The Internal Revenue Service Should Continue Taking Action to Improve Compliance With the Freedom of Information Act and Related Procedures

July 2001

Reference No. 2001-10-112

Executive Summary

Section 1102 (d)(3)(A) of the Internal Revenue Service (IRS) Restructuring and Reform Act of 1998 requires the Treasury Inspector General for Tax Administration (TIGTA) to conduct periodic audits of a statistically valid sample of the total number of determinations made by the IRS to deny written requests to disclose information to taxpayers on the basis of Internal Revenue Code (I.R.C.) § 6103 (2000) or the Freedom of Information Act (FOIA) exemption (b)(7).

The IRS FOIA Annual Report for Fiscal Year (FY) 2000 showed that of the 25,486 FOIA and Privacy Act (PA) of 1974 cases processed, the IRS denied or partially denied 4,098 requests (16.1 percent) and replied that responsive records did not exist for 3,893 requests (15.3 percent). The remaining cases were either granted in full, referred to the agency where the records originated, withdrawn by the requester, or not provided because the request did not meet the criteria in 26 C.F.R. § 601.702 (1998) or for other miscellaneous reasons.

The overall objective of this review was to determine if the IRS improperly withheld information requested by taxpayers in writing, based on FOIA exemption (b)(3), in conjunction with I.R.C. § 6103, and/or FOIA exemption (b)(7) or by replying that responsive records did not exist. To accomplish this objective, we determined if:


The IRS should continue taking action to ensure that FOIA, PA, and I.R.C. § 6103 requesters are provided with all the information they are entitled to when responding to their written requests. The percentage of FOIA, PA, and I.R.C. § 6103 cases where information was improperly withheld increased slightly since our FY 2000 review, while the percentage and length of untimely FOIA and PA determinations decreased significantly. The types of information improperly withheld, as well as the causes of the improper withholdings, were similar to those identified in our FY 2000 review. Chart 1 shows the results of our FY 2000 review compared to this review.

Chart 1 was removed due to its size. To see the Chart 1, please go to the Adobe PDF version of the report on the TIGTA Public Web Page.

Based upon the statistically valid samples, disclosure offices:

Based upon our FY 1999 and FY 2000 reviews in this area, the IRS is taking action to improve compliance with the FOIA and related procedures, which should better ensure that requesters are provided with all the information to which they are entitled. For example, in August 2000, the IRS issued more comprehensive guidelines for employees involved in searching for information and preparing responses associated with FOIA requests. In addition, Disclosure management implemented a new computer system during FY 2000, the Electronic Disclosure Information Management System, to better control cases. The TIGTA did not review the effectiveness of these actions because the scope of this review included only cases closed prior to the date the IRS planned to complete corrective actions made in response to our prior reports.

Taxpayers’ rights were potentially violated in cases where the IRS improperly withheld information requesters were entitled to receive under the FOIA and when requests were not responded to within the time periods required by law. As a result, the IRS is at risk of incurring unnecessary costs associated with administrative appeals and civil litigation. We could not determine the amount of costs associated with FOIA appeals and litigation related to denials or partial denials based on I.R.C. § 6103 or FOIA exemption (b)(7) or where the IRS replied that responsive records were not available. However, IRS records showed that costs associated with all FOIA litigation-related activities were estimated around $700,000. This represents 8.0 percent of the total costs associated with responding to all FOIA requests during FY 2000.

Additional Information Can Be Provided in Response to Taxpayers’ Written Requests for Information

At times, the IRS improperly withheld information that requesters were entitled to receive in response to their written inquiries under the FOIA, the PA, and I.R.C. § 6103. Table 1 shows the results of our review of two statistically valid samples. These samples were based on a 90 percent confidence level and included cases closed during the period October 1, 1999, through July 31, 2000.

Table 1 – Sample Results for Denied Requests

Type of Request

Actual Error Rate

Population of Denied Requests

(10/1/99 – 7/31/00)

Estimated Nationwide Error Rate

Projected Number of Improperly Withheld Requests




6.6% – 14.9%

376 – 854

I.R.C. § 6103



3.9% – 10.0%

410 – 1,055

(Note: In one of the FOIA/PA error cases, Disclosure management disagreed with our conclusion that an improper withholding occurred.)

Information requested by taxpayers in FOIA and PA requests processed under the FOIA was improperly withheld primarily because the IRS did not correctly apply the FOIA or I.R.C. § 6103 when denying requests for information or did not conduct a proper search for records. Information requested by taxpayers under I.R.C. § 6103 was improperly withheld because the IRS did not conduct an adequate search for the information or did not fully address the taxpayers’ requests even though information was readily available. In addition, some case files did not contain an indication of supervisory review.

Responses to Freedom of Information Act and Privacy Act Requests Are More Timely, But Further Improvement Is Possible

Although the IRS has significantly improved the timeliness of responses to FOIA and PA requests where information was denied or responsive records could not be located, responses were not always made within the time periods allowed by law. Responses should be provided within 20 days for FOIA requests and 30 days for PA requests (both time periods exclude Saturdays, Sundays, and legal public holidays) after the responsible disclosure office receives the request. In 30 of the 149 (20.1 percent) cases in the sample, responses were not sent to requesters timely, as compared with 33.8 percent in the FY 2000 review. In addition, only 4 of the 30 (13.3 percent) untimely responses were more than 90 workdays untimely, as compared with 24.3 percent (26 of 107) in the FY 2000 review. Table 2 shows the age of the untimely responses.

Table 2 - Aging Schedule for Untimely Responses

Less Than or Equal to 30 Workdays Untimely

31 to 60
Workdays Untimely

61 to 90
Workdays Untimely

More Than 90 Workdays Untimely

Total Untimely Cases






The factors contributing to the delays in responding to requests were similar to those cited in our FY 2000 report. Review of the 30 untimely cases showed that 1) disclosure personnel were waiting for the requested documents from other IRS offices, 2) case files did not always contain an indication of supervisory review, 3) disclosure personnel needed additional time to copy and review voluminous documents, and 4) higher priority requests were processed first. In addition, case histories for half of the untimely responses did not contain any indication of why the response was late.


In response to the recommendations made in our prior reports, IRS management is taking corrective actions to improve compliance with the FOIA and related procedures. These recommendations are still valid for the issues contained in this report. Until the corrective actions are properly implemented, the IRS may not provide FOIA, PA, and I.R.C. § 6103 requesters with all the information they are legally entitled to within the time periods required by law.

Management’s Response: IRS management agreed with the observations in our draft report and is implementing corrective actions to recommendations made in our FY 1999 and FY 2000 reports. The full text of their comments is included in Appendix V.