Millennium Multiple Employer Welfare Benefit Plan and Millennium Marketing Group, Petitioners

34 T .C . No .

STATES TAX COUR T

OUS, Petitioner v . INTERNAL REVENUE, Responden t Filed January 19, 2010 .

P requested a PL would be issuing a PL declined to withdra w publicly released the, alleging that the PLR ' that R failed to del e tended to identify P . disclose the PLR or, delete certain terms from R . R informed P that he adverse to P's interests .

P he request for a PLR . Before R PLR, P petitioned this Court, was arbitrary and capricious and e certain terms in the PLR tha t P asks that we order R not to n the alternative, order R to rom 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 jurisdiction 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 p rt .

SERVED . JAN 19 2010

- 2 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 .

Sealed , for petitioner . .

Sealed , for respondent .

OPINIO N

GOEKE, Judge : This matter is before the Court on respondent'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 petitioner'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 .

'All .Rule references are to'the Tax Court Rules of Practice and Procedure, and all section references are to-the Internal Revenue Code .

On December 6, 2007 , :petitioner petitioned this Cour t pursuant to section 6110 t~ restrain disclosure of respondent' s letter ruling . Petitioner's petition asks the Court t (1 ) Order, under provisions of the Administrative .Procedure Ac t (APA), 5 U .S .C . secs . 551-P⁵⁹, 701-706 (2006), that responden t not publicly disclose the LR ; (2) order that the PLR not be disclosed to Internal Reve hue Service (IRS) employees ; . and (3) order that should the IRS le allowed to publicly . disclose the .

PLR, that the IRS delete c rtain information in the PLR .that would identify petitioner .

Since the filing of the petition in this case, respondent has greed to delete additiona l information . On April 24, 2009, respondent filed his motion fo r summary judgment .

I .

Summary' Judgment Discussio n . Summary judgment is ifstended to expedite litigation an d avoid unnecessary and .expe sive trials .

Fla . Peach Corp . v .

Commissioner , 90 T .C . 678, 681 (1988) . The Court may gran t summary judgment where the e is no genuine issue of material fac t and a decision may be .rend red as s-a matter of law . Rule,121(a ) and (b) ; Sundstrand .Co r Commissioner , 98 T .C . 518, 52 0 (1992), -affd . 17 F .3d 965 (7th Cir ., 1994 ) .

The moving part y bears the . burden of .provin that there is no genuine issue o f material fact, and the Cou t will draw any factual inferences in 4 - the light most favorable to the nonmoving 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 judgment "an adverse party may not rest upon the mere allegations or denials of such party's pleading" but must set forth specific facts, by affidavits or'otherwise "showing tha t there is a genuine issue for trial ." .

II .

The PLR Syste m The IRS has developed the PLR system to .provide guidance tot taxpayers on the tax impact of specific transactions . Certain' information .i .s required in order to file a request for letter rulings and written determinations ., Rev .Proc . 2007-4,-sec .

9 .01, 2007-1 C .B . 118, 131 . Each request must contain a complet e statement of'all facts relating to the transaction, including a statement of the business reasons for the transaction and a detailed description of the transaction in question .

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 this issue, and a statement 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 5 _ 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) provi es that the text of .any written determination shall be ope to public inspection at such .places as the Secretary may by regulation prescribe . Before making such, document available to the ublic for inspection, however, the Secretary is required to d lete certain information that is exempt from disclosure . S c . 6110(c) . . The exempted information includes the names, addres es, and other identifying details of the person to whom the wri ten determination 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 defen e or of foreign policy . Sec .

6110 (c) (1), ., (2), (5) .

III .

Confidential Return :reformation Under Section 610 3 Section 6103 protect s the privacy of taxpayers and restricts Government officers and em loyees from` disclosing confidentia l return information . Lizcao v . Co mmissioner , T .C . Memo . 2008-39 .

Section 6103(a) provides t ;at "Returns and return informatio n shall be confidential" and that no officer or employee of th e Government who obtains such information in an official capacity shall disclose it "except Is authorized by this title" . Sectio n 6103 was designed both "to~protect taxpayers ' 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 taxpayer'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, declaration 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, section 6103(h)(1) provides an explicit exception to these confidentiality requirements to allo w inspection and disclosure ; return and return information by w 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) .

IV .

Publication of PLR s Section 6110(c) provides that before any writte n determination or background file is open or made 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 h notation is made under .subsection (d)(1), identified in the written determination or any background file document ; (2) information pecifically authorized under criteria established y an Executive order to be kept secret in the interes of national defense or foreign policy, and which is n 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 secret and commercial or financial information obtained rom a person . and .privileged(cid:127)or confidential ; (5) information he disclosure of which would constitute a clearly unwarranted invasion of personal privacy ; (6) information examination, operatin by, or on behalf of, responsible for the r financial institutio n ontained in or related t o , or condition reports prepared r for use of an agency gulation or supervision of ; an d (7) geological a data, including map s d geophysical information and concerning wells .

A person may act to r strain certain information from being disclosed in a written det rmination or background file, however, under the . procedures set f rth in section 6110(f) . Sectio n 6110(f)(2) and the accompa ying regulations provide that any taxpayer to whom a written determination pertains (or successor in interest, executor, or ther person authorized by law to ac t for or on behalf of such person) or who has a direct interest in maintaining the confidentillity 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 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 document which is to be open or available to public inspection, an d (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 document under paragraph (1), together with the ' proposed . deletions, file a petition 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 ntention .to disclose a writte n determination .

Respondent moves for ummary judgment on the grounds that :

(1)' The APA does not apply to this disclosure action ; *(2) section 6103 has a specific exempt on for IRS employees ; and (3) th e information in the . PLR is eneric and does not tend to identif y petitioner .

Petitioner objects to respondent's motion and argues that the APA provides this Cour with the authority to orde r respondent not to disclose the PLR at issue because the PLR was arbitrary, `capricious, and an abuse of discretion . Petitioner alleges section 6110(f)(3) grants the Court the express authority to review written determin tions open to public inspection like PLRs . Petitioner contends that the contents of the PLR are contrary to law and thus r spondent.acted arbitrarily , capriciously, and in bad f ith in issuing it . Petitioner further argues that for the same r ason the PLR should not be disclosed to Department of the Trea s ry officials .

Lastly, petitioner ar ues that certain terms in the PLR tend to identify petitioner and that the .Court may determine whether additional information sho ld be redacted from the PLR .

Petitioner contends that r spondent has failed to delete all identifying information as required by section 6110(c)(1) .

V .

Conclusio n 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 thi s Court jurisdiction to make a, determination with respect to the Commissioner's decision to delete or not delete information fro m a PLR before public disclosure . Further, section 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 provided by Congress . See,sec . 7442 ; see also GAF Corp . & Subs . v . Commissioner , 114 T .C . 519, 521 (2000) . This Court's jurisdiction under section 6110(f)(3) .(A) is explicitly limited to making a determination with respect tothe Commissioner's decision not to delete information from a written determination . or background file document which is to be open to public inspection . Sectio 6110 (f) (3) (A) is a precise grant of jurisdiction and does not allow for additional general remedies .

See Hinck v . United States 550 U . S . 501 , 506 (2007) .

Lastly, we address respondent's contention that summar y judgment is-appropriate be ause specific terms in the PLR do not in fact tend to identify p titioner . Respondent contends that there is no material issue of fact in regard to these terms and argues that they do not to d to identify petitioner . On a.

party's motion for summary judgment, we must view the facts i n the light most favorable t the nonmoving party .

Dahlstrom v .

Commissioner , 85 T .C . at 8 1 . Petitioner alleges that terms included in the PLR are sp cific to petitioner, will be easily recognized by anyone in pe itioner's industry, and clearly show petitioner as being the pa ty requesting the PLR . Because there is an issue of material fa t with respect to whether these terms do or do not tend to ident fy petitioner, we shall deny that par t of respondent's motion .

We shall grant respon ent's motion to the extent petitioner asks this Court to order w thholding of the entire PLR at issue .

We shall deny respondent's motion to the extent petitione r contends that there is a m terial fact in dispute as to whether certain terms in the PLR tend to identify petitioner . To reflect the foregoing, 12 - An appropriate order granting respondent's motion in part and denying it in part will be issued .