- searchable means [. ] ” LCvR

5.4 ( a). Therefore, in Silver I and Si lver II , the DOJ complied with both § 6103(h)(4) and this

C o urt ’ s Local Rules in filing their submissions, including the confidential do cu ments , on

P ACER.

Accordingly, for the above reasons, the Court concludes that the p laintiffs have failed to

state a claim t hat the disclosure of the confidential doc uments in S ilver I and Silver II violated

§ 6103 and

, th us , the Court m ust g rant the gover nment ’ s mot ion.

IV. CONCLUSI ON

F o r the f oregoing reasons, the C ourt c on cludes that it mu st grant the governme nt ’ s

m otion and dismiss the plaintiffs ’ C om p laint

.

SO ORDERE D this 30th day o f January, 20 2 3

. 12

REGGIE B. WALTON United St ates Distric t J u d ge

12 Th e Cou r t will contemporan eously is sue an Order c onsis te nt with thi s Memorand u m O pinio n.