UNITED STATES COURT OF APPEALS FOR THE D.C. CIRCUIT


TAX ANALYSTS

v.

IRS


99-5284a

D.C. Cir. 2000


*	*	*


Sentelle, Circuit Judge: Tax Analysts, a publisher of tax  material,
sued the Internal Revenue Service (IRS) and the  Christian
Broadcasting Network (CBN) under the Freedom  of Information Act
(FOIA), 5 U.S.C. s 552 (1994), and Inter- nal Revenue Code (I.R.C.) s
6104, 26 U.S.C. s 6104 (1994),  respectively, in an effort to obtain
copies of a closing agree- ment reached between the IRS and CBN in
conjunction with  CBN's filing for tax exempt status under I.R.C. s
501(a) and  (c)(3), 26 U.S.C. s 501(a), (c)(3) (1994). The IRS filed a
 motion for judgment on the pleadings pursuant to Federal  Rule of
Civil Procedure 12(c), and CBN filed a motion to  dismiss for failure
to state a claim pursuant to Federal Rule  of Civil Procedure
12(b)(6). The district court granted both  motions. Tax Analysts
appealed. While we affirm the dis- trict court's dismissal of the
action against CBN, we find the  present record inadequate to resolve
Tax Analysts' claim  against the IRS, and remand for further


A.


CBN has been an organization exempt from taxation under  I.R.C. s
501(a) and (c)(3) since 1961. In 1985 and 1986, CBN  allegedly engaged
in political activities inconsistent with its  status as a tax exempt
organization, prompting the IRS to  audit CBN and to examine CBN's
continued eligibility for tax  exempt status.


On February 2, 1998, CBN filed with the IRS a Form 1023  Application
for Exempt Status. On March 13, 1998, the IRS  granted CBN's
application retroactive to April 1, 1987. On  March 16, CBN issued a
press release announcing that it had  entered into an agreement with
the IRS to conclude an audit  and to preserve its exempt status.
Specifically, the press  release indicated that the agreement entailed


CBN's tax exemption for 1986 and 1987, the relinquishment  of exempt
status for three CBN affiliates, a "significant  payment" by CBN to
the IRS, and various other promises  and modifications to CBN


On April 6, 1998, Tax Analysts sent a FOIA request to the  IRS seeking
a copy of the agreement between the IRS and  CBN referred to in the
press release; any closing agreement  relating to the issues described
in the press release; any  written correspondence or memoranda of
meetings or conver- sations between the IRS and CBN pertaining to
those agree- ments or the press release; and any renewal, revocation,
or  modification of any ruling granting tax exempt status to  CBN. A
few months later, on June 29, 1998, the IRS  responded and, citing
FOIA Exemption 3, 5 U.S.C.  s 552(b)(3), and I.R.C. s 6103, declined
to disclose any of the  requested information except the Form 1023
filed on Febru- ary 2, 1998, and the March 13, 1998 determination
letter from  the IRS to CBN granting exempt status.


On July 20, 1998, Tax Analysts sent a letter to CBN  seeking the same
information as requested from the IRS,  citing I.R.C. s 6104 as the
basis for its request. Like the  IRS, CBN declined to make available
any documents other  than the Form 1023 and letter from the IRS
granting exempt  status. Shortly thereafter, Tax Analysts filed this
action  against the IRS and CBN seeking access to the requested 


As a general matter, FOIA provides for the disclosure upon  request of
government-held records and documents. See 5  U.S.C. s 552. FOIA's
general disclosure rule is subject to  nine statutory exceptions,
however. See id. s 552(b). The  government bears the burden of proving
that any requested  documents it withholds fall within one of the nine
exceptions.  See id. s 552(a)(4)(B); Petroleum Info. Corp. v. United
States  Dep't of the Interior, 976 F.2d 1429, 1433 (D.C. Cir. 1992).


The exemption asserted by the IRS in this case, "Exemp- tion 3,"
permits the withholding of government records "spe- cifically exempted
from disclosure by statute ... provided  that such statute (A)
requires that the matters be withheld 


from the public in such a manner as to leave no discretion on  the
issue, or (B) establishes particular criteria for withholding  or
refers to particular types of matters to be withheld...."  5 U.S.C. s
552(b)(3). The I.R.C. explicitly provides for the  confidentiality of
tax returns and "return information."  I.R.C. s 6103(a), 26 U.S.C. s
6103(a). This court and others  have recognized consistently that
I.R.C. s 6103(a) is a non- disclosure statute falling within the scope
of FOIA Exemption  3. See, e.g., Church of Scientology v. IRS, 484
U.S. 9, 11  (1987); Lehrfeld v. Richardson, 132 F.3d 1463, 1466 (D.C.
Cir.  1998); Tax Analysts v. IRS, 117 F.3d 607, 611 (D.C. Cir.  1997);
Aronson v. IRS, 973 F.2d 962, 964 (1st Cir. 1992).


I.R.C. s 6104(a)(1)(A), cited by Tax Analysts in its request  to CBN,
provides for the disclosure of certain documents  relating to
organizations exempt from tax under I.R.C.  s 501(c)(3), like CBN:


If an organization described in section 501(c) or (d) is  exempt from
taxation under section 501(a) for any tax- able year, the application
filed by the organization with  respect to which the Secretary made
his determination  that such organization was entitled to exemption
under  section 501(a), together with any papers submitted in  support
of such application, and any letter or other  document issued by the
Internal Revenue Service with  respect to such application shall be
open to public inspec- tion at the national office of the Internal
Revenue Ser- vice.


26 U.S.C. s 6104(a)(1)(A).1 I.R.C. s 6104 also requires an  exempt
organization to make available for public inspection a 




__________

n 1 All editions of the United States Code since 1970 have actually 
read "any paper" instead of "any papers" as we set forth above.  See
26 U.S.C. s 6104 (1970); see also United States Code editions  of
1976, 1982, 1988, and 1994. However, the original language "any 
papers" was inserted into s 6104 in 1958, see Technical Amend- ments
Act of 1958, Pub. L. No. 85-866, s 75(a), 72 Stat. 1606, 1660- 61
(1958), and appeared in the 1958 and 1964 editions of the United 
States Code. The United States Statutes at Large are "legal  evidence"
of the law, 1 U.S.C. s 112 (1994), whereas the titles of the 


copy of its application for exemption, "together with a copy of  any
papers submitted in support of such application and any  letter or
other document issued by the Internal Revenue  Service with respect to
such application." 26 U.S.C.  s 6104(e)(2)(A)(ii) (Supp. III 1997).2
We recognized in Lehr-  feld that documents disclosable under I.R.C. s
6104 may  contain material that otherwise constitutes "return informa-
tion" protected from disclosure by I.R.C. s 6103. Lehrfeld,  132 F.3d
at 1467. I.R.C. s 6104 therefore may be character- ized as an
exception to the exception from the general  disclosure rule offered
by FOIA Exemption 3 and I.R.C.  s 6103. The parties in this case agree
that s 6104, where it  applies, controls s 6103; and we will assume as
much for the  purpose of this case.




__________

n United States Code only serve as "prima facie" evidence of the law 
unless they are enacted as "positive law," in which case they too 
serve as legal evidence of the laws. 1 U.S.C. s 204(a) (1994); see 
also Stephan v. United States, 319 U.S. 423, 426 (1943) (per curiam) 
(Statutes at Large prevail over prima facie portions of U.S.C.).  The
I.R.C. has been enacted as a separate code and is therefore  positive
law. See Internal Revenue Code of 1954, ch. 736, 68A Stat.  1 (1954).
Though both the Statutes at Large and I.R.C. could be  said to be
authoritative here, we use the "any papers" language of  the original
enactment appearing in the Statutes at Large. The  difference is
irrelevant to the outcome of the case, and we will thus  disregard an
apparent scrivener's error made by a codifier without  congressional
direction. Cf. United States v. Welden, 377 U.S. 95,  98 n.4 (1964)
(holding that a "change of arrangement" by a codifier  to a section
not enacted as positive law "should be given no  weight").


2 Legislation enacted in 1998 amended s 6104, repealing former 
subsections (d) and (e) and inserting a new subsection (d) that 
includes the public inspection requirement of former s 6104(e). See 
Omnibus Consolidated and Emergency Supplemental Appropria- tions Act,
1999, Pub. L. No. 105-277, s 1004(b), 112 Stat. 2681,  2681-888 to
2681-889 (1998) (codified at 26 U.S.C. s 6104 (West  Supp. 1999)).
Although the amendment altered the statutory lan- guage slightly,
those changes are not relevant to the issue before  us. Accordingly,
we need not and do not address those differences  here.


The IRS has declined throughout this litigation to disclose  whether a
closing agreement with CBN exists, and the dis- trict court did not
examine the documents in question before  dismissing the complaint.
Instead, the court concluded from  the pleadings that the information
requested by Tax Analysts  represents a closing agreement as defined
by I.R.C.  s 7121(a), 26 U.S.C. s 7121(a) (1994), and therefore
consti- tutes tax return information that as a matter of law is
outside  the scope of I.R.C. s 6104 and exempt from disclosure under 
FOIA Exemption 3 and I.R.C. s 6103. Accordingly, the  district court
granted judgment on the pleadings as a matter  of law pursuant to
Federal Rule of Civil Procedure 12(c) in  favor of the IRS.


With respect to the claim against CBN, the district court  also
concluded that I.R.C. s 6104 does not contemplate a  private right of
action to enforce the obligation of an applicant  for tax exempt
status to make its application papers available  to the public.
Accordingly, the district court dismissed the  action against CBN for
failure to state a claim upon which  relief can be granted pursuant to
Federal Rule of Civil  Procedure 12(b)(6). Tax Analysts appeals both
the judgment  and dismissal.


B.


We first consider whether the information requested by  Tax Analysts
falls within the scope of I.R.C. s 6104(a)(1)(A),  and thus must be
disclosed despite FOIA Exemption 3 and  I.R.C. s 6103. As noted above,
I.R.C. s 6104(a)(1)(A) specifi- cally requires disclosure of the
application for exempt status,  "any papers submitted in support of
such application," and  "any letter or other document issued by the
[IRS] with  respect to such application." Statutory phrases like "any 
papers" and "any letter or other document" suggest breadth  within
those delineated categories of disclosable information.  Regulations
promulgated by the Department of the Treasury  reinforce this
suggestion by providing both a list of applica- tion materials, see
Treas. Reg. s 301.6104(a)-1(d)(2), 26  C.F.R. s 301.6104(a)-1(d)(2)
(1999), and a catch-all provision 


stating that "any statement or document not described in  paragraph (d)
of this section that is submitted by an organiza- tion in support of
its application." Treas. Reg. s 301.6104(a)- 1(e). The catch-all
provision further offers a legal brief as an  example of a disclosable
document. See id. Despite the  breadth of I.R.C. s 6104(a)(1)(A) and
related regulations,  however, it is also clear from the statute that
not every  document pertaining to an exempt organization that the IRS 
has on file falls within the provision's scope. See, e.g., Lehr- 
feld, 132 F.3d at 1465-66 (concluding that I.R.C.  s 6104(a)(1)(A)
does not cover papers submitted by third  parties because such
documents are neither submitted by the  applicant nor issued by the


Beyond the obvious examples of the exemption application  itself and
the final determination letter issued by the IRS, the  statute does
not articulate exactly what constitutes a docu- ment that "supports"
an exemption application or is "issued  ... with respect to" an
exemption application. Tax Analysts  argues that an applicant might
submit a closing agreement as  a supporting document for an exemption
application, and that  both the closing agreement and documents
generated in the  process of negotiating the closing agreement might
also be  submitted by the applicant in support of or issued by the IRS
 concerning that application. Also, Tax Analysts asserts that  the IRS
may possess legal briefs, letters, memoranda, and  other papers
submitted by CBN's attorneys, accountants,  officers, or directors
presenting arguments in favor of CBN's  exempt status or explaining or
excusing CBN's political activ- ities. Accordingly, Tax Analysts
maintains that the district  court erred in concluding that there was
no set of facts under  which Tax Analysts could state a cause of


The IRS, on the other hand, while not acknowledging  whether the sought
documents exist, takes the position that a  closing agreement and its
documentary precursors, by their  very nature and regardless of their
content, are return infor- mation protected by FOIA Exemption 3 and
I.R.C. s 6103,  beyond the scope of I.R.C. s 6104(a)(1)(A). The IRS
points  to the list of application materials in Treas. Reg.  s
301.6104(a)-1(d)(2), which includes particular types of docu-


ments and statements like the applicant's articles of incorpo- ration
and bylaws, financial statements, and organizational  charts, but does
not mention closing agreements. See Treas.  Reg. s
301.6104(a)-1(d)(2).


If IRS forms and regulations require the filing of particular  types of
documents as part of an application for exemption,  then clearly such
documents are submitted in support of the  application regardless of
their content. The converse, that  other types of documents cannot be
included in the statutory  phrase "submitted in support of such
application," does not  necessarily follow. While I.R.C. s 6104(a)(1)
explicitly re- quires disclosure of applications for exempt status and
letters,  the descriptions that define which documents and letters are
 disclosable--"in support of such application," and "with re- spect to
such application"--speak to content without limita- tion as to type of
document. Also, the catch-all provision of  Treas. Reg. s
301.6104(a)-1(e), by its express inclusion of  other documents, denies
the notion that the prescribed list  represents the outer bounds of
disclosability. We note fur- ther that I.R.C. s 6103(b)(2), in
defining "return information,"  similarly uses descriptions of content
rather than titles and  labels to articulate which taxpayer records
should be held  confidential.


The IRS has never denied that an applicant might submit a  particular
document both to negotiate a closing agreement  and to support an
exemption application where the two  processes share overlapping
issues. Moreover, at oral argu- ment, the IRS conceded that a closing
agreement which  would generally in its view be exempt from disclosure
as  return information nevertheless might become disclosable if 
submitted in support of an exemption application. Precluding 
disclosure of a closing agreement, without regard to its  content or
circumstances, merely because it carries that  particular label is
therefore inconsistent with the statutory  inclusion of "any papers
submitted" and "any letter or docu- ment issued." Particularly in this
case, where the press  release suggests that the closing agreement and
application  for exempt status were part of a single, overall
negotiation  between the IRS and CBN, the IRS's rigid reliance on the


type of documents at issue rather than their content is 


In arguing against remand for further discovery, the IRS  relies
heavily upon another case involving closing agreements,  Tax Analysts
v. IRS, 53 F. Supp. 2d 449 (D.D.C. 1999). In  that case, the district
court granted summary judgment for  the IRS on the ground that the
closing agreements were not  disclosable under I.R.C. s 6104(a)(1)(A)
because they were  not " 'issued' by the IRS," but were instead
bilateral contracts  between the IRS and the applicants in question.
Id. at 453.  Without endorsing this view of the meaning of "issued by
the  IRS," we note that the district court in that case conducted  an
in camera review of the agreements in question before  concluding that
they did not fall within the scope of I.R.C.  s 6104(a)(1)(A). That
court based its decision principally  upon "the character of the
closing agreements themselves,"  id. at 453 n.6, explicitly leaving
open the question of whether  a closing agreement might itself
constitute an application for  exempt status disclosable under I.R.C.
s 6104(a)(1)(A). See  id. at 453 n.7. In other words, far from
supporting the IRS's  argument that further discovery would be
fruitless, that case  better supports the conclusion that some review
of the con- tent of the documents in question is necessary before the 
court can adequately determine whether or not I.R.C.  s 6104(a)(1)(A)


At bottom, the case before us does not present a disagree- ment over
the law to be applied, but the narrow and fact- specific question of
whether the closing agreement between  the IRS and CBN and any
accompanying documentation  represent material discloseable under
I.R.C. s 6104(a)(1)(A),  despite their apparent status as material
exempt from disclo- sure under I.R.C. s 6103. As the present record is
inade- quate for such determination, further discovery is necessary. 
We therefore vacate the district court's judgment in favor of  the IRS
and remand for further proceedings consistent with  this opinion. We
leave to the district court in the first  instance the question of
whether in camera examination or  the filing of a Vaughn index is
sufficient to create an ade-


quate record upon which to base the discloseability determi- nation.


C.


We turn next to Tax Analysts' claim against CBN. The  district court
dismissed that claim after concluding that I.R.C.  s 6104 does not
contemplate a private right of action to  enforce the public
inspection requirement imposed upon ap- plicants for tax exempt
status. I.R.C. s 6104 does not ex- pressly provide for private action
against exempt organiza- tions that fail to make available their
exemption applications  and supporting documentation. Indeed, the
provision offers  no language at all concerning remedies for its
violation. Tax  Analysts argues that this omission does not preclude
its cause  of action against CBN for allegedly violating that
statute's  public inspection requirement, and that Congress intended a
 private remedy to effectuate the public inspection require- ment.
CBN, unsurprisingly, maintains that I.R.C. s 6104  does not support an


Although violation of a federal statute alone is inadequate  to support
a private cause of action, see, e.g., Touche Ross &  Co. v. Redington,
442 U.S. 560, 568 (1979) (quoting Cannon v.  University of Chicago,
441 U.S. 677, 688 (1979)), the Supreme  Court has repeatedly
recognized that, in some cases, the  courts may infer such a remedy
from the language or struc- ture of a statute or the circumstances of
its enactment. See,  e.g., Karahalios v. National Fed'n of Fed.
Employees, Local  1263, 489 U.S. 527, 532-33 (1989); Transamerica
Mortgage  Advisers, Inc. v. Lewis, 444 U.S. 11, 18 (1979). The
question  we must resolve is whether Congress intended to provide a 
private remedy for violations of the public inspection require- ment
of I.R.C. s 6104. See, e.g., Thompson v. Thompson, 484  U.S. 174, 179
(1988); Transamerica, 444 U.S. at 15.


To answer that question, we turn to the long line of cases  stemming
from Cort v. Ash, 422 U.S. 66 (1975). In Cort, the  Supreme Court
articulated four factors for the courts to  weigh in discerning
congressional intent to provide an implied  private right of action:
(1) whether the plaintiff is one of the 


class for whose benefit the statute was enacted; (2) whether  some
indication exists of legislative intent, explicit or implicit,  either
to create or to deny a private remedy; (3) whether  implying a private
right of action is consistent with the  underlying purposes of the
legislative scheme; and (4) wheth- er the cause of action is one
traditionally relegated to state  law, such that it would be
inappropriate for the court to infer  a cause of action based solely
on federal law. See id. at 78;  see also Suter v. Artist M, 503 U.S.
347, 364 n.16 (1992)  (recognizing the four Cort factors); Thompson,
484 U.S. at  179 (expressing reliance upon the Cort factors). Over the
 years, the proper application and continued vitality of Cort's  four
factors have been matters of great debate, as reflected in  the
parties' arguments. Tax Analysts contends that we  should mechanically
consider and weigh each of the four  factors, and cites numerous
Supreme Court cases as support- ing its position. CBN maintains,
conversely, that the Su- preme Court has discarded step-by-step
evaluation of the  Cort factors, and cites as many cases sustaining


Turning to our own jurisprudence in this area, in Govern- ment of Guam
v. American President Lines, 28 F.3d 142  (D.C. Cir. 1994), we
reviewed Cort and its progeny and  concluded that, in assessing
whether Congress intended an  expressly provided remedy to be the only
remedy, "the  central analysis is directed at discovering legislative
intent by  means of 'the language of the statute, the statutory
structure,  or some other source.' " Id. at 145 (quoting Karahalios,
489  U.S. at 532-33). We also acknowledged that, where Congress  has
otherwise enacted "a comprehensive legislative scheme  including an
integrated system of procedures for enforce- ment," there is a strong
presumption that Congress deliber- ately did not create a private
cause of action. Id. at 145-46  (quoting Massachusetts Mut. Life Ins.
Co. v. Russell, 473  U.S. 134, 147 (1985)).


Although I.R.C. s 6104 does not articulate a remedy for its  violation,
elsewhere in the tax code, Congress provided an  enforcement mechanism
of IRS-imposed civil fines and penal- ties for s 6104. See I.R.C. s
6652(c)(1)(C)-(D). Additionally,  current IRS regulations offer the
public a mechanism for 


complaining to the IRS about an exempt organization's failure  to
comply with s 6104. See 26 C.F.R. s 301.6104(d)-1(g).  Although these
regulations did not take effect until after Tax  Analysts filed suit,
we note that the IRS has long accepted  information from third parties
regarding taxpayers' failure to  comply with the tax laws, even in the
absence of a specific  regulatory mechanism for doing so. If ever a
case demon- strated a "comprehensive legislative scheme including an 
integrated system of procedures for enforcement," Govern- ment of
Guam, 28 F.3d at 145-46, it would be this one.


Moreover, we note that the exempt organization is not the  only source
from which an interested party can obtain copies  of the
organization's exemption application and supporting  documents. As Tax
Analysts' claim against the IRS amply  demonstrates, I.R.C. s 6104
permits interested parties to  gain access to the same documents from
the IRS. Addition- ally, we note that I.R.C. s 6104(e) does not
require an exempt  organization to release for public inspection any
document  that the public could not otherwise procure from the IRS. In
 other words, Tax Analysts achieves nothing through a private  right
of action against CBN that cannot be obtained from the  government in


Our analysis comports with that of the only other courts to  consider
whether I.R.C. s 6104 creates an implied private  remedy. See Schuloff
v. Queens College Found., Inc., 994  F. Supp. 425, 427-28 (E.D.N.Y.
1998), aff'd, 165 F.3d 183 (2d  Cir. 1999). For all of these reasons,
we conclude that I.R.C.  s 6104 does not provide a private right of
action, and affirm  the district court's dismissal of Tax Analysts'
claim against  CBN.


Conclusion


In summary, because we find the present record inade- quate to
determine whether the closing agreement between  the IRS and CBN and
any accompanying documentation are  disclosable under I.R.C. s
6104(a)(1)(A), we vacate the judg- ment in favor of the IRS on Tax
Analysts' FOIA claim and  remand for further proceedings, leaving to


the question of how best to create an adequate record. We  hold,
however, that s 6104 does not provide Tax Analysts  with a private
right of action against CBN, and affirm the  district court's
dismissal of that claim.