Watchdog Bites Tax Man

Watchdog Bites Tax Man

  • March 6, 2024
PPT prevails over stonewalling IRS

They say you can’t fight city hall, but Protect the Public’s Trust (PPT) did fight the Internal Revenue Service in a Freedom of Information Act (FOIA) lawsuit – and won.

At issue was a PPT FOIA request to the IRS on December 1, 2022, for communications about meetings between IRS Commissioner Charles Rettig and infamous cryptocurrency exchange FTX. The agency would not process the request, saying it was overly broad and did not meet FOIA guidelines. PPT pointed out that it was seeking communications between a single government official and a handful of executives at a single company, over a specific time frame, and had provided specific names, email addresses and phone numbers – far more detailed search information than most FOIA requests contain. The IRS continued to refuse and closed the case.

PPT filed a lawsuit challenging the denial on February 7, 2023. Faced with a judge’s order to justify its denial, on March 27th the agency opted to voluntarily conduct the FOIA search using PPT’s original search criteria. Apparently, the request was so overly broad the IRS found no records responsive to the request.

Having “substantially prevailed” and received the search results it initially sought, PPT filed a motion for attorney’s fees and costs as provided for according to FOIA’s fee-shifting provision. The IRS disputed this. On February 16, 2024, the judge granted PPT’s motion, explaining that “PPT sued because it hoped to obtain responsive records, but PPT could not have known before litigating IRS’s obdurate refusal to search that no such records existed … IRS effectively induced PPT to sue by refusing to process its FOIA request.”

The court awarded the entirety of the $17,884.42 in fees and costs PPT requested in its latest motion. PPT’s original request was for $5,281.02.

“It’s gratifying that the D.C. District Court has vindicated the intent and spirit of the Freedom of Information Act,” said PPT Director Michael Chamberlain. “The IRS’s initial search refusal was arbitrary, and its intransigence thereafter was a gamble that PPT wouldn’t spend the time and money to fight it in court. This ruling should make it clear to all federal agencies: stonewalling on legal, reasonable FOIA requests is unacceptable and counterproductive. That information belongs to the public and U.S. citizens have the right to demand government transparency.”