Table of Contents

Date01 September 2005
Published date01 September 2005
The U.S. Court of Appeals for the District of Columbia Circuit has held that
the IRS and a public charity are not required to disclose the contents of a closing
agreement between them that concerns allegations that the charity violated the tax
law applicable to it by allegedly supporting the presidential candidacy of the char-
ity’s founder (Tax Analysts v. IRS and Christian Broadcasting Network, Inc.).
Summary of the Facts
Tax Analysts (TA) sued the IRS and the Christian Broadcasting Network (CBN)
under the Freedom of Information Act (FOIA) and the Internal Revenue Code (IRC)
to obtain a copy of a CBN-IRS closing agreement. The closing agreement was
reached in the same time period during which CBN secured tax-exempt status on
a going-forward basis.
CBN gained recognition of tax-exempt status as a religious and charitable
organization in 1961. In 1985, CBN allegedly engaged in political campaign activ-
ities in support of its founder and presidential candidate. The IRS commenced an
audit; CBN regained recognition of exemption in 1988, retroactive to 1987.
Thereafter, CBN issued a press release announcing that it had entered into an
agreement with the IRS to conclude the audit and regain its exempt status.
TA sent a FOIA request to the IRS seeking a copy of the closing agreement and
related documents. The IRS declined to disclose any of the requested information
(except for the application for recognition of exemption and the determination
letter), citing a FOIA exception and IRC § 6103. TA likewise refused to provide the
documents. This litigation ensued.
The district court dismissed TA’s complaint. It did not examine any of the
documents in question. This court concluded from the pleadings that the prin-
cipal document being requested was a closing agreement and therefore was a
tax return exempt from disclosure under IRC § 6103 and FOIA. The court also
concluded that IRC § 6104 does not provide a private right of action and dis-
missed the claim against CBN. This court of appeals affirmed the dismissal of
the claim against CBN and remanded the balance of the case, holding that IRC
§ 6103 does not exclude all closing agreements (and their precursor docu-
ments) but only excludes those agreements that are not “any papers submit-
ted” or “any letter or document issued” subject to public disclosure under IRC
§ 6104(a)(1)(A).
On remand, the IRS filed a motion for summary judgment, accompanied by
a statement of material facts with attached declarations. The declarations related
to 32 boxes and a file cabinet of materials. The IRS declarants stated that docu-
Analysis of current developments in tax
and related law for nonprofit organiza-
tions and their professional advisors.
Volume 22 Number 9
September 2005
Court Finds Gifts of
Conservation Easements
Deductible 3
Physician Network Fails
to Qualify as Exempt
Business League 4
IRS Applies Joint Venture
Rules to Business League 5
Final Regulations Issued
Concerning Allocation of
Charitable Deductions for
Purposes of Foreign Tax Credit 6
Charitable Giving Increased
in 2004 6
Other Developments 6
Bruce R. Hopkins’
© 2005 Wiley Periodicals, Inc.
Published online in Wiley InterScience

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