Public.Resource.org v. United States Internal Revenue Service
MOTION to Dismiss filed by United States Internal Revenue Service. Motion Hearing set for 10/9/2013 02:00 PM in Courtroom 2, 17th Floor, San Francisco before Hon. William H. Orrick. Responses due by 9/17/2013. Replies due by 9/24/2013. (Attachments: # 1 Proposed Order)(Sanders, Christopher) (Filed on 9/3/2013)
IN THE UNITED STATES DISTRICT COURT FOR THE
NORTHERN DISTRICT OF CALIFORNIA
UNITED STATES INTERNAL
Civil Action No. 3:13-cv-2789
Hearing Noticed for October 9, 2013
at 2:00 pm before Judge Orrick in
Courtroom 2, 17th Floor
UNITED STATES INTERNAL REVENUE SERVICE’S MOTION TO DISMISS
Notice is hereby given that the United States Internal Revenue Service’s Motion to
Dismiss is scheduled for hearing on October 9, 2013, at 2:00 pm before the Honorable William
H. Orrick in Courtroom 2, 17th Floor, of the Phillip Burton Federal Building and United States
Courthouse, 450 Golden Gate Avenue, San Francisco, CA 94102.
Defendant the United States Internal Revenue Service hereby moves the Court to dismiss
this action pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure. The documents the
plaintiff has requested fall within the scope of 26 U.S.C. § 6104, which provides a
comprehensive scheme, distinct from the FOIA, for releasing the documents in question.
Because there is a specific statutory scheme addressing the documents in question, the more
general FOIA does not apply, and the plaintiff’s case should be dismissed.
Issue to be Decided
Whether 26 U.S.C. § 6104 supersedes the FOIA with respect to the disclosure of
documents which fall within the scope of Section 6104.
The Service moves the Court to dismiss this case pursuant to Fed. R. Civ. P. 12(b)(6).
This case involves plaintiff’s request for federal records, specifically, information returns--Forms
990--submitted to the Service by certain tax exempt organizations, and its demand that the
information be produced in a specific electronic format. In response to this request, the Service
did not deny plaintiff the information. Rather, the Service could not produce the documents in
the specific electronic format without violating the Internal Revenue Code (Title 26) provisions
prohibiting disclosure of certain return information. The plaintiff responded by filing the instant
suit, alleging violations of the Freedom of Information Act (FOIA) and the APA. However, 26
U.S.C. § 6104 specifically provides for the manner in which Forms 990 should be disclosed.
Given the existence of a specific statutory governing the production of Forms 990, the FOIA
does not apply, and the plaintiff’s claim should be dismissed. Furthermore, Section 6104 does
not require the production of documents in a specific format, and thus the plaintiff’s demands
that the documents be produced in a specific format should also be rejected.
In addition, to the Service’s procedural arguments, there are additional defenses which
the Service will rely upon should this matter proceed beyond this Motion to Dismiss. As the
Service noted in its response to the plaintiff dated May 1, 2013, attached to the complaint as
Exhibit I, the documents the plaintiff seeks contain information that, by law, must be redacted,
and the Service lacks the technical capabilities necessary to produce the redacted documents in
the requested format. Should this litigation proceed beyond the Motion to Dismiss stage, the
Service will address the technical problems precluding production in the requested format in
On or around March 11, 2013, plaintiff made a request under the FOIA for the production
of the Form 990s filed by nine tax-exempt charitable organizations in a specific electronic
format. See Exhibit F to the Complaint. On or around March 19, 2013, the Service responded,
advising plaintiff that there is a specific non-FOIA procedure in place for the production of
Forms 990 and that it would need to comply with that procedure in order to obtain the requested
documents. See Exhibit G to the Complaint. On or around April 12, 2013, the plaintiff
responded to the Service, advising that it sought production in a specific electronic format and
that the procedure referenced in the Service’s March 19 letter would likely not result in the
production of documents in the requested format. See Exhibit H to the Complaint. On or around
May 1, 2013, the Service again responded, reiterating that there is a specific non-FOIA
procedure in place for the disclosure of the requested Forms 990. The May 1 letter also indicated
that the requested documents contained donor information which would need to be redacted and
that, because of technical limitations, the Service was unable to produce the redacted documents
in the requested format. See Exhibit I to the Complaint. The instant suit eventually followed.
A motion to dismiss for failure to state a claim under Fed.R.Civ.P. 12(b)(6) is properly
granted when it appears beyond a doubt that plaintiff can prove no set of facts in support of their
claim that would entitle Plaintiffs to relief. Hishon v. King & Spaulding, 467 U.S. 69, 73 (1984).
In reviewing a Rule 12(b)(6) motion, courts must accept a complaint’s factual allegations as true,
but those allegations must plausibly suggest “the pleader is entitled to relief.” Harris v. Rand,
682 F.3d 846, 850 (9th Cir. Cal. 2012). Conclusory statements of law need not be accepted as
true. Id; see also Northern Highlands I, II, LLC v. Comerica Bank, 328 Fed. Appx. 358, 360
(9th Cir. 2009) (“We assume the truth of well-pleaded factual allegations in the complaint, Bell
Atl. Corp. v. Twombly, 550 U.S. 544, 127 S. Ct. 1955, 1965, 167 L. Ed. 2d 929 (2007), but need
not assume the truth of opinions, factual and legal conclusions, or arguments, Anderson v. Clow,
89 F.3d 1399, 1403 (9th Cir. 1996).”).
Controlling Statutory Scheme for the Production of Forms 990
Section 6104, the statute applicable to plaintiff’s request, is a part of a comprehensive nondisclosure paradigm anchored by Section 6103 of the Internal Revenue Code. Section 6103(a)
requires that the Service keep all return information confidential, unless another provision within
Title 26, the Internal Revenue Code, allows its disclosure.1 The Code contains provisions
authorizing the Service to disclose certain return information-“except as authorized by this title-“
in certain circumstances. These provisions are the exceptions to the broad non-disclosure
mandate in section 6103(a). Section 6104(a) is one of those exceptions thereby allowing
disclosure of some information; 6104(b), however, is an exception to that disclosure resulting in
prohibition of disclosure of some discreet return information.
Section 6104 includes a number of detailed provisions governing the disclosure of
information relating to certain tax exempt organizations, including requiring the Service to make
available applications for the determination of tax exempt status. And, it establishes certain
exemptions to disclosure, including language which precludes disclosing the identities of donors,
and related information. See, generally, 26 U.S.C. § 6104. In addition, and of most importance
Section 6103(a) prohibits the Service, indeed any government official or employee, from disclosing a person’s
return or return information to third parties. Section 6103(a) states: “Returns and return information shall be
confidential, and except as authorized by this title ... no officer or employee of the United States.... shall disclose
any return or return information obtained by him in any manner in connection with his service...” 26 U.S.C. §
to this litigation, Section 6104 expressly requires that exempt organization returns be made
available by the IRS at times and locations prescribed by the Secretary Id. at (b).
In furtherance of Section 6104’s Congressional mandate to make the specified information
publicly available, the Service has implemented specific regulations detailing the manner in
which such documents may be viewed or copies obtained. 26 C.F.R. § 301.6104(b)-1(d). In
recognition of this scheme for the production of documents pursuant to Section 6104, the
Service’s FOIA regulations provide that FOIA requests which relate to documents, the
production of which are governed by other established procedures (including Section 6104), will
be processed in accordance with those other procedures. 26 C.F.R. § 601.702(d)(3). Thus, it is
clear from Section 6104, its associated regulations, and the Service’s FOIA regulations, there is a
specific statutory and regulatory framework for the production of Forms 990. It is that
framework which controls the production of documents pursuant to Section 6104, and it is that
framework, not the FOIA, which controls in this litigation.
In this case the plaintiff seeks the production of the Forms 990 of certain tax exempt
organizations in a specific electronic format. Forms 990 are the information tax returns filed by
organizations exempt from taxation under 26 U.S.C. §§ 501(c), 501(d), or 527. As tax returns,
the Forms 990 would normally be confidential and exempt from production to third parties under
26 U.S.C. § 6103, but Congress has specifically provided for their production through a separate
statute, 26 U.S.C. § 6104, subject to the non-disclosure mandates in sections 6103 and 6104(b).
Section 6104 Supersedes the FOIA with Respect to Forms 990
In this case, the Court is confronted with two separate statutes which govern the disclosure of
documents by the government, Section 6104 and the FOIA. However, Section 6104 specifically
addresses the disclosure of the documents in question, Forms 990, while FOIA provides
generally for the production of documents by the government. It is a well settled rule of
statutory construction that a precisely drawn, detailed statute preempts more general statutory
remedies. Brown v. General Services Administration, 425 U.S. 820, 834-35 (1976).
Courts have addressed this same issue while examining a different portion of the Internal
Revenue Code, 26 U.S.C. § 6110. Section 6110 provides for the production of written
determinations by the Service. In analyzing Section 6110, courts have held that:
Section 6110 of the Internal Revenue Code provides generally that “except as
otherwise provided in this section, the text of any written determination and any
background file document relating to such written determination shall be open to
public inspection at such place as the Secretary may by regulations prescribe.”
I.R.C. § 6110(a) (West Supp. 1999). Section 6110 establishes a comprehensive
scheme for resolution of disputes relating to disclosure of such documents. See
I.R.C. § 6110(f) (West Supp. 1999). This scheme is the exclusive remedy for
persons aggrieved by the IRS's compliance with section 6110's mandate. See
I.R.C. § 6110(m) (West Supp. 1999) (formerly § 6110(l) (West 1989)); see also
Church of Scientology of Calif. v. Internal Revenue Svc., 253 U.S. App. D.C. 78,
792 F.2d 146, 149 (D.C. Cir. 1986) (noting that § 6110 supplants FOIA for
documents covered by that section); Conway v. United States Internal Revenue
Svc., 447 F. Supp. 1128, 1131 (D.D.C. 1978) (finding that the legislative history
of § 6110 demonstrates that Congress intended for it to replace FOIA).
Tax Analysts v. IRS, Case No. 96-2285, 2000 U.S. Dist. LEXIS 5066, 2-3 (D.D.C. Mar. 31,
2000). See also Long v. United States Internal Revenue Serv., 742 F.2d 1173, 1178 (9th Cir.
1984) (“Congress, wishing to exclude section 6110 from FOIA, specifically made known its
intention by providing that section 6110 was to be the exclusive remedy where disclosure of
written determinations were sought and that the rules and procedures of FOIA would not apply.
26 U.S.C. § 6110(1) (1982)”); see also Ricchio v. Kline, 773 F.2d 1389, 1395 (D.D.C. 1985)
(analyzing whether the production of certain documents was covered by FOIA or the Presidential
Recordings and Materials Preservation Act, and holding that “because the Materials Act governs
the disclosure of the transcripts, [plaintiff] cannot obtain disclosure under the Information Act.”).
Section 6110 differs from Section 6104 in that Section 6110 was enacted in 1976, after
the implementation of the FOIA, while Section 6104, which was renumbered to its current
position in the code in 1954, predates the FOIA, which took effect in 1967. In order for a statute
passed after the FOIA to supersede the FOIA, the subsequent statute must so specifically
provide. Church of Scientology of Calif. v. Internal Revenue Serv., 792 F.2d 146, 149 (D.C. Cir.
1986). Because Section 6104 predates the FOIA, it is not required to include specific language
as to its effect on the FOIA, and the Court must instead turn to traditional rules of statutory
As cited above, it is a well settled rule of statutory construction that a precisely drawn,
detailed statute preempts more general statutory remedies. Brown v. General Services
Administration, 425 U.S. 820, 834-35 (1976); see also Donaldson v. United States, 653 F.2d 414,
418 (9th Cir. Cal. 1981) (“where there is no clear legislative intent to the contrary, a specific
statute will not be controlled by a general statute, irrespective of priority of enactment.”) In this
case, while the FOIA provides general guidance as to the production of documents, Section 6104
specifically addresses the documents in question and specifically provides for their production.
When Congress enacted the FOIA, it could have amended Section 6104 to indicate that the FOIA
would provide the scheme for the production of Forms 990, but it declined to do so.
Both the FOIA and Section 6104 provide for production of Forms 990, it is merely the
procedural aspect of the two statutes that conflict. In light of that conflict, it is the more specific
procedures of Section 6104 and its implementing regulations which control. To argue otherwise
would require the Court to ignore the portions of Section 6104 which govern the disclosure of
Forms 990. “It is a cardinal principal of statutory construction that a statute ought, upon the
whole, to be so construed that, if it can be prevented, no clause, sentence, or word shall be
superfluous or void or insignificant.” TRW Inc. v. Andrews, 534 U.S. 19, 31 (2001).
The Court should also keep in mind that in the absence of Section 6104, Forms 990, as
tax returns, would be exempt from disclosure pursuant to Section 6103. Furthermore, Section
6104 specifically charges the Service with establishing regulations governing the inspection of
documents. It is clear that Congress intended to allow the Service to establish the procedure
governing the production of documents under Section 6104. Had Congress intended to change
that delegation of authority, it could have specifically done so when it enacted the FOIA, but it
declined to do so. In the absence such an act by Congress, the Court should instead look to the
more specific statute, Section 6104. Accordingly, it is Section 6104, not FOIA, which controls
the production of the documents at issue in this case. Given that Section 6104 does not require
the production of documents in any specific format, and given that the FOIA does not apply, the
plaintiff’s claims should be dismissed.
Such a ruling would, by necessity, also resolve the Plaintiff’s APA claim, which asks that
the Court find that the Service’s position that the documents in question are governed by Section
6104, not the FOIA, is arbitrary and capricious. A finding by the Court that Section 6104 does
control would necessarily mean that the Service’s position was not arbitrary and capricious, and
thus the APA claim should be dismissed as well.
It is the specific statutory and regulatory scheme established Section 6104 for the
production of Forms 990 which controls in this matter, not the general scheme for the production
of documents provided for by the FOIA. Accordingly, the plaintiff’s claims should be
Dated: September 3, 2013.
United States Attorney
Assistant Attorney General, Tax Division
/s/ Christopher W. Sanders
CHRISTOPHER W. SANDERS
Trial Attorneys, Tax Division
U.S. Department of Justice
Post Office Box 227
Ben Franklin Station
Washington, D.C. 20044
Phone: (202) 616-1840/Fax: (202) 514-6866
CERTIFICATE OF SERVICE
IT IS HEREBY CERTIFIED that service of the foregoing MOTION TO
DISMISS has been made on September 3, 2013, via the Court’s CM/ECF system to the
Counsel for Plaintiff
Thomas R. Burke
Davis Wright Tremaine LLP
505 Montgomery Street, Suite 800
San Francisco, CA 94111
/s/ Christopher W. Sanders
CHRISTOPHER W. SANDERS
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