Section of Taxation Publications
  VOL. 57
NO. 4
Contents | TTL Home

 Note: The following is an excerpt from the introduction to the article as published in The Tax Lawyer. Author citations have been omitted for brevity. Tax Section members may read the article in its entirety in Adobe Acrobat format.
What's CARE Got to Do with It? Tax Analysts v. Internal Revenue Service and the CARE Act of 2003
Andrea Hogan


In Tax Analysts v. Internal Revenue Service, the United States Court of Appeals for the District of Columbia invalidated portions of the Treasury regulations that barred the public disclosure of rulings denying or revoking exempt organization status. This holding reversed the district court’s grant of summary judgment for the Service. The district court held that section 6110 was ambiguous and that the Service’s regulations were entitled to deference under a Chevron analysis. The court of appeals disagreed with the lower court and determined that the plain language of section 6110 was unambiguous. The cases revolved around a complex statutory and regulatory scheme, at the center of which were two Code sections and two regulations. The statutory provisions involved in the dispute were sections 6110 and 6104. Section 6110 provides that written determinations and background file documents shall be open to public inspection in redacted form. Section 6110(l) provides an exception to section 6110, and states that the public disclosure rule of section 6110 shall not apply to any matter to which the more specific rules of section 6104 apply. Section 6104(a)(1)(A) requires the Service to disclose letters or other documents issued by the Service with respect to application for exempt organization status for which the Service determined that the organization was entitled to such status. However, unlike section 6110, section 6104 does not require that any information be redacted. The relevant regulations under sections 6104 and 6110 provide both that denials and revocations of exempt organization status fall under the ambit of section 6104, and that such determinations will not be disclosed by the Service. By invalidating the regulations that provided for nondisclosure, the court of appeals confirmed the twin goals of the Tax Reform Act of 1976: public disclosure and taxpayer privacy. But, eight months prior to the court of appeals’ decision, the Senate had grappled with the exact issue decided in Tax Analysts II in the proposed CARE Act of 2003. The proposed legislation in effect codifies the court’s holding in Tax Analysts II, although the Act was in fact drafted before the decision.

This Note focuses not on the holding in Tax Analysts II, but rather on how the court arrived at its decision and how that decision and the proposed CARE Act of 2003, if enacted, will hereafter harmoniously co-exist. Arguably, there is a tension between the Tax Analysts II case, which holds that the statute was clear yet incorrectly interpreted by the Service, and the pending CARE Act, which seems to convey a legislative intent to change the statutory language to reach the same result that the court of appeals determined the statutory language already ensured. Part I of this Note describes the facts of Tax Analysts I and II. Part II explores both courts’ interpretations of sections 6110 and 6104. Part III describes the pertinent part of the CARE Act of 2003 and analyzes whether the court of appeals may have utilized the proposed legislation in interpreting the Code, and additionally, whether the CARE Act of 2003 will codify the outcome of Tax Analysts II if the law is eventually enacted. Part IV concludes that despite, or perhaps because of, the result of Tax Analysts II, Congress should move forward with an amendment to section 6110(l) and, in doing so, explicitly state that the purpose of the amendment is to clarify existing law.


Published by
Section of Taxation, American Bar Association
With the Assistance of
Georgetown University Law Center


If you are an ABA member, you can receive The Tax Lawyer and the Section NewsQuarterly, both quarterly publications, when you join the Section of Taxation. Anyone can subscribe to The Tax Lawyer by contacting the ABA Service Center.