                                           ANONYMOUS, PETITIONER v. COMMISSIONER                                  OF INTERNAL
                                                        REVENUE, RESPONDENT
                                                        Docket No. 28246–07D.                 Filed January 19, 2010.

                                                 P requested a PLR from R. R informed P that he would be
                                               issuing a PLR adverse to P’s interests. P declined to withdraw
                                               the request for a PLR. Before R publicly released the PLR, P
                                               petitioned this Court, alleging that the PLR was arbitrary and
                                               capricious and that R failed to delete certain terms in the
                                               PLR that tended to identify P. P asks that we order R not to
                                               disclose the PLR or, in the alternative, order R to delete cer-
                                               tain terms from the PLR. R moved for summary judgment
                                               and argues that this Court lacks jurisdiction to prevent R
                                               from disclosing the PLR at issue and that none of the terms
                                               in the PLR would tend to identify P. Held: This Court’s juris-
                                               diction is limited to making a determination with respect to
                                               whether certain terms in the PLR are required to be deleted
                                               before publication. Therefore, we will grant R’s motion for
                                               summary judgment in part. Held, further, because a question
                                               of fact remains whether certain terms in the PLR tend to
                                               identify P, we will deny R’s motion for summary judgment in
                                               part.

                                                                                                                                    13




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                                           Sealed, for petitioner.
                                           Sealed, for respondent.

                                                                                  OPINION

                                        GOEKE, Judge: This matter is before the Court on respond-
                                      ent’s motion for summary judgment filed pursuant to Rule
                                      121. 1 For the reasons stated herein, we shall grant in part
                                      and deny in part respondent’s motion.

                                                                               Background
                                         On October 1, 2004, petitioner submitted a request for a
                                      private letter ruling (PLR). On September 17, 2007,
                                      respondent contacted petitioner to inform petitioner that
                                      respondent intended to issue the PLR with a determination
                                      adverse to petitioner’s request. Respondent informed peti-
                                      tioner’s counsel that petitioner could withdraw the request,
                                      but petitioner declined. On October 5, 2007, respondent
                                      issued a written adverse determination letter ruling against
                                      petitioner.
                                         On December 6, 2007, petitioner petitioned this Court
                                      pursuant to section 6110 to restrain disclosure of respond-
                                      ent’s letter ruling. Petitioner’s petition asks the Court to: (1)
                                      Order, under provisions of the Administrative Procedure Act
                                      (APA), 5 U.S.C. secs. 551–559, 701–706 (2006), that
                                      respondent not publicly disclose the PLR; (2) order that the
                                      PLR not be disclosed to Internal Revenue Service (IRS)
                                      employees; and (3) order should the IRS be allowed to publicly
                                      disclose the PLR, that the IRS delete certain information in
                                      the PLR that would identify petitioner. Since the filing of the
                                      petition in this case, respondent has agreed to delete addi-
                                      tional information. On April 24, 2009, respondent filed his
                                      motion for summary judgment.

                                                                                Discussion
                                      I. Summary Judgment
                                        Summary judgment is intended to expedite litigation and
                                      avoid unnecessary and expensive trials. Fla. Peach Corp. v.
                                      Commissioner, 90 T.C. 678, 681 (1988). The Court may grant
                                        1 All Rule references are to the Tax Court Rules of Practice and Procedure, and all section

                                      references are to the Internal Revenue Code.




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                                      summary judgment where there is no genuine issue of mate-
                                      rial fact and a decision may be rendered as a matter of law.
                                      Rule 121(a) and (b); Sundstrand Corp. v. Commissioner, 98
                                      T.C. 518, 520 (1992), affd. 17 F.3d 965 (7th Cir. 1994). The
                                      moving party bears the burden of proving that there is no
                                      genuine issue of material fact, and the Court will draw any
                                      factual inferences in the light most favorable to the non-
                                      moving party. Dahlstrom v. Commissioner, 85 T.C. 812, 821
                                      (1985). Rule 121(d) provides that where the moving party
                                      properly makes and supports a motion for summary judg-
                                      ment ‘‘an adverse party may not rest upon the mere allega-
                                      tions or denials of such party’s pleading’’ but must set forth
                                      specific facts, by affidavits or otherwise ‘‘showing that there
                                      is a genuine issue for trial.’’
                                      II. The PLR System
                                         The IRS has developed the PLR system to provide guidance
                                      to taxpayers on the tax impact of specific transactions. Cer-
                                      tain information is required in order to file requests for letter
                                      rulings and written determinations. Rev. Proc. 2007–4, sec.
                                      9.01, 2007–1 C.B. 118, 131. Each request must contain a
                                      complete statement of all facts relating to the transaction,
                                      including a statement of the business reasons for the trans-
                                      action and a detailed description of the transaction in ques-
                                      tion. Id. sec. 9.02(1), 2007–1 C.B. at 131. Additionally, copies
                                      of all pertinent documents and an analysis of material facts
                                      must be included. Id. sec. 9.02(2)–(3), 2007–1 C.B. at 131–
                                      132. The request must also include relevant authorities, even
                                      those contrary to the taxpayer’s position, a statement
                                      regarding previous consideration of the issue, and a state-
                                      ment identifying any pending legislation. Id. sec. 9.02(4)–(8),
                                      2007–1 C.B. at 132–133. To assist the IRS in complying with
                                      section 6110, the request for a letter ruling should also
                                      include a ‘‘deletions statement’’. Id. sec. 9.02(9), 2007–1 C.B.
                                      at 133.
                                         Section 6110(a) provides that the text of any written deter-
                                      mination shall be open to public inspection at such places as
                                      the Secretary may by regulation prescribe. Before making
                                      such document available to the public for inspection, how-
                                      ever, the Secretary is required to delete certain information
                                      that is exempt from disclosure. Sec. 6110(c). The exempted




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                                      information includes the names, addresses, and other identi-
                                      fying details of the person to whom the written determina-
                                      tion pertains, information the disclosure of which would
                                      create a clearly unwarranted invasion of privacy, and
                                      information specifically authorized under Executive order to
                                      be kept secret in the interest of national defense or of foreign
                                      policy. Sec. 6110(c)(1), (2), (5).
                                      III. Confidential Return Information Under Section 6103
                                         Section 6103 protects the privacy of taxpayers and restricts
                                      Government officers and employees from disclosing confiden-
                                      tial return information. Lizcano v. Commissioner, T.C. Memo.
                                      2008–39. Section 6103(a) provides that ‘‘Returns and return
                                      information shall be confidential’’ and that no officer or
                                      employee of the Government who obtains such information in
                                      an official capacity shall disclose it ‘‘except as authorized by
                                      this title’’. Section 6103 was designed both ‘‘to protect tax-
                                      payers’ privacy and, therefore, to encourage the taxpayers’
                                      free and open disclosure to the Service.’’ Estate of Yaeger v.
                                      Commissioner, 92 T.C. 180, 184 (1989) (citing Lampert
                                      v. United States, 854 F.2d 335, 336 (9th Cir. 1988)). ‘‘A tax-
                                      payer’s return, or return information, generally may not be
                                      revealed to a third party unless such disclosure is specifically
                                      authorized under section 6103.’’ Id. (citing Martin v. IRS, 857
                                      F.2d 722 (10th Cir. 1988)). Section 6103(b)(1) defines the
                                      ‘‘term ‘return’ [to mean] any tax or information return, dec-
                                      laration of estimated tax, or claim for refund required by, or
                                      provided for or permitted under, the provisions of this title
                                      which is filed with the Secretary’’. Section 6103(b)(2) provides
                                      an expansive definition of return information. However, sec-
                                      tion 6103(h)(1) provides an explicit exception to these con-
                                      fidentiality requirements to allow inspection and disclosure
                                      of return and return information by officers and employees
                                      of the Department of the Treasury whose official duties
                                      require such inspection or disclosure for tax administration
                                      purposes. United States v. Monumental Life Ins. Co., 440
                                      F.3d 729, 734 (6th Cir. 2006).




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                                      IV. Publication of PLRs
                                        Section 6110(c) provides that before any written deter-
                                      mination or background file is made open or available to
                                      public inspection, the Secretary shall delete:
                                        (1) the names, addresses, and other identifying details of the person to
                                      whom the written determination pertains and of any other person, other
                                      than a person with respect to whom a notation is made under subsection
                                      (d)(1), identified in the written determination or any background file docu-
                                      ment;
                                        (2) information specifically authorized under criteria established by an
                                      Executive order to be kept secret in the interest of national defense or for-
                                      eign policy, and which is in fact properly classified pursuant to such
                                      Executive order;
                                        (3) information specifically exempted from disclosure by any statute
                                      (other than this title) which is applicable to the Internal Revenue Service;
                                        (4) trade secrets and commercial or financial information obtained from
                                      a person and privileged or confidential;
                                        (5) information the disclosure of which would constitute a clearly
                                      unwarranted invasion of personal privacy;
                                        (6) information contained in or related to examination, operating, or
                                      condition reports prepared by, or on behalf of, or for use of an agency
                                      responsible for the regulation or supervision of financial institutions; and
                                        (7) geological and geophysical information and data, including maps, con-
                                      cerning wells.

                                        A person may act to restrain certain information from
                                      being disclosed in a written determination or background file,
                                      however, under the procedures set forth in section 6110(f).
                                      Section 6110(f)(2) and the accompanying regulations provide
                                      that any taxpayer to whom a written determination pertains
                                      (or successor in interest, executor, or other person authorized
                                      by law to act for or on behalf of such person) or who has a
                                      direct interest in maintaining the confidentiality of a written
                                      determination or background file document may file an
                                      administrative request that material be deleted from the
                                      written determination (or background file document). See
                                      sec. 301.6110–5(b)(1), Proced. & Admin. Regs.
                                        Section 6110(f)(3) establishes jurisdiction in this Court to
                                      determine whether, and to what extent, a disputed portion of
                                      a written determination or background file document may be
                                      open to public inspection. Section 6110(f)(3) provides in part:
                                           (A) CREATION OF REMEDY.—Any person—
                                             (i) to whom a written determination pertains (or a successor in
                                           interest, executor, or other person authorized by law to act for or on




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                                           behalf of such person), or who has a direct interest in maintaining the
                                           confidentiality of any such written determination or background file
                                           document (or portion thereof),
                                             (ii) who disagrees with any failure to make a deletion with respect to
                                           that portion of any written determination or any background file docu-
                                           ment which is to be open or available to public inspection, and
                                             (iii) who has exhausted his administrative remedies as prescribed
                                           pursuant to paragraph (2),
                                      may, within 60 days after the mailing by the Secretary of a notice of
                                      intention to disclose any written determination or background file docu-
                                      ment under paragraph (1), together with the proposed deletions, file a peti-
                                      tion in the United States Tax Court (anonymously, if appropriate) for a
                                      determination with respect to that portion of such written determination
                                      or background file document which is to be open to public inspection.

                                      See also Rules 220 through 229A. Section 6110(f) requires
                                      the IRS to give notice of its intention to disclose a written
                                      determination.
                                         Respondent moves for summary judgment on the grounds
                                      that: (1) The APA does not apply to this disclosure action; (2)
                                      section 6103 has a specific exemption for IRS employees; and
                                      (3) the information in the PLR is generic and does not tend
                                      to identify petitioner.
                                         Petitioner objects to respondent’s motion and argues that
                                      the APA provides this Court with the authority to order
                                      respondent not to disclose the PLR at issue because the PLR
                                      was arbitrary, capricious, and an abuse of discretion. Peti-
                                      tioner alleges section 6110(f)(3) grants the Court the express
                                      authority to review written determinations open to public
                                      inspection like PLRs. Petitioner contends that the contents of
                                      the PLR are contrary to law and thus respondent acted arbi-
                                      trarily, capriciously, and in bad faith in issuing it. Petitioner
                                      further argues that for the same reason the PLR should not
                                      be disclosed to Department of the Treasury officials.
                                         Lastly, petitioner argues that certain terms in the PLR tend
                                      to identify petitioner and that the Court may determine
                                      whether additional information should be redacted from the
                                      PLR. Petitioner contends that respondent has failed to delete
                                      all identifying information as required by section 6110(c)(1).
                                      V. Conclusion
                                        On the basis of our examination of the record before us, we
                                      shall grant in part and deny in part respondent’s motion for
                                      summary judgment. Section 6110(f)(3)(A) explicitly grants




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                                      this Court jurisdiction to make a determination with respect
                                      to the Commissioner’s decision to delete or not delete
                                      information from a PLR before public disclosure. Further, sec-
                                      tion 6103(h)(1) authorizes the disclosure of confidential
                                      return information to Department of the Treasury officers
                                      and employees. Petitioner’s argument that the APA allows
                                      this Court to prevent the Commissioner from disclosing a PLR
                                      is incorrect. The APA does not create a right of action in this
                                      circumstance. See, e.g., 5 U.S.C. sec. 703 (2006); Califano v.
                                      Sanders, 430 U.S. 99 (1977). Section 6110(f)(3)(A) limits this
                                      Court’s determination to the Commissioner’s deletion
                                      decisions. That section does not give this Court the authority
                                      to order the Commissioner to restrain disclosure of a PLR in
                                      its entirety. The Tax Court is a Court of limited jurisdiction,
                                      and we may exercise our jurisdiction only to the extent pro-
                                      vided by Congress. See sec. 7442; see also GAF Corp. & Subs.
                                      v. Commissioner, 114 T.C. 519, 521 (2000). This Court’s juris-
                                      diction under section 6110(f)(3)(A) is explicitly limited to
                                      making a determination with respect to the Commissioner’s
                                      decision not to delete information from a written determina-
                                      tion or background file document which is to be open to
                                      public inspection. Section 6110(f)(3)(A) is a precise grant of
                                      jurisdiction and does not allow for additional general rem-
                                      edies. See Hinck v. United States, 550 U.S. 501, 506 (2007).
                                         Lastly, we address respondent’s contention that summary
                                      judgment is appropriate because specific terms in the PLR do
                                      not in fact tend to identify petitioner. Respondent contends
                                      that there is no material issue of fact in regard to these
                                      terms and argues that they do not tend to identify petitioner.
                                      On a party’s motion for summary judgment, we must view
                                      the facts in the light most favorable to the nonmoving party.
                                      Dahlstrom v. Commissioner, 85 T.C. at 821. Petitioner
                                      alleges that terms included in the PLR are specific to peti-
                                      tioner, will be easily recognized by anyone in petitioner’s
                                      industry, and clearly show petitioner as being the party
                                      requesting the PLR. Because there is an issue of material fact
                                      with respect to whether these terms do or do not tend to
                                      identify petitioner, we shall deny that part of respondent’s
                                      motion.
                                         We shall grant respondent’s motion to the extent petitioner
                                      asks this Court to order withholding of the entire PLR at
                                      issue. We shall deny respondent’s motion to the extent peti-




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                                      tioner contends that there is a material fact in dispute as to
                                      whether certain terms in the PLR tend to identify petitioner.
                                      To reflect the foregoing,
                                                                      An appropriate order granting respondent’s
                                                                   motion in part and denying it in part will be
                                                                   issued.

                                                                               f




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