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TIGTA Report: FOIA Procedures Need Improvement

On September 7, 2017, the Treasury Inspector General for Tax Administration (TIGTA) issued a report about the Internal Revenue Service’s (IRS) Freedom of Information Act (FOIA) procedures. After reviewing a statistically valid sample of FOIA requests, TIGTA concluded that the IRS improperly withheld information 14.3 percent of the time—or approximately 1 in 7 FOIA requests.

TIGTA also found that at the end of Fiscal Year 2016, there were 334 backlogged information requests. Below is a chart from the report showing the IRS’s recent history of backlogged FOIA requests.

graph, goal, TIGTA

TIGTA’s findings are consistent with our experiences with FOIA requests. It is not unusual for the IRS to make repeated requests for extensions to respond. We note further that, during an examination, the IRS is statutorily authorized to provide taxpayers access to their administrative file. Indeed, the Internal Revenue Manual confirms this at section 4.2.5.7 (June 15, 2017). Yet the IRS examination team often requires a FOIA request.

Practice Point 1: As a result of the IRS’s FOIA backlog, some taxpayers have resorted to filing lawsuits in federal district court to enforce their FOIA rights. Because the IRS must respond to court deadlines, taxpayers are sometimes able to force a more expedient response and move to the front of the response line.

Practice Point 2: Taxpayers should attempt to tailor their FOIA requests, only requesting the information in which they are interested. In theory, this could make the IRS’s job easier and, in turn, responses more timely.

Practice Point 3: If taxpayers intend to seek information from the government through the FOIA process, they should do so as soon as possible (e.g., at the beginning of the examination process) so that they may get the information in time to be useful.

 

© 2017 McDermott Will & Emery

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About this Author

Todd Welty P.C., McDermott Will Emery, Certified Public Accountant, Tax Controversy Attorney,
Partner

Todd Welty, P.C. is a partner in the law firm of McDermott Will & Emery LLP and is based in the Firm’s Dallas office. Todd is Co-Chair of McDermott’s Tax Controversy Practice.

Todd’s practice is both national and international in scope. Approximately 95 percent of his professional time is spent on tax controversy and litigation. He represents a broad range of clients including Fortune 100 companies, large non-U.S. multinational companies, closely-held businesses, ultra-high-net-worth individuals and tax advisors – whether they be lawyers or...

214 295 8082
Jeffrey M. Glassman, McDermott Will Emery, Tax Controversies Lawyer
Associate

Jeffrey Glassman is an associate in the law firm of McDermott Will & Emery LLP and is based in the Firm's Dallas office.

Jeffrey focuses his practice on defending individuals and businesses in all stages of federal civil and criminal tax controversies, including litigation, U.S. Internal Revenue Service (IRS) examinations, administrative appeals and voluntary disclosures.

Jeffrey was a law clerk to Judge Maurice B. Foley of the U.S. Tax Court.

Experience

  • Representing multinational businesses and individuals in Tax Court, district court and appellate litigation.
  • Representing multinational businesses in IRS examinations of restructuring transactions.
  • Representing multinational businesses in IRS voluntary disclosures relating to withholding and information reporting obligations.
  • Favorably resolved employment tax matters relating to periods when former parent entity was responsible for payroll and tax compliance.
  • Successfully and timely resolved significant corporate employment tax disputes with full interest and penalty abatement.

Community

  • Co-Chair Dallas Chapter, Federal Bar Association, Section on Taxation
  • Member, American Bar Association Tax Section
  • Member, State Bar of Texas Tax Section
  • Participant, State Bar of Texas Tax Section Leadership Academy
  • Member, Dallas Bar Association Tax Section

Admissions

Jeffrey is admitted to practice in the District of Columbia, Texas and before the U.S. Tax Court.

214-295-8089