Slow FOIA Response Makes IRS Bad Faith Allegations Credible

Slow FOIA Response Makes IRS Bad Faith Allegations Credible

  • March 12, 2024

Leslie Book, Tax Notes

It can be frustrating waiting for IRS responses to Freedom of Information Act requests. While FOIA allows access to the courts when an agency fails to respond timely, the recent case of The 2005 Robert Julien Family Delaware Dynasty Trust v. IRS, No. 9:23-cv-80756 (S.D. Fla. 2024), highlights the relationship between discovery under the Federal Rules of Civil Procedure and FOIA. The case reveals limits on what a court may do if the IRS fails to dedicate sufficient resources to ensure that FOIA requests are responded to in a timely way. While district court judges wield broad powers, there are limits on what an Article III judge may be willing to compel an agency to do. At the same time, as Robert Julien Family Delaware Dynasty Trust illustrates, if an agency fails to timely address a FOIA request, it may open the door to discovery that will explore the agency’s efforts (or lack of effort) in responding.

I recently discussed Protect the Public’s Trust v. IRS, No. 23-cv-340 (D.D.C. 2024), which raised a novel FOIA issue in the context of a public interest organization seeking to find any information concerning the relationship between former IRS executives and executives of FTX, the bankrupt crypto exchange and hedge fund. In that case, the IRS quickly rejected a FOIA request as essentially nonprocessible. When Protect the Public’s Trust sued, the IRS reversed course and agreed to do the search, and quickly informed the court that there were no responsive documents. In an important opinion, Protect the Public’s Trust held that if an agency improperly fails to consider a FOIA request, a party may still be entitled to attorney’s fees even if a FOIA search ultimately comes up empty.

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