Crestek, Inc. & Subsidiaries v. IRS, No. 17-00200, 2018 WL 4078279 (D.D.C. Aug. 27, 2018) (McFadden, J.)

Crestek, Inc. & Subsidiaries v. IRS, No. 17-00200, 2018 WL 4078279 (D.D.C. Aug. 27, 2018) (McFadden, J.)

Re:  Request for records related to requester's income tax liabilities from 2006 to 2014

Disposition: 

• Litigation Considerations, Adequacy of Search:  "First, plaintiff complains that the declarations do not say the IRS located 'all responsive documents.'"  The court finds that, "the law does not require such a representation."  "Second, plaintiff complains that [the agency employees], 'who actually originally gathered and identified the documents,' did not author the declarations."  The court finds that, "[b]ut plaintiff cites no legal authority stating that the person who conducted a search must author the agency's declaration to prove the search's adequacy."  "Nor does it cite anything in the record to suggest that the declarants did not conduct the search as they claim." 
   
• Exemption 5, Deliberative Process Privilege:  The court finds that, "[t]he IRS has clarified that it redacted six emails reflecting the content of ex parte communications under the deliberative process privilege."  "These communications were about whether the issues in plaintiff's case were suitable for Fast Track settlement and about how the IRS might withdraw the Fast Track application if it wished."  "They were predecisional and deliberative because they helped the IRS decide whether to pursue a Fast Track settlement or withdraw the Fast Track application." 
   
• Exemption 7(D):  "The IRS had a confidential source in proceedings against plaintiff, it has not disclosed this source, and it has withheld or redacted 17 groups of responsive records that could reasonably be expected to identify the source."  "Plaintiff argues that it already knows the identities of two whistleblowers, that one of them has waived her rights to confidentiality, and that the other has no right to confidentiality because he did not provide information directly to the IRS on a Form 211."  The court finds that, "[its] review of the record, the briefing, and the IRS's in camera submission persuade [it] to reject plaintiff's argument."  "Further explanation on the public record would thwart the purposes of the exemption, but [the court is] satisfied that the IRS's withholdings and redactions are necessary to avoid disclosing the identity of a confidential source."
   
• Exemption 7(E):  "The IRS has withheld or redacted 15 groups of responsive records under Exemption 7(E)."  "Plaintiff challenges the withholding of six partially-completed copies of IRS Internal Form 11369."  "The IRS uses Internal Form 11369 to evaluate information provided by whistleblowers."  The court finds that, "[r]elease of this information would disclose the process by which the IRS evaluates whistleblower information and risk circumvention of the law . . . [t]hus, Exemption 7(E) applies."