United States Court of Appeals, District of Columbia Circuit
September 13, 2018
from the United States District Court for the District of
Columbia (No. 1:17-cv-00670)
Davisson argued the cause for the appellant. Marc Rotenberg
and Alan Butler were with him on brief.
Michael Murray, Attorney, United States Department of
Justice, argued the cause for the appellee. Gilbert S.
Rothenberg, Thomas J. Clark, and Geoffrey J. Klimas,
Attorneys, were on brief. Richard Caldarone, Attorney,
entered an appearance.
Before: Henderson and Millett, Circuit Judges, and Edwards,
Senior Circuit Judge.
LECRAFT HENDERSON, CIRCUIT JUDGE
Internal Revenue Service (IRS) collects more than money. It
acquires and maintains a reservoir of sensitive information
about taxpayers. And time was, the President could-for any
reason or no reason at all-order the IRS to make that
sensitive information public. The arrangement worked out fine
for decades. Then the Nixon administration compiled a list of
political enemies and ordered the IRS to harass them. The
resulting scandal prompted the Congress to enact sweeping
legislation to protect taxpayer privacy. The Internal Revenue
Code (IRC) now mandates that tax "[r]eturns and return
information shall be confidential" unless they fall
within one of the statute's narrowly drawn exceptions.
I.R.C. § 6103(a).
first blush, the IRC stands in tension with the Freedom of
Information Act (FOIA), which vests the public with a broad
right to access government records. 5 U.S.C. §
552(a)(3)(A). One statute demands openness; the other
privacy. But as we explain infra, the statutes work
well together. Not all records are subject to FOIA requests.
An agency need not disclose records "specifically
exempted from disclosure by statute." Id.
§ 552(b)(3). Because the IRC is such a statute, records
that fall within its confidentiality mandate are exempt from
case presents the question whether a member of the
public-here, a nonprofit organization-can use a FOIA request
to obtain an unrelated individual's tax records without
his consent. With certain limited exceptions-all inapplicable
here-the answer is no. No one can demand to inspect
another's tax records. And the IRC's confidentiality
protections extend to the ordinary taxpayer and the President
alike. Accordingly, we affirm the dismissal of the Electronic
Privacy Information Center (EPIC)'s lawsuit seeking
President Donald J. Trump's income tax records.
a nonprofit organization dedicated to focusing "public
attention on emerging privacy and civil liberties
issues." A few months after the 2016 election, EPIC sent
the IRS a FOIA request seeking President "Donald J.
Trump's individual income tax returns for tax years 2010
forward, and any other indications of financial relations
with the Russian government or Russian businesses." The
IRS declined to comply with the request for two reasons.
First, the requested "documents, to the extent that any
exist,  consist of, or contain the tax returns or return
information of a third party," which "may not be
disclosed unless specifically authorized by law."
Second, the IRS's rules require that a request for a
third party's tax returns include his consent.
See 26 C.F.R. § 601.702(c)(5)(iii)(C); see
also I.R.C. § 6103(c). In fact, the IRS does not
process a FOIA request that violates its rules. Id.
§ 601.702(c)(4). Because EPIC failed to obtain President
Trump's consent, the IRS did not process the request.
then sent the IRS a second letter appealing the initial
denial and renewing its request for President Trump's
above-described tax information. The renewed request invoked
26 U.S.C. § 6103(k)(3),  which establishes an exception to
the general rule that tax returns and return information are
confidential. Under section 6103(k)(3), the IRS may
"disclose" return information to correct a
misstatement of fact, if doing so is necessary to serve a tax
administration purpose. See I.R.C. §
6103(k)(3). Before releasing records under section
6103(k)(3), however, the IRS is statutorily required to
obtain approval from the Joint Committee on Taxation-
composed of members of the Senate Finance Committee and the
House Ways and Means Committee. See id. §
8002(a). EPIC asserted that President Trump made
misstatements of fact about his tax information and about his
audit history. In EPIC's view, releasing the
President's tax returns would promote public confidence
in the IRS.
the IRS declined to process the request, explaining that
section 6103 prohibits the release of the requested records
"unless disclosure is authorized by Title 26." The
second IRS letter stated that section 6103(k)(3) "does
not afford any rights to requesters under the FOIA to the
disclosure of tax returns or return information of third
parties." The letter concluded by telling EPIC "any
future requests regarding this subject matter will not be
soon sued the IRS. Its complaint advanced three claims under
FOIA, 5 U.S.C. § 552, and two under the Administrative
Procedure Act (APA), 5 U.S.C. § 706. The FOIA claims
fault the IRS for failing to meet statutory deadlines for
processing record requests (count one), failing to segregate
nonexempt information (count two) and wrongfully withholding
the President's tax returns and information (count
three). The APA claims assert that the IRS wrongfully
withheld the President's tax returns (count four) and
failed to seek the Joint Committee's approval (count
five). The IRS moved to dismiss the complaint and the
district court granted the motion. It dismissed the FOIA
claims for failure to exhaust administrative remedies and the
APA claims for failure to state a claim upon which relief can
review the district court's dismissal de novo
and may affirm its judgment on any basis supported by the
record. Citizens for Responsibility & Ethics in
Washington v. Office of Admin., 566 F.3d 219, 221 (D.C.
Cir. 2009); Parsi v. Daioleslam, 778 F.3d 116, 126
(D.C. Cir. 2015).
requires federal agencies to make "records promptly
available" when a requester files a "request for
records which (i) reasonably describes such records and (ii)
is made in accordance with published rules." 5 U.S.C.
§ 552(a)(3)(A). But an agency need not produce records
that "fall within one of nine exemptions."
Milner v. Dep't of Navy, 562 U.S. 562, 565
(2011). A FOIA request often seeks a mixture of exempt and
non-exempt records. For such a request, an agency must
segregate the non-exempt information from the exempt
information, disclosing the former but not the latter. 5
U.S.C. § 552(b) ("Any reasonably segregable portion
of a record shall be provided to any person requesting such
record after deletion of the portions which are exempt under
this subsection"). To withhold records, then, the agency
must establish that an exemption applies and, for mixed
requests, must still disclose "all reasonably
segregable, nonexempt portions of the requested
record(s)." Assassination Archives & Research
Ctr. v. CIA, 334 F.3d 55, 57-58 (D.C. Cir. 2003).
invokes exemption 3 of FOIA, which allows an agency to
withhold records "specifically exempted from disclosure
by statute" if the statute meets certain criteria. 5
U.S.C. § 552(b)(3). Section 6103(a) of the IRC is an
exemption 3 provision. Tax Analysts v. IRS, 117 F.3d
607, 611 (D.C. Cir. 1997) ("That § 6103 is the sort
of nondisclosure statute contemplated by FOIA exemption 3 is
beyond dispute."). It mandates that tax "[r]eturns
and return information shall be confidential" unless
they fall into one of thirteen tightly drawn categories of
exceptions.  I.R.C. § 6103(a), (c)-(o). We have
described the relationship between section 6103(a) and FOIA
as "entirely harmonious," concluding that tax
returns and return information that section 6103(a) bars from
disclosure are exempt from FOIA. Church of Scientology of
California v. IRS, 792 F.2d 146, 149 (D.C. Cir. 1986).
At the same time, the thirteen exceptions to section 6103(a)
allow the IRS to disclose certain tax records, id.,
which records, in turn, are subject to FOIA.
district court did not decide whether the IRS had met its
burden of establishing that President Trump's tax
information is exempt from FOIA. Instead, it dismissed
EPIC's FOIA claims for failure to exhaust administrative
remedies. Although we agree with the district court's
bottom-line determination that EPIC is not entitled to
relief, we take a different path to get there. Skinner v.
U.S. Dep't of Justice & Bureau of Prisons, 584
F.3d 1093, 1100 (D.C. Cir. 2009) ("[T]his court can
'affirm a correct decision even if on different grounds
than those assigned in the decision on review.'"
(quoting Razzoli v. Fed. Bureau of Prisons, 230 F.3d
371, 376 (D.C. Cir. 2000), overruled on other
grounds, Davis v. U.S. Sentencing Comm'n,
716 F.3d 660 (D.C. Cir. 2013))). As explained infra,
exhaustion does not bar review of EPIC's FOIA claims.
Because EPIC requested only records that are in fact exempt
from FOIA, however, we affirm on the merits the dismissal of
the three FOIA claims.