POWELL v. INTERNAL REVENUE SERVICE et al

Filing 85

MEMORANDUM OPINION re 84 Order on Motion for Summary Judgment. Signed by Judge James E. Boasberg on 09/06/2019. (lcjeb2)

UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLUMBIA

WILLIAM E. POWELL,
Plaintiff,
v.

Civil Action No. 17-278 (JEB)

INTERNAL REVENUE SERVICE,
Defendant.

MEMORANDUM OPINION
Pro se Plaintiff William E. Powell’s long pursuit of tax information about his family,
their trusts and estates, and their printing business has spurred him to bring at least six suits
against Defendant Internal Revenue Service — three in the Eastern District of Michigan and
three here. In the instant case, Plaintiff alleges that the IRS’s response, or lack thereof, to several
records requests constitutes a violation of the Privacy Act and the Freedom of Information Act.
Only three claims remain after the Court’s first summary-judgment Opinion, and the
Government now moves for judgment on them. The Court accedes and will grant the Motion.
I.

Background
The full history of this case is laid out in the Court’s prior Opinion. See Powell v. IRS,

317 F. Supp. 3d 266, 270–71 (D.D.C. 2018). As relevant here, Plaintiff’s First Amended,
Second Amended, and Supplemental Complaints alleged Privacy Act and FOIA violations
relating to his requests for tax records pertaining to himself (William E. Powell), his father
(William A. Powell), his grandfather (Andrew Powell), the family’s printing company under two
names (recently, the Powell Printing Company; formerly, the Andrew Powell Printing

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Company), his father’s estate, his father’s trust, and his grandfather’s trust. Id. at 273–74 (listing
requests in each Complaint by taxpayer).
On July 5, 2018, this Court granted the IRS summary judgment as to all but two matters.
First, it found that Plaintiff had sufficiently pleaded a request for the Powell Printing Company’s
1989 tax records. Id. at 275. The second claim to survive was Powell’s allegation that the IRS
had not adequately searched for the original of his father’s Form 706, which he seeks as a way of
locating Plaintiff’s own K-1 information, which may have been attached to the Form 706. Id. at
280–81. Upon Plaintiff’s Motion for Reconsideration, the Court ordered that Powell was also
entitled to receive the tax records he had requested for Andrew Powell as an individual, since he
had “sufficiently established he is next of kin to his grandfather.” ECF No. 63 (Order Granting
in Part and Denying in Part Plaintiff’s Motion for Reconsideration) at 2.
The IRS has now filed a Second Motion for Summary Judgment, asserting first that
Powell is barred by claim preclusion as to the 1989 Powell Printing Company tax records and,
second, that it has adequately searched for both the William A. Powell Estate’s Form 706 and the
requested individual tax records of Plaintiff’s grandfather, Andrew Powell.
II.

Legal Standard
Summary judgment may be granted if “the movant shows that there is no genuine dispute

as to any material fact and the movant is entitled to judgment as a matter of law.” Fed. R. Civ. P.
56(a). A genuine issue of material fact is one that would change the outcome of the litigation.
See Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986) (“Only disputes over facts that
might affect the outcome of the suit under the governing law will properly preclude the entry of
summary judgment.”). In the event of conflicting evidence on a material issue, the Court is to
construe the conflicting evidence in the light most favorable to the non-moving party. See

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Sample v. Bureau of Prisons, 466 F.3d 1086, 1087 (D.C. Cir. 2006). Factual assertions in the
moving party’s affidavits or declarations may be accepted as true unless the opposing party
submits his own affidavits, declarations, or documentary evidence to the contrary. Neal v. Kelly,
963 F.2d 453, 456–57 (D.C. Cir. 1992).
“FOIA cases typically and appropriately are decided on motions for summary judgment.”
Defenders of Wildlife v. U.S. Border Patrol, 623 F. Supp. 2d 83, 87 (D.D.C. 2009); see Bigwood
v. U.S. Agency for Int’l Dev., 484 F. Supp. 2d 68, 73 (D.D.C. 2007). In FOIA cases, the agency
bears the ultimate burden of proof to demonstrate the adequacy of its search and that it properly
withheld any documents. See Defenders of Wildlife, 623 F. Supp. 2d at 88, 91. The Court may
grant summary judgment based solely on information provided in an agency’s affidavits or
declarations when they “describe the documents and the justifications for nondisclosure with
reasonably specific detail, demonstrate that the information withheld logically falls within the
claimed exemption, and are not controverted by either contrary evidence in the record nor by
evidence of agency bad faith.” Military Audit Project v. Casey, 656 F.2d 724, 738 (D.C. Cir.
1981). Such affidavits or declarations are “accorded a presumption of good faith, which cannot
be rebutted by ‘purely speculative claims about the existence and discoverability of other
documents.’” SafeCard Servs., Inc. v. SEC, 926 F.2d 1197, 1200 (D.C. Cir. 1991) (quoting
Ground Saucer Watch, Inc. v. CIA, 692 F.2d 770, 771 (D.C. Cir. 1981)).
III.

Analysis
As there are three separate sets of records at issue here, the Court looks at each in turn.
A. Powell Printing Company 1989 Return
The first surviving claim is one under the Privacy Act for the 1989 corporate tax return of

the Powell Printing Company. See Powell, 317 F. Supp. 3d at 275. Defendant now argues, as it

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did in its Answer, that this claim is barred by the doctrine of claim preclusion, its having been
adjudicated by the U.S. District Court for the Eastern District of Michigan in Powell v. IRS, No.
14-12626, 2015 WL 5271943 (E.D. Mich. Sept. 9, 2015).
“A subsequent lawsuit is barred by claim preclusion ‘if there has been prior litigation
(1) involving the same claims or cause of action, (2) between the same parties or their privies,
and (3) there has been a final, valid judgment on the merits, (4) by a court of competent
jurisdiction.’” Nat. Res. Def. Council v. EPA, 513 F.3d 257, 260 (D.C. Cir. 2008) (quoting
Smalls v. United States, 471 F.3d 186, 192 (D.C. Cir. 2006)). As to the first element, “[w]hether
two cases implicate the same cause of action turns on whether they share the same ‘nucleus of
facts.’” Drake v. FAA, 291 F.3d 59, 66 (D.C. Cir. 2002) (quoting Page v. United States, 729
F.2d 818, 820 (D.C. Cir. 1984)). Plaintiff appears to contest only the fourth element of this test,
arguing that the court in the prior case lacked jurisdiction and venue.
The court in the Michigan case held its order for summary judgment in abeyance pending
the Government’s making three further showings, one of which related to its “search for the 1989
Corporate Tax Return for the Powell Printing Company.” Powell, 2015 WL 5271943, at *2. In
response, the IRS submitted a supplemental declaration by disclosure specialist Lisa M. Soli
detailing its 2015 search for the 1989 return, which declaration Defendant has also appended to
its Reply in the present case. See ECF No. 81, Exh. A. The district court in that case found that
the IRS had provided evidence of a “good faith search” demonstrating that it “d[id] not possess
[the] requested document.” Powell, 2015 WL 5271943, at *2.
The elements of claim preclusion are thus easily met here. First, the two cases
unquestionably concern the same “nucleus of facts,” Drake, 291 F.3d at 66 (quoting Page, 729
F.2d at 820), because both address Plaintiff’s request for the Powell Printing Company’s 1989

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corporate tax return. Second, the parties are the same — namely, William E. Powell and the
Internal Revenue Service. Third, the Michigan court considered Powell’s claim for the 1989
return on the merits, dismissing the case with prejudice after finding that the Government had
conducted an adequate search. The only question as to that judgment’s validity would arise if
the Michigan court had somehow lacked subject-matter jurisdiction over that claim. See, e.g.,
Bell Helicopter Textron, Inc. v. Islamic Republic of Iran, 734 F.3d 1175, 1180–81 (D.C. Cir.
2013) (“[J]udgments in excess of subject-matter jurisdiction ‘are not voidable, but simply
void.’”) (quoting Elliott v. Peirsol’s Lessee, 26 U.S. (1 Pet.) 328, 340 (1828)). But, of course,
any FOIA claim would give that court federal-question jurisdiction. As the prior decision thus
meets all four elements of claim preclusion, the Court will grant Defendant’s Motion for
Summary Judgment as to the 1989 return.
B. William E. Powell K-1 Information and William A. Powell Estate Form 706
The next allegation to survive the prior summary-judgment decision is Powell’s
contention that, as a means of trying to find his individual K-1 information, the IRS should have
searched for his father’s estate’s original Form 706, which may have had attached to it his own
K-1 information. Form K-1 is used to report taxable events from entities including trusts and
estates.
“An agency fulfills its obligations under FOIA if it can demonstrate beyond material
doubt that its search was ‘reasonably calculated to uncover all relevant documents.’” ValenciaLucena v. U.S. Coast Guard, 180 F.3d 321, 325 (D.C. Cir. 1999) (quoting Truitt v. Dep’t of
State, 897 F.2d 540, 542 (D.C. Cir. 1990)); see also Steinberg v. Dep’t of Justice, 23 F.3d 548,
551 (D.C. Cir. 1994). “[T]he issue to be resolved is not whether there might exist any other
documents possibly responsive to the request, but rather whether the search for those documents

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was adequate.” Weisberg v. Dep’t of Justice, 745 F.2d 1476, 1485 (D.C. Cir. 1984). The
adequacy of an agency’s search for documents requested under FOIA “is judged by a standard of
reasonableness and depends, not surprisingly, upon the facts of each case.” Id. To meet its
burden, the agency may submit affidavits or declarations that explain the scope and method of its
search “in reasonable detail.” Perry v. Block, 684 F.2d 121, 127 (D.C. Cir. 1982). The affidavits
or declarations should “set[] forth the search terms and the type of search performed, and aver[]
that all files likely to contain responsive materials (if such records exist) were searched.”
Oglesby v. U.S. Dep’t of Army, 920 F.2d 57, 68 (D.C. Cir. 1990). Absent contrary evidence,
such affidavits or declarations are sufficient to show that an agency complied with FOIA. See
Perry, 684 F.2d at 127. “If, however, the record leaves substantial doubt as to the sufficiency of
the search, summary judgment for the agency is not proper.” Truitt, 897 F.2d at 542.
In its first motion for summary judgment, the IRS established that the system in which it
stores K-1 information, the Information Data Retrieval System (IDRS), would have purged the
requested records by the time Powell had requested them. See Powell, 317 F. Supp. 3d at 280.
The IRS also attempted to obtain Plaintiff’s personal tax return, to which his K-1 information
may have been attached, but that, too, would have already been destroyed for all requested years
pursuant to the IRS’s retention policy. Id. Finally, the Service looked to see if Powell had filed
a Form 1041, which would also have had K-1 information attached to it, but, although the system
showed a single Form 1041 had been filed in 1996, that form also would have been destroyed by
the time of the request. Id.
The Opinion, however, discussed one remaining means of finding the K-1 information,
which the Service did not yet sufficiently explain in its earlier motion. Form 706, a one-time
submission by the executor to determine the contents of an estate, may have attached to it

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Plaintiff’s K-1 information for that estate, in this case for the William A. Powell Estate. The
Court found insufficient both the IRS’s “cursory” statement that it had been unable to locate the
Form 706 in an earlier court proceeding in Michigan and its proffer of a copy of Form 706,
which would not have the attachments its original did. Id. at 280–81. Form 706 is retained by
the IRS for 75 years, moreover, so there was no contention that it was destroyed prior to
Plaintiff’s request. Id.
In its Second Motion for Summary Judgment, Defendant now describes in great detail the
process by which it searched for the Form 706 in 2015 pursuant to an Order issued by the U.S.
District Court for the Eastern District of Michigan in Powell v. IRS, No. 14-12626, 2015 WL
4617182 (E.D. Mich. July 31, 2015). It supports these statements with the Declaration of Joy E.
Gerdy Zogby, an attorney in the IRS Office of Chief Counsel in the Office of the Associate Chief
Counsel, who oversaw that search in 2015 and again in 2019. See ECF 78 (Def. Second MSJ),
Exh. 4, ¶¶ 1, 7, 10–11. Based on this affidavit, the Service asserts that it has shown the adequacy
of its search for the Form 706 associated with the William A. Powell Estate. The Court agrees,
finding that the IRS’s updated explanation shows that its search for the Form 706 was adequate
and thus that summary judgment should be granted as to this claim.
More specifically, Gerdy Zogby states that, in 2015, the IRS found a Document Locator
Number (DLN) for a tax return that appeared to be the William A. Powell Estate Form 706. Id.,
¶¶ 14–17. Consistent with Internal Revenue Manual § 3.5.61.16.2, which states that a “Special
Search” should be performed for FOIA requests, id., it then sent a records request for that DLN
to a Special Search Unit (SSU) in Cincinnati, which subsequently requested the Form 706 from
the Federal Records Center (FRC). Id., ¶¶ 17–19. The FRC did not find the Form in the
expected location but identified another possible DLN, which was listed as being checked out to

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Estate and Gift Team 101, located in Covington, Kentucky. Id., ¶¶ 20–21. Gerdy Zogby’s
subsequent conversations with that team and with the other teams suggested by Team 101 did
not turn up the Form. Id., ¶¶ 22–25. In response to the current lawsuit, Gerdy Zogby called the
Special Search Unit in 2019 to again inquire as to the Form 706. Id., ¶ 32. A different team at
the SSU suggested another possible DLN, a subsequent search for which only repeated the same
fruitless referral to Estate and Gift Team 101. Id., ¶¶ 35–37. Gerdy Zogby thus now avers that
she “do[es] not know where else to look for the original Form 706.” Id., ¶ 38.
In response, Plaintiff argues that Defendant did not address a specific DLN number with
respect to the search for Form 706. He further notes that Defendant refunded his request fees
without explanation of why it had not processed the requests. He also complains that the IRS
should have filed an affidavit from the FRC with more detailed information about their receipt
and later loan of the Form. Finally, Plaintiff contends that Defendant should have used various
other systems to search for the Form, including the Archives and Records Centers Information
System (ARCIS) and the Automatic Processing (ADP) System. In reply, Defendant notes that
ARCIS is a National Archives record system rather than an IRS system.
The Court is now satisfied that the Service’s search for the requested K-1 information,
including its search for the William A. Powell Estate Form 706, was “reasonably calculated to
uncover all responsive documents.” Truitt, 897 F.2d at 542. Rather than its former bare
assertion that it had searched for the Form 706 in a prior proceeding, the Service has now
demonstrated in great detail the steps it took to attempt to locate this record. Powell’s argument
that it should have used alternative systems, including one belonging to the National Archives,
does not defeat the adequacy of the Government’s search. Powell has offered no contrary
evidence to cast doubt on the Government’s declarations, and his statement that the IRS did not

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mention a specific DLN in its briefing does not establish that its search was not reasonably
calculated to produce responsive documents, especially since Defendant has stated that the DLN
Powell provided in his request was not the correct one. See Gerdy Zogby Decl., ¶¶ 32–34.
The Court thus finds that Defendant has met its burden on the issue of Plaintiff’s K-1
information, including the Form 706 for the William A. Powell Estate.
C. Andrew Powell Records
Plaintiff appears to concede the Government’s arguments as to the individual tax records
of Andrew Powell, making no mention of them in his Opposition. The Court finds, moreover,
that the IRS has now shown, through its submission of the declaration of IRS Government
Information Specialist Delphine Thomas, see ECF 78 (Def. Second MSJ), Exh. 5, that it
performed searches reasonably calculated to locate responsive documents for each of the four
requests as to Andrew Powell. The Court analyzes the four in turn.
Address Changes
As relevant here, Powell requested all address changes for his grandfather, Andrew
Powell, between 1985 and 2017. In response, the IRS used IDRS, which Thomas states is used
by “[d]isclosure employees like [her] . . . to search for records in response to FOIA requests like
Mr. Powell’s.” Id., ¶ 6. To search for an address change, which would “appear on an
individual’s Master File under [transaction code] 014,” Thomas entered Andrew Powell’s
taxpayer identification number (in this case, his social security number) “into IDRS to search for
address updates in the various IDRS modules and accounts.” Id., ¶ 8. She states that she
searched IDRS for Andrew Powell’s address changes using this method and “did not locate any
responsive records.” Id., ¶ 9. She further avers that “there is no other IRS system in which the
address changes requested by Mr. Powell are likely to be located.” Id.

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The Court finds that the Service’s described search was reasonably tailored to produce all
address changes for Andrew Powell. The IRS appears to have used all appropriate methods for
locating address changes, which is the determinative factor when considering the adequacy of a
FOIA search, notwithstanding the fact that no records were recovered. See Iturralde v.
Comptroller of Currency, 315 F.3d 311, 315 (D.C. Cir. 2003).
Foreign Information System Transcripts
Powell also requested Foreign Information System (FIS) transcripts for Andrew Powell
between 1987 and 1996. As noted in the first summary-judgment Opinion in this case, the FIS
was a computer system containing data from filings by foreign-owned corporations. See Powell,
317 F. Supp. 3d at 279; Thomas Decl., ¶¶ 11–12. It was replaced by an electronic filing system
in 2007, and the FIS has since been shut down. See Thomas Decl., ¶ 13. Thomas states that she
has “been unable to locate anyone at the IRS who knows any way to revive the now-defunct
[FIS] in order to retrieve the requested transcripts.” Id., ¶ 14. In addition, she notes that the FIS
was used to track forms related to corporations, not individuals, and thus it is unlikely that FIS
records for Andrew Powell ever existed in the first place. Id., ¶ 11 n.1.
The Court accords to the Service a good-faith presumption as to its statements that the
FIS records are now inaccessible and thus finds that it has discharged its duty under FOIA as to
the request for Andrew Powell FIS records.
Non-Master File Transcripts
Powell also requested Non-Master File (NMF) Transcripts for Andrew Powell between
1985 to 2017. While a taxpayer’s Master File holds all major categories of taxpayer data, see
Internal Revenue Manual § 21.2.1.2, some taxpayers may also have an NMF, which contains
records of “certain types of tax assessments that cannot be implemented by Master File

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processing.” Id. § 21.2.1.5(1); see also Thomas Decl., ¶ 17 (“Most taxpayers do not have NMF
transcripts associated with their accounts . . . .”). The IRS houses NMF files in the Automated
Non-Master File (ANMF) System, a search of which can determine whether an NMF file exists
for a given taxpayer. See Internal Revenue Manual § 21.7.12.2; Thomas Decl., ¶¶ 18–19.
Thomas states that “there is no other system [than the ANMF] in which the NMF transcripts
requested by Mr. Powell are likely to be located.” Thomas Decl., ¶ 22. The Service performed a
search in the ANMF system using Andrew Powell’s taxpayer identification number (his social
security number) and received no results, thus indicating that there is no NMF file relating to
him. Id., ¶¶ 20–22. This is sufficient.
SUMRY and TXMOD Transcripts
Last, Powell requested SUMRY records for Andrew Powell between 1995 and 2017 and
TXMOD records for him between 1985 and 2017. Both SUMRY and TXMOD are command
codes used in IDRS. Id., ¶¶ 24, 28. According to Thomas, entering the code “SUMRY” into
IDRS “retrieves a summary of all active modules available on a particular taxpayer’s account,”
id., ¶ 24, and entering the code “TXMOD” into IDRS “retrieves a display of tax information for
a specific Master File module for a specific period.” Id., ¶ 28. Both codes “reflect[] recent
changes to accounts,” id., ¶¶ 24, 28, and therefore are unlikely to produce results for older or
inactive cases. Id. Thomas performed both a SUMRY and a TXMOD search in IDRS for
Andrew Powell on July 1, 2019, and neither yielded responsive records. Id. In both cases,
Thomas states that there are no other IRS systems where the “records requested by Mr. Powell
are likely to be located.” Id., ¶¶ 26, 30.
The Court thus finds that both of these searches were reasonably calculated to produce
responsive records and that the IRS has discharged its burden on these records as well.

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IV.

Conclusion
For the reasons stated above, the Court will grant Defendant’s Second Motion for

Summary Judgment, thus terminating this case. A separate Order consistent with this Opinion
will be issued this day.
/s/ James E. Boasberg
JAMES E. BOASBERG
United States District Judge
Date: September 6, 2019

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