The full FOIA: Freedom of Information Act request can help CPAs secure info related to tax case.

Following an unagreed resolution of a federal or California tax examination, practitioners may want to consider submission of a Freedom of Information Act (FOIA) request. With increased tax enforcement efforts, a FOIA request may hit the informational jackpot in terms of learning why a government examiner didn't rule in your client's favor.

The request can be in the form of a letter that, under the Freedom of Information Act, 5 U.S.C. Sec. 552, and the regulations promulgated thereunder, asks for each document (exclusive of the filed income tax returns) contained in government administrative files relating to the tax liabilities of a practitioner's client for the tax years at issue.

WHAT TO ASK FOR

1. The government's working administrative file(s) created during the audit. This includes worksheets, workpapers, notes, e-mails, documents, memoranda, computations and other materials prepared or accumulated by government employees for the exam.

This also includes internal documents; memoranda; memoranda of all interviews of persons regarding the individual income tax liabilities of the taxpayer; copies of all statements (sworn or otherwise) given by individuals in connection with the investigation of the individual income tax liabilities of the taxpayer; Case Activity record; written reports and recommendations concerning the proposed assessment of additional tax and penalties; and any other information related to the determinations by the government.

All of the above may be collectively called the "Administrative File."

2. All information and documents maintained electronically identifying each requested document by subject matter and format (such as tape, disk, etc.) that are not in the Administrative File.

3. All files relative to the audit that include information and documents obtained pursuant to summonses issued to third parties which are not included in the Administrative File.

4. All information relative to the audit that may have been prepared by consultants, independent or otherwise, and any other specialists assigned to the case which are not included in the Administrative File.

5. A listing of each government employee and representative who participated in any manner in the audit.

Other considerations include stating in the request that the information being sought is not exempt under disclosure laws, is not a classified document, is not a protected internal communication, is not protected by "privacy" and is not a "protected investigative record" within the meaning of the FOIA.

Further, practitioners should request that if any material is deemed to be exempt, they want a statement of the portion deleted or withheld, a statement of the reasons for the refusal and access, and specific citations or statutory authority for the denial.

THE VAUGHN INDEX

In the event the government disclosure officer determines an exemption applies to some or all of the requested information, consider having the FOIA request include a request that a Privilege Log be provided in the form of a Vaughn Index.

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In Vaughn v. Rosen [484 F.2d 820 (D.C. Cir. 1973), cert. denied, 415 U.S. 977 (1974)], the court rejected an agency's conclusory affidavit stating that requested FOIA documents were subject to exemption, saying "A Vaughn Index must: (1) identify each document withheld; (2) state the statutory exemption claimed; and (3) explain how disclosure would damage the interests protected by the claimed exemption."

In Citizens Commission on Human Rights v. FDA [45 F.3d 1325, 1326 n.1 (9th Cir. 1995)], the court said a Vaughn Index "permit[s] the court system effectively and efficiently to evaluate the factual nature of disputed information."

And in John Doe Agency v. John Doe Corp., 493 U.S. 146, 149 n.2 (1989) (quoting Vaughn, 484 F.2d at 826), the court said that with a Vaughn Index, practitioners will have the means to adequately assess information if any claimed exemptions have merit, thereby avoiding potentially costly litigation to seek such information.

Finally, request prompt notice of the location of such information if the government asserts it is not in the possession of it. To expedite the request, offer to discuss instances of deletion or other exemption claims in advance of a final decision.

IRS FOIA Requests (www.irs.gov/foia/index.html)

For Northern California taxpayers: IRS Disclosure Office 14, Suite 840S; Attn: Public Liaison: Wes Pohl; 1301 Clay St., Oakland, CA 94612

Phone: [phone]

For Southern California taxpayers: IRS Disclosure Office 13, MS 2201; Attn: Public Liaison Gary Prutsman; 24000 Avila Road; Laguna Niguel, CA 92677

Phone: [phone]

California FOIA Requests

Requests should be made pursuant to the California Public Records Act, Government Code Sec. 6250, et seq., and the Freedom of Information Act, 5 U.S.C. Sec. 552, and the regulations promulgated thereunder. Requests may be submitted to: Franchise Tax Board; Disclosure Section MS A181; P.O. Box 1468; Sacramento, CA 95812-1468

BY CHARLES P. RETTIG, ESQ.

Charles P. Rettig, Esq. is a principal at the law firm Hochman, Salkin, Rettig, Toscher & Perez, PC in Beverly Hills. You can reach him at [e-mail].