District court orders IRS to release field service advice memoranda under the FOIA.

• Author: Rood, Joan
• Position: US Freedom of Information Act

The District Court for the District of Columbia recently ordered the IRS to release field service advice memoranda (FSAs) in Tax Analysts v. Internal Revenue Service, 3/15/96. The court held that FSAs must be disclosed under Section 552(a) (2) of the Freedom of Information Act (FOIA), because they are statements of policy and interpretations of law that the Service has adopted. The court also said exemptions under FOIA do not apply to prevent disclosure of FSAs, except to the extent they include return information or work product.

FSAs are prepared by attorneys in the Office of Chief Counsel for use by IRS field attorneys, revenue agents and appeals officers, among others. FSAs discuss significant tax issues in the context of cases of specific taxpayers. One of their stated purposes is to promote uniformity in IRS positions. They are strictly advisory, however, binding neither the taxpayers to whom they pertain nor the Service. The IRS has indicated that nonetheless are "highly regarded" and that the advice they contain is "generally taken."

Tax Analysts, the publisher of Tax Notes and other periodicals, submitted a request in February 1994 for access to all FSAs, which the Service denied. After exhausting all administrative remedies, Tax Analysts filed suit in district court seeking disclosure of FSAs under FOIA Section 552 (a) (2).

FSAs Are Subject to Disclosure Under FOIA Section 552(a)(2)

Tax Analysts argued that FSAs were subject to disclosure under FOIA Section 552(a) (2) as either statements of policy or interpretations of law which the Office of the Chief Counsel has adopted, or as instructions to agency staff. The IRS responded that it had not adopted FSAs because (1) they do not represent formal agency positions; (2) they are only occasionally subjected to high-level review; (3) they do not serve as precedents and are not formally binding; and (4) they are different from those documents the Service was ordered to disclose under the FOIA in Taxation With Representation Fund v. IRS, 646 F2d 666 (D.C. Cir. 1981). Tax Analysts countered that the IRS had adopted FSAs as established policy through which the agency discharged its regulatory duties.

The court found that FSAs qualify as statements of policy and interpretations of law that the Service has adopted, since IRS staff routinely use FSAs as guidance in conducting their audits and as references in their dealings with the public; see Coastal States Gas Corp. v. Department of...