There is a wealth of information available from the IRS that is not generally made available to the public. Most of this information can be obtained by asking. This information includes files the IRS assembles about a taxpayer, and various training manuals used by the IRS to train its employees. In addition to training given to its employees, the IRS, like most professional organizations, conducts continuing education on an annual basis for its various divisions. Most of the training manuals and annual training materials are available to the practitioner pursuant to the Freedom of Information Act (FOIA).
The materials used by the IRS for continuing education will give the practitioner current material that will indicate where the IRS is focusing its resources and what the IRS considers to be the “hot issues.” Continuing education materials generally give information about specific techniques to be used by IRS employees and will tell the practitioner how IRS employees are trained.
Freedom of Information Act & Privacy Act
Information that is not voluntarily disclosed by the IRS can be obtained pursuant to the Freedom of Information Act (FOIA). This Act applies to all federal agencies including the IRS. A taxpayer can request the disclosure of a wide variety of IRS records including records containing information collected or prepared by the IRS, legal analyses and decisions of the IRS, and procedural and operational rules of the IRS. However, Section 6103 of the Internal Revenue Code prohibits the IRS from releasing tax returns and tax return information, and limits what can be obtained under FOIA.
The Freedom of Information Act requires disclosure of three major categories of information:
- Information required to be published in the Federal Register. With respect to the IRS, this would be procedural and substantive regulations.
- Information to be made available for public inspection and copying or, in the alternative, to be published and offered for sale. This category includes revenue rulings, revenue procedures, notices, announcements, new releases, the Internal Revenue Manual, general counsel memoranda, actions on decisions and technical memoranda. These items are routinely made available by the IRS through the Internal Revenue Bulletins, or in the IRS reading rooms.
- Information required to be made available to any member of the public upon specific request. This category consists of information collection by the IRS during audits and collection activities.
The Privacy Act of 1974 provides a method for a taxpayer to obtain information about the taxpayer’s own records.
There are certain exemptions from disclosure under FOIA. Generally, these are law enforcement investigatory records and records exempt from disclosure by some other statute. Tax returns and return information are exempt from disclosure under FOIA if they do not relate to the taxpayer making the request.
Considerations for Practitioners
When representing a taxpayer, the practitioner should always consider what information the IRS might have that would benefit the taxpayer. This may be information about the taxpayer, or manuals and continuing educational material that has not been made public.
In situations where the practitioner believes that there is information in the possession of the IRS that would be helpful to the taxpayer, the practitioner should ask for the information.
For example, suppose the taxpayer is under a criminal tax investigation and the practitioner believes that the issues being investigated by the Criminal Division are new and maybe “hot issues”. The practitioner should request training material of the Criminal division that has been published in the last couple of years. This information may help the practitioner in the investigation. The request should be sent to the IRS, asking for all continuing education material used by the IRS both nationally and in the local area where the taxpayer resides. A separate request should be made to the local district seeking information in the files of the IRS about the taxpayer. Since the IRS will charge for a search and copies, the practitioner should place a dollar limit on what will be paid for the material. If the material exceeds the dollar limit, the IRS will contact the practitioner to see if the practitioner desires to incur the additional costs.
The FOIA and Privacy Act are separate and distinct acts, but there is some interplay between both. As a practical matter when a request is made for information within the files of the IRS, it should be made under both FOIA and the Privacy Act.
Always be prepared when dealing with the IRS. Always ask for information.
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