Recent Decision in FOIA Case Provides OPR with the Opportunity to Highlight an Important Process Change

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Issue Number:  2018-04

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Recent Decision in FOIA Case Provides OPR with the Opportunity to Highlight an Important Process Change

A recent U.S. District Court decision in a Freedom of Information Act (FOIA) case upheld the IRS’s withholding of certain information related to Circular 230 allegations about a practitioner that were received in the Office of Professional Responsibility (OPR) from another part of the IRS.  Because the allegations concerned representation of a taxpayer before the IRS, information in the OPR’s case file was subject to section 6103. The OPR has authority under section 6103 to disclose tax information to a practitioner during an open investigation of a possible Circular 230 violation or during a disciplinary proceeding, but could not comply with this practitioner’s request for information because by then the case was closed. The OPR has modified its process to give the practitioner in cases like this an opportunity to seek information before it closes the case, providing an affected practitioner a fuller opportunity to understand and respond if the practitioner chooses to do so.

The District Court decision involved access under the FOIA to agency records related to a report the OPR received about possible practitioner misconduct.  After reviewing the matter, the OPR sent the practitioner a “soft letter” that generally described the allegations and informed the practitioner that the OPR had decided not to take action on the matter.  The “soft letter” advising the practitioner of the matter also advised him that the OPR investigation was closed.  The practitioner sought further information about the allegations from the OPR, but the OPR was required to deny the request because its disclosure authority under section 6103 is limited to disclosures related to open investigations.  The practitioner then submitted his FOIA request, and took the matter to U.S. District Court when the IRS continued to deny specific information regarding the allegations.

When the OPR issued the “soft” closing letter, the OPR did not foresee the subsequent events, in particular, a request for information that it could not act on because of the closed status of the case.  In hindsight, the OPR found this result inconsistent with its commitment to provide practitioners a full and fair opportunity to respond to allegations, and in 2016 modified its processes to address the problem.  OPR now sends a letter to the practitioner advising of the issues presented in the matter under investigation and gives the practitioner an opportunity to comment, and, then, when it’s an appropriate disposition of the case, sends a second letter with the “soft” closing language.  This two-letter process gives a practitioner who wants to know more about the allegation(s) an opportunity to make a request before the OPR closes the matter, thus fitting within the framework of the 6103 provision.  The revised “soft letter” process follows longstanding communication processes used by the OPR in investigations that could result in action under Circular 230, such as a reprimand, censure, suspension or disbarment.

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