Seven-Year FOIA Battle Ends with IRS Handing Over Records

WASHINGTON—The Institute for Justice’s (IJ) seven-year fight for IRS forfeiture records has finally ended after the IRS turned over significant amounts of data. The close of the case comes more than two years after the U.S. Court of Appeals for the D.C. Circuit ruled that the IRS cannot deliberately frustrate Freedom of Information Act (FOIA) requests by quibbling over immaterial technicalities.

“For years, the IRS used forfeiture to take property from people without charging them with a crime, yet the database tracking these forfeitures was hidden from the public,” said IJ Researcher Kathy Sanchez. “While we are glad to finally have the records, the length and difficulty of the fight shows that access to important government information is simply beyond most Americans. The lack of transparency is frightening.”

The effort started in March 2015 when IJ filed a FOIA request for all records contained in the IRS Asset Forfeiture Tracking and Retrieval System (AFTRAK). The IRS originally refused to release the information unless IJ paid more than $750,000 in fees. Once IJ brought suit under FOIA in December 2016, the agency reversed course and argued that AFTRAK is not actually a database and therefore cannot possibly contain records subject to FOIA. Rather than provide the actual data, the IRS provided a report concealing 99% of its contents, which the district court initially concluded satisfied the FOIA request.

After the appeals court returned the case to the district court with direction for the IRS to provide additional information about the contents of AFTRAK, the IRS admitted that AFTRAK is a database and that it had not disclosed AFTRAK’s complete contents to IJ. Following further proceedings ordered by the district court, the IRS has now provided IJ with all the data it sought.

Previously, the IRS provided IJ limited data about its forfeiture practices regarding civil and criminal “structuring.” The data revealed that the IRS had been aggressively applying structuring laws to seize lawfully obtained currency from innocent individuals and businesses. A front-page article in the New York Times that relied on these data, along with several cases filed by IJ challenging this practice, spurred the IRS to change its policy to limit structuring seizures to instances in which the seized funds were derived from illegal activity. Revealing the full contents of AFTRAK will shed important light on the rest of the IRS’s forfeiture activities.

IJ constantly uses FOIA to help the public understand government forfeiture activity across the nation. IJ has reported on cash seizures in airports after a FOIA suit against the Customs and Border Protection for its forfeiture database, and obtained many of the records in its flagship report Policing for Profit from FOIA.

IJ thanks Latham & Watkins LLP and attorneys Andrew Prins, Nick Schlossman, Josh Craddock, Ryan Baasch, Greg in den Berken and Matt Glover for their representation in this multiyear lawsuit. This case was a rare instance where IJ was the actual plaintiff in a lawsuit against a government agency rather than serving as the lawyers for victims of government abuse.