Opinion
Case No. 01-73161
March 6, 2003
ORDER DENYING PLAINTIFF'S MOTION TO COMPEL
This is a tort action brought by Ronald Prtichett (Pritchett) against the United States of America. Plaintiff alleges that an employee of the Internal Revenue Service (IRS), Earline Vaughn (Vaughn), gained access to his income tax return files and fraudulently increased his reported annual income by $240,000 for the tax years of 1993, 1994, 1995, and 1996. The IRS started collection actions against Pritchett based on the altered income tax returns. Pritchett alleges that the IRS negligently failed to supervise Vaughn, authorized her to fraudulently manipulate his tax returns, and failed to prevent her actions.
Before the Court is Pritchett's motion to compel a response to its requests to produce. The Court held oral argument on January 8, 2003. At that time, the Court ordered the IRS to provide it with the Treasury Department's Office of Inspector General for Tax Administration (TIGTA) file on Vaughn for an in camera review and to produce all other requested documents to Pritchett. Based on the in camera review and for the reasons that follow, Pritchett's motion to compel is DENIED.
The IRS has a pending motion for summary judgment. Pritchett has requested additional time to file an amended response to the motion after he receives the documents at issue here. As his motion to compel is denied, this request is moot. The Court will therefore consider the motion for summary judgment on the papers already filed with the Court.
I. Information Sought
Pritchett sent Defendant a request to produce on August 12, 2002 that included a request for "[a] copy of any and all documents contained in the TIGTA's investigation file relating to Earline Vaughn." Defendant responded as follows:
The United States objects to this request on the grounds that Section 6103 of the Internal Revenue Code ("I.R.C.") and 5 U.S.C. § 552a(b) prohibit the disclosure of the requested documents in connection with the above-captioned proceeding. The file pertains to a TIGTA [Treasury Department's Office of Inspector General for Tax Administration] investigation of possible violations of Title 26 by Earline Vaughn; therefore, it constitutes Ms. Vaughn's tax return information within the meaning of I.R.C. 6103(b)(2), and is protected from disclosure by I.R.C. Section 6103(a). Defendants also object to this request to the extent that it requires the production of documents in violation of Fed.R.Crim.P. 6(e).
Pritchett now moves to compel production of these documents pursuant to Fed.R.Civ.P. 37(a).
II. Analysis
In general tax returns and return information are confidential and may not be disclosed. 26 U.S.C. § 6103 (a). Absent an applicable exception, a court cannot direct the United States to disclose tax return information in violation of the statutory prohibition. See McLarty v. United States, 784 F. Supp. 1401 (D. Minn. 1991) (finding liability for disclosures despite the fact that they were made pursuant to court order).
There are exceptions to this general rule, however. An individual must be allowed to inspect his own returns and return information, § 6103(e)(1)(A)(i). The exceptions only apply, though, "if the Secretary determines that such disclosure would not seriously impair Federal tax administration." § 6103(e)(7).
Defendant argues that it may not disclose the TIGTA "file on Vaughn because it is return information" on Vaughn, not on Pritchett. Pritchett argues that it is his own "return information" since the investigation is based on the falsification of his tax returns. "Return information" includes
any other data, received by, recorded by, prepared by, furnished to, or collected by the Secretary [of the Treasury] with respect to a return or with respect to the determination of the existence, or possible existence of liability (or amount thereof) of any person under this title for any tax, penalty, interest, fine, forfeiture, or other imposition, or offense.
§ 6103(b)(2)(A) (emphasis added). This includes information gathered in a criminal or administrative investigation so long as there is "a nexus between the data or information obtained and the furtherance of obligations controlled by Title 26." See In re Grand Jury Investigation, 688 F.2d 1068, 1070 (6th Cir. 1982) (finding that there was an insufficient nexus between Title 26 and threatening witnesses in violation of Title 18). Vaughn has been charged with the criminal offense of fraudulently altering tax returns pursuant to 26 U.S.C. § 7214 (a)(7). There is a strong nexus between the investigative file and the furtherance of obligations under Title 26, since Vaughn is being prosecuted for a violation of Title 26.
Pritchett argues that under the Freedom of Information Act, however, the TIGTA file should be disclosed. See 5 U.S.C. § 552 (a); see also Rugiero v. United States Department of Justice, 257 F.3d 534 (6th Cir. 2001) ("[The FOIA] exceptions are narrowly construed and the burden is on the agency to justify its action. Therefore, the structure of the Act reflects a general philosophy of full agency disclosure unless information is exempted under clearly delineated statutory language." Internal quotation marks and citations omitted). Tax returns and tax return information protected by 26 U.S.C. § 6103 are exempted from disclosure under the FOIA, however. See 5 U.S.C. § 552 (b)(3);Fruehauf Corp. v. IRS, 566 F.2d 574, 578 (6th Cir. 1977).
Thus, Pritchett's arguments are unavailing; the TIGTA file is confidential and need not be produced.
Defendant lodged with the Court in camera the TIGTA file. The Court has examined it and concluded, after a review with Defendant, that nothing in it is disclosable. The documents lodged with the Court are listed in the cover to Defendants' In Camera Submission. If Plaintiff is of the view that any particular document listed should be disclosed, he may file a motion to that effect.
SO ORDERED.