Litigation Considerations, Adequacy of Search: The court holds that "[t]he IRS has submitted 'reasonably detailed, nonconclusory' affidavits that show 'what records were searched, by whom, and through what process.'" "The IRS's declarations indicate how the IRS interpreted Plaintiff's FOIA request and its criteria to determine which documents from the 65 boxes were responsive to Plaintiff's request."
Exemption 3: The court holds that "IRS's motion for summary judgment is granted as to Exemption 3." First, "the Court finds that Plaintiff did not actually request the return information of alter ego entities." Second, the court finds that "[e]ven if Plaintiff had sufficiently stated the scope of its request, 26 U.S.C. § 6103 specifically protects a taxpayer's identity as confidential 'return information.'" "IRS regulations require that requests for another taxpayer's return information, which includes their identity, be accompanied by 'a properly executed power of attorney, Privacy Act consent, or tax information authorization, as appropriate.'" "Plaintiff failed to obtain such consent here, despite its receipt of a tax lien listing nineteen alleged alter egos." Responding to plaintiff's objection, the court finds "[t]hat the IRS named other taxpayers publicly in connection with Plaintiff does not entitle Plaintiff to those taxpayers' undisclosed, non-public documents through the FOIA." The court finds that "[p]laintiff's alter ego argument is also unavailing." "The Internal Revenue Code treats taxpayers as separate entities for tax assessment purposes irrespective of whether they are designated alter egos for collection purposes" "Finally, a rule providing that putative alter egos are entitled to one another's tax return information would, as the IRS argues, yield paradoxical results." "If the IRS discloses another taxpayer's information pursuant to such a rule, only so that the requester can use that information to disprove alter ego status, the disclosure automatically violates § 6103(a) and conflicts with its core purpose of protecting taxpayer privacy."
Exemption 6: "The Court finds the referenced information was properly withheld under Exemption 6, because it consists of personal information of individuals that falls within the ambit of information typically subject to privacy protection, and the privacy interests of the individuals involved outweigh any public interest that might be served by disclosure." "The information being withheld consists of the 'social security numbers of plaintiff's employees, the bank account, credit card, or driver license numbers of any individual taxpayer, the home addresses, telephone numbers, or email addresses of individual taxpayers other than plaintiff, or taxpayer identification numbers, Federal and state of plaintiff or any other third party.'" "The Court also finds that the IRS complied with its duty to reasonably segregate and produce all non-exempt information."
Exemption 7(E): "The Court finds the IRS's evidence sufficient to show that disclosure of the referenced information would disclose techniques and procedures for law enforcement investigations that could reasonably be expected to risk circumvention of the law." The court relates that "the redacted information relates to Plaintiff's 'Risk Score,' 'which is a technique used by the [IRS] to prioritize case assignments given the [IRS's] resource constraints." "The Risk Score is a technique utilized by the [IRS] to ensure the effective enforcement of the nation's tax law, and is a technique unknown to the general public.'" "The Court also finds that the IRS complied with its duty to reasonably segregate and produce all non-exempt information."