IRS Open-Records Lawsuit Likely to Proceed, Judge Says

A federal judge said Wednesday he is unlikely to dismiss a lawsuit that aims to force the Internal Revenue Service to produce nonprofit tax forms in a format that can be read by computers.

“It was a very good day for my client and for the public’s right of access,” said Thomas Burke, a lawyer who represents Public.Resource.Org, the organization that is trying to get the IRS to make it easier for the public to conduct online searches of the Form 990 returns that provide critical information about nonprofits’ finances, governance, and programs.

Mr. Burke spoke after a hearing in San Francisco in U.S. District Court in California’s Northern District. Public.Resource.Org has asked the IRS to provide Forms 990 in machine-readable format. Under present practices, some nonprofits submit the forms electronically to the IRS, which converts them to unsearchable image files.

The IRS asked the court to dismiss the suit, arguing that Internal Revenue Code provisions that are designed to protect confidentiality supercede the Freedom of Information Act, which requires federal agencies to provide documents in the format requested as long as they are “readily reproducible.”*

The IRS argued it would be difficult to create a new system for removing confidential information before releasing machine-readable files.

Although Judge William Orrick didn’t issue a formal ruling, he said twice during the hearing that he had tentatively decided to deny that request by the IRS, Mr. Burke said.

“Hopefully by fall, we’ll have this issue resolved by the court,” Mr. Burke said.

*Editor’s note: this language was changed from the original to more accurately reflect the IRS’s argument.