Niro v. I.R.S.

364 F.Supp.3d 100

Donato NIRO and Shirely Niro, Plaintiffs,

v.INTERNAL REVENUE SERVICE, Defendant.

CIVIL ACTION NO. 17-40099-TSH

United States District Court, D. Massachusetts.

Filed March 8, 2019

Donato F. Niro, Milford, MA, pro se.

Shirley M. Niro, Milford, MA, pro se.

Anita Johnson, United States Attorney's Office, Boston, MA, Megan Hoffman-Logsdon, United States Department of Justice, Washington, DC, for Defendant.

MEMORANDUM OF DECISION AND ORDER

TIMOTHY S. HILLMAN, UNITED STATES DISTRICT JUDGE

Introduction

Donato Niro ("D. Niro") and Shirley Niro (together with D. Niro, "Plaintiffs" or "Niros") filed a Complaint (Docket No. 1) against the Internal Revenue Service ("IRS") under the Freedom of Information Act, 5 U.S.C. § 552 ("FOIA") seeking disclosure and release of agency records they allege were improperly withheld from then in regards to the audit of their 2010, 2011 and 2013-2015 tax returns.

In support of this request, the Niros assert that beginning in 2013, the IRS began auditing their tax returns, first for the years 2010 and 2011, and thereafter, for the 2013-2015 tax years. The audit of the Niros' tax returns was apparently prompted by their having claimed deductions in the amount of $570,000, which the IRS disallowed. D. Niro a former IRS employee, subsequently wrote the IRS seeking copies of the case files of the Revenue Agent conducting the audits. D. Niro does not feel that the FOIA coordinator complied with his request. More specifically, he asserts that information was wrongfully withheld on the grounds that he was under criminal investigation, which D. Niro alleges was untrue. D. Niro continued to file FOIA requests as he was suspicious of the motivation for the audits. Based on his former employment with the IRS, D. Niro contends that he is aware of what types of case notes and documentation are generally maintained by IRS Revenue Agents and other IRS employees involved in the IRS process. The Plaintiffs further contend that they have requested such case notes and documentation and have not been provided the same.

The Niros assert that they were targeted for audit by the IRS because they were members of, or had contributed to, various conservative organizations that were hostile to the Obama administration. D. Niro also asserts that he was targeted for audit because he was a former IRS whistle blower.

More specifically, D. Niro asserts that when he was working as an IRS Group Manager in the IRS Criminal Investigation Unit, first in Providence, Rhode Island and later in Brockton, Massachusetts, he became aware of and/or reported a number of serious allegations of improprieties involving senior IRS executives.

By their Complaint, the Plaintiffs seek to obtain records requested from the IRS relative to the audit of their tax returns. On July 27, 2018, the IRS filed its Motion for Summary Judgment (Docket No. 24) in which it argued that the undisputed facts establish that: (1) it has performed an adequate search for the records responsive to Plaintiffs' FOIA request; and (2) properly withheld a limited number of pages that are exempt from disclosure. For the reasons set for the below, I find that the IRS has complied with its obligations under the FOIA and therefore, the motion for summary judgment is granted .

Standard of Review

Summary Judgment is appropriate where, "the pleadings, depositions, answers to interrogatories and admissions on file, together with affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law." Carroll v. Xerox Corp. , 294 F.3d 231, 236 (1st Cir. 2002) (citing Fed. R. Civ. P. 56(c) ). " ‘A "genuine" issue is one that could be resolved in favor of either party, and a "material fact" is one that has the potential of affecting the outcome of the case.’ " Sensing v. Outback Steakhouse of Florida, LLC , 575 F.3d 145, 152 (1st Cir. 2009) (quoting Calero-Cerezo v. U.S. Dep't. of Justice , 355 F.3d 6, 19 (1st Cir. 2004) ).

When considering a motion for summary judgment, the Court construes the record in the light most favorable to the nonmoving party and makes all reasonable inferences in favor thereof. Sensing, 575 F.3d at 153. The moving party bears the burden to demonstrate the absence of a genuine issue of material fact within the record. Id., at 152. " ‘Once the moving party has pointed to the absence of adequate evidence supporting the nonmoving party's case, the nonmoving party must come forward with facts that show a genuine issue for trial.’ " Id. (citation to quoted case omitted).

" ‘[T]he nonmoving party "may not rest upon mere allegations or denials of the [movant's] pleading, but must set forth specific facts showing that there is a genuine issue of material fact as to each issue upon which [s/he] would bear the ultimate burden of proof at trial." Id. (citation to quoted case omitted). The nonmoving party cannot rely on "conclusory allegations" or "improbable inferences". Id. (citation to quoted case omitted). " ‘The test is whether, as to each essential element, there is "sufficient evidence favoring the nonmoving party for a jury to return a verdict for that party." ’ " Id. (citation to quoted case omitted).

"In the FOIA context, a district court reviewing a motion for summary judgment conducts a de novo review of the record, and the responding federal agency bears the burden of proving that it has complied with its obligations under the FOIA. Because the court must analyze all underlying facts and inferences in the light most favorable to the FOIA requester, summary judgment for an agency is only appropriate after the agency proves that it has ‘fully discharged its [FOIA] obligations.’ " Neuman v. United States, 70 F.Supp.3d 416, 421–22 (D.D.C. 2014) (internal citations and citation to quoted case omitted); see also Carpenter v. U.S. Dep't of Justice , 470 F.3d 434, 438 (1st Cir. 2006) ( "The government bears the burden of proving that withheld materials fall within one of the statutory exemptions, and district courts are required to make de novo determinations as to the validity of the asserted exemptions."(internal citation omitted) ).

Facts ¹

Procedural History

By letter dated January 23, 2017, the Plaintiffs submitted a FOIA request to the IRS seeking four categories of documents: (1) All records relating to the examination of their 2013 and 2014 taxes; (2) certain specific records relating to the examination of their 2010 and 2011 taxes; (3) records related to the purported denial of their appeal rights; and (4) records related to the purported dissemination of their tax information to other government agencies. On or about January 27, 2017, Kimberly Wilson ("Wilson"), a Disclosure Specialist for the IRS in the Government Liaison, Disclosure & Safeguards, Disclosure Field West Area, Disclosure Office in Oakland, California ("Disclosure Office"), was assigned to handle Plaintiffs' request. Wilson has held this position since June 15, 1997.

As part of her official duties, Wilson processes and coordinates searches for documents responsive to FOIA requests. Because the Plaintiffs' request was seeking information regarding an examination of a taxpayer, Wilson began her search by using the IRS's Integrated Data Retrieval System ("IDRS"), which is a system that consists of computer databases and programs that support IRS employees working active tax cases within each business function across the entire organization. This system manages data that has been retrieved from the Master File, allowing IRS employees to take specific actions on taxpayer accounts, track status, and post transaction updates to the Master File. The Master File System is the IRS's nation-wide electronic system containing taxpayer account information. The Non-Master File System is designed to electronically store temporary taxpayer information. When temporary taxpayer information is complete, it is transferred to the Master File System.

Wilson began her search for potentially responsive records by searching IDRS using the following Command Codes in conjunction with the Social Security Numbers ("SSNs") provided by Plaintiffs in the FOIA request: INOLET (displays name line and address information for all accounts with the same taxpayer information number ("TIN") ), IMFOLI (to retrieve an index of all the tax modules of the input SSNs), SUMRY (requests a summary of all Taxpayer Information File ("TIF") modules available for a particular TIN), AMDIS (displays a summary of the Audit Information Management System File), AMDISA (displays up to six screens of information about the taxpayer's account for a specific tax period), and IMFOL with definers I, S and T. The IMFOL command displays read-only access to the Individual Master File.

Wilson also searched the Disclosure Office's shared drive for responsive records. Wilson determined that IDRS showed no open or closed Appeal actions for tax years 2010, 2011, 2013, or 2014, but that the account was in open examination for tax years 2013 and 2014, and that there were closed examination files for 2010 and 2011. Wilson requested the files responsive to Plaintiffs' request through the examination group with responsibility for the Plaintiffs' examinations. Those files consisted of 722 pages that Wilson determined to be responsive to Plaintiffs' request. Wilson did not find any records responsive to Plaintiffs' request for specific documents relating to their 2010 and 2011 examinations; nor did she find any records responsive to the Plaintiffs' request for specific documents related to the alleged appeals they made for any of the tax years at issue, or any records relating to the Plaintiffs' request for records related to what, if any, government agencies their tax information had been disseminated to.

During the course of her review of these documents, Wilson determined that 713 pages could be released to the Plaintiffs in full. The IRS initially withheld nine pages in full. Afte...