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that it is intended to protect from disclosure operating rules, guidelines, and manuals of procedure for Government investigators and examiners, which can'not be disclosed to the public without substantial prejudice to the effective performance of the agency functions. (Attorney General, p. 71) These terms include criteria or guidelines in auditing or inspection procedures, or in the selection or handling of cases, such as operational tactics, allowable tolerances, or criteria for defense, prosecution, or settlement of cases. (Cf. H. Rept., pp. 7-8) Tested under these standards, material in the Engineers' Coordination Digest would appear to relate to this exemption.

TRANSMITTAL MEMORANDUM FOR REGULATIONS; TECHNICAL MEMORANDUM FOR REGULATIONS

Transmittal and technical memorandums for regulations fall within the purwiew of section 552 (b) (5) as "inter-agency or intra-agency memorandums or letters which would not be available by law to a party other than an agency in litigation with the agency."

Transmittal and technical memorandums record the opinions and deliberations of the persons who drafted the regulations with regard to such matters as the strengths and weaknesses of approaches taken in the regulations and possible errors or loopholes in the statutes to which the regulations relate. It is concluded that they are clearly inter-agency or intra-agency memorandums which are privileged from discovery and are thus not routinely disclosed to a private party through the discovery process. Accordingly, the section 552(b)(5) exemption may be raised with respect to transmittal and technical memorandums.

Reference is here made to the portion of this memorandum relating to exemption 552 (b) (5) for a detailed discussion of the status of internal communications under the Federal discovery rules together with the degree of security afforded. It should be noted that in particular cases several other exemptions, such as section 552(b) (3), (4), and (9), may be applicable to transmittal and technical memorandums. This would occur, for example, where the memorandums contain tax information which is protected from disclosure by section 6103 and similar sections of the Code (section 552 (b) (3)); information volunteered by interested persons under a pledge of confidentiality (section 552(b)(4)); and geological and geophysical information and data concerning oil and gas wells (section 552 (b) (9)).

COMMENTS FROM THE PUBLIC ON PROPOSED REGULATIONS

Written comments from the public on proposed regulations fall within the purview of section 552 (b) (4) as matters that are "trade secrets and commercial or financial information obtained from any person and privileged or confidential." The legislative history of section 552 (b) (4) indicates an intention to protect documents or information which the Government has, in good faith, obligated itself not to disclose, as well as documents or information given to an agency in confidence. (H. Rept., p. 10)

The Service has a long-standing practice of treating comments from interested persons on proposed regulations as confidential and refusing to disclose either the comments or the names of the persons making the comments. Section 601.601 (b) of the Statement of Procedural Rules announces this practice to the public. This practice is intended to encourage the submission of useful practical information by persons interested in the proposed regulations and which the Service would, in most instances, be unable to obtain from other sources.

It is concluded that the Service has in good faith and for good reason obligated itself not to disclose comments or the names of the persons making the comments. Accordingly, the comments and the names are exempt under section 552 (b) (4) from the disclosure provisions of section 552 (a).

It should also be noted that section 601.601(b) expressly provides that the name of any person requesting a public hearing and the issues which may be discussed at the hearing are not confidential. Accordingly, these matters would not be exempt under section 552 (b) (4).

From time to time, consideration has been given to changing the Service's practice with respect to the confidentiality of comments. Since there have been many different suggestions as to the exact nature and extent of the proposed change, no attempt is made to discuss the application of the Act should such a change occur. However, it is concluded that the section 552 (b) (4) exemption must be relied on to prevent disclosure with respect to comments received as long as the Service's outstanding position continues.

LEGISLATIVE FILES

The documents in the legislative files of the Service primarily fall within the exemption of section 552(b) (5) as "inter-agency or intra-agency memorandums or letters which would not be available by law to a party other than an agency in litigation with the agency."

Documents in the legislative files often take the form of memorandums prepared in the Service, in Treasury, or in another agency, concerning the merits or ramifications of potential legislation. Frequently, the documents are actual legislative recommendations. These recommendations are records of advisory opinions and deliberations of Service and Treasury personnel containing such matters as strengths and weaknesses of existing statutes, the need for statutory changes, and the form which such changes should take. The file may contain the preliminary drafts of potential legislation and committee reports. The preliminary drafts may have been substantially changed in the final version of the statute or committee reports but still have value for record purposes and in tracing the development of the final version.

It is concluded that all of these documents are inter-agency or intra-agency communications which are subject to a conditional privilege from discovery and are thus not routinely disclosed to a private party through the discovery process. Accordingly, the section 552(b) (5) exemption may be raised with respect to them. Reference is here made to the portion of this memorandum relating to exemption 552(b) (5) for a detailed discussion of the status of internal communications under the Federal discovery rules together with the degree of security afforded.

ACTIONS ON DECISIONS

All Actions on Decision are exempt from disclosure under section 552(b) (5) as intra-agency memorandums which would not be available by law to a party other than an agency in litigation with the agency. In addition, some Actions on Decision would also be exempt under section 552(b)(2) as matters relating solely to the internal personnel rules and practices of an agency.

In essence, an Action on Decision is a document having a two-fold purpose: (1) to determine whether the Service will recommend appeal of an issue decided, in whole or in part, adversely to it by the Tax Court or United States District Court, or request certiorari in cases decided by the Court of Claims or a United States Court of Appeals, and (2) to determine whether the Commissioner will accept the issue involved in the disposition of other cases. See Chief Counsel's Office Tax Court Division Manual ¶ 1601.

In Tax Court cases, acceptance or nonacceptance of a decision is signified by the terms "acquiescence" and "nonacquiescence," which determination is announced in the Internal Revenue Bulletin with respect to the adverse published opinions of the Tax Court. The Service's position as to adversely decided issues in memorandum opinions of the Tax Court is not officially published

All Actions on Decision should fall within section 552(b) (5), which exempts from disclosure "inter-agency or intra-agency memorandums or letters which would not be available by law to a party other than an agency in litigation with the agency." The Senate report interprets this exemption as including the working papers of an agency attorney and documents which would come within the attorney-client privilege as applied to private parties. (S. Rept., p. 2) Thus, there appears to be Congressional recognition of the "attorney work-product" privilege through exemption (b) (5). Section 552 (b) (5) is discussed in detail elsewhere in this memorandum, wherein is referenced the status of internal communications under the Federal discovery rules, together with the degree of security afforded.

In brief, Actions on Decision fall within the scope of the section 552(b)(5) exemption because of their characteristic as intra-agency memorandums containing advisory opinions, deliberations, mental processes, or similar matter. In essence, they contain the views of an attorney relative to the strengths and weaknesses of a case, with the Service position stated thereon. As above noted, the Service announces its position in a case in the form of an "acquiescence” or "nonacquiescence". However, the recommendations, deliberations, contributive influences and reasons comprising the basis for that decision may properly be kent confidential under the purview of section 552 (b) (5).

In certain instances an Action on Decision may recommend a change in Service policy or procedure. Where this occurs, the final decision of the Service would

be reflected in a revenue rule, revenue procedure or through revision of a regulation. Therefore, until the revenue rule or Service position is finally decided upon, the Action on Decision is merely a recommendation in the formulation of precedential Service position. As such, it would be within the scope of section 552 (b) (5).

In addition, certain Actions on Decision may fall within the scope of section 552(b)(2), which exempts from disclosure matters that are "related solely to the internal personnel rules and practices of an agency." The House report states that section 552(b) (2) would exempt from public disclosure such matters as "operating rules, guidelines, and manuals of procedure for Government investigators or examiners." (H. Rept., p. 10) These terms are construed to include criteria or guidelines in the selection or handling of cases, such as operational tactics, or criteria for the defense, prosecution, or settlement of cases. (Cf. H. Rept., pp. 7-8)

RECORDS UNDER THE RIRA SYSTEM

Because the RIRA system encompasses records prepared by lawyers in connection with the preparation for trial, it may be argued that the entire RIRA system is exempt under section 552 (b) (5) as the "work product" of attorneys. In other words, the RIRA system represents the work product of the Chief Counsel's Office for handling its total litigation load. Even if a uniform exempt classification cannot be assigned to the entire system, it is clear that certain records, such as the Prime Issue List of cases and the Abstracts, may be specifically classified as exempt under section 552(b) (2) or 552 (b) (5).

The records in the RIRA system are maintained on microfilm, magnetic tapes, or print-outs from magnetic tapes. The basis of the system is the Uniform Issue List (section 1275 of the Internal Revenue Manual which has been classified as not exempt). This list consists of legal descriptors keyed directly to the Internal Revenue Code section involved. Each attorney handling a pending file utilizes a multipurpose reporting form and the descriptors in the issue list. The reporting forms are then key punched and processed into the various statistical formats which comprise the RIRA system. For the most part the records generated from the magnetic tapes contain about the same information. However, each record is in a different format and some have more coded information depending on use. The very nature of the system is that, as a result of programming, the magnetic tapes can generate print-outs in almost any form, categorizing the information to fit the particular need.

The following are the principal records presently used in the RIRA system: 1. Pending index;

2. History file;

3. Pending case index by office and attorney;

4. Pending and closed register by office and attorney;

5. Master file;

6. Prime issue list of cases;

7. Abstracts.

It is arguable that the entire RIRA system falls under section 552(b)(5) which exempts from disclosure inter-agency and intra-agency memorandums which would not be available to a party other than an agency in litigation with the agency. The Senate report interprets this exemption as including, inter alia, the working papers of an agency attorney and documents which would come within the attorney-client privilege as applied to private parties. (S. Rept., p. 2) Thus, there is Congressional recognition of the "attorney-work-product" privilege through exemption (b) (5).

An attorney's work product has been defined as the "impressions, observations and opinions which he has recorded and transferred to his file." Scourtes v. Fred W. Albrecht Grocery Co., 15 F.R.D. 55 (N.D. Ohio 1953). This work product of a lawyer is protected, not because of strict privilege, but because to hold otherwise would interfere seriously with the vital function performed by counsel. Manning v. State Farm Mutual Automobile Insurance Co., 235 F. Supp. 615 (D.C.N.C. 1964). Any problem concerning the discovery of an attorney's work product must inevitably start with the case of Hickman v. Taylor, 329 U.S. 495 (1947). In that case, the plaintiff sought to obtain copies of statements obtained from witnesses by an attorney representing the defendant. The Supreme Court, in sustaining objections to the interrogatories stated:

"Here is simply an attempt without purported necessity or justification, to secure written statements, private memoranda and personal recollections prepared

or formed by an adverse party's counsel in the course of his legal duties. As such, it falls outside the arena of discovery and contravenes the public policy underlying the orderly prosecution and defense of legal claims. Not even the most liberal of discovery theories can justify unwarranted inquiries into the files and mental impressions of an attorney. . . . The general policy against invading the privacy of an attorney's course of preparation is so well recognized and so essential to an orderly working of our system of legal procedure that a burden rests on the one who would invade that privacy to establish adequate reasons to justify production...." 329 U.S. at 510-12.

...

As a general rule, it may be said that the work product of an attorney is not normally a proper subject of discovery. Ayers v. Pastime Amusement Co., 240 F. Supp. 811 (D.C.S.C. 1965); Johnson v. Chicago, Rock Island and Pacific Ry. Co., 228 F. Supp. 160 (D.C. Minn. 1964); Radiant Burners, Inc. v. American Gas Ass'n., 207 F. Supp. 771 and 209 F. Supp. 321 (D.C. Ill. 1962); Smigiel v. Compaigne De Transp. Occaniques, 183 F. Supp. 518 (D.C. Pa. 1960). However, even if the courts find that work-product material is involved, they may allow discovery upon a showing of sufficient cause or good cause. Redfern v. American President Lines, Ltd., 228 F. Supp. 227 (D.C. Calif. 1963); Diamond v. Mohawk Rubber Co., 33 F.R.D. 264 (Colo. 1963); Commonwealth Edison Co. v. AllisChalmers Mfg. Co., 211 F. Supp. 736 (D.C. Ill. 1962).

In applying the work-product standard of the Hickman case, it appears that the courts have differed in their views of the underlying rationale for the workproduct doctrine and, perhaps for this reason have differed in defining its scope. One school of thought, relying upon the emphasis in the Hickman opinion on the importance of preserving the privacy of a lawyer's "mental processes", has concluded that the doctrine is intended largely to immunize trial strategy from discovery. Guilford National Bank v. Southern Ry., 24 F.R.D. 493, 499 (M.D. N.C. 1960). Other courts, however, have taken a broader view and also protected from discovery statements of witnesses to an accident obtained by others for use of counsel, subject matter in which a lawyer's mental processes obviously played little part. Snyder v. U.S., 20 F.R.D. 7 (E.D. N.Y. 1956). While it would appear from the above cases that an attorney's mental impressions, conclusions, or legal theories are generally privileged, if relevant factual material is involved and good cause has been shown to a degree sufficient to require production of nonprivileged materials and there is no attempt to secure the mental impressions of the attorney, discovery has generally been allowed. U.S. v. Gates, 35 F.R.D. 524 (Colo. 1964); Burke v. United States, 32 F.R.D. 213 (E.D. N.Y. 1963); Diamond v. Mohawk Rubber Co., supra; E.I. Dupont De Nemours & Co. v. Phillips Petroleum Co., 24 F.R.D. 416 (Del. 1959).

While there are no cases specifically involving matter contained in RIRA, there are cases pertaining to legal memorandums from corporate counsel to trial counsel or agency counsel to trial counsel in the Department of Justice. Such cases have generally held that the memorandums are attorney's work product and hence not discoverable absent a showing of very good cause. In the case of United States v. American Optical Co.,F.R.D. 233 (E.D. Wisc. 1965), the defendant moved for the production of certain documents from the plaintiff, United States. The documents included memorandums prepared by Government attorneys to their superiors on the theory of the case, together with the responses of the superiors and memorandums prepared on conferences with witnesses and persons in the optical industry. All were held to be covered by the work-product concept and, accordingly, were not discoverable absent a showing of good cause. A valid argument may be made that issue classification of cases pending in litigation is work product to the same extent as memorandums detailing the legal theories of the case.

In Vilastor-Kent Theatre Corp. v. Brandt, 19 F.R.D. 522 (S.D. N.Y. 1956), there was a motion to produce a memorandum written prior to litigation, but with the apprehension of litigation. The memorandum was forwarded by corporate counsel to individual co-counsel. The memorandum was held to be work product which would be produced only on meeting a "stringent standard of good cause" (p. 525). The court pointed out that the movant has the burden of showing that production of the document is essential to the preparation of his case. See also 4 Moore's Federal Practice 1381, which construes Hickman v. Taylor, supra to mean that attorney's work product is discoverable only when the case is "a rare one having exceptional features which make the disclosure necessary in the interests of justice."

In view of the foregoing, it is concluded that with respect to specific cases RIRA represents work product of the attorney assigned to the case. However, the Chief Counsel's Office stands on a somewhat different footing than an individual attorney with respect to whom the usual concept of work product has been applied over the years. The function of the Chief Counsel's Office is, of course, to handle or be involved in all of the Commissioner's tax litigation. As such, the work-product doctrine can and should be extended beyond narrow limitations of individual cases to the totality of the litigation. The determination of the issue in the case and the determination of whether the issue is similar to issues in other pending cases involves legal analysis and mental processes of attorneys in the Chief Counsel's Office (including regional counsel) which clearly comes within the work-product concept.

With regard to particular records in the RIRA system, even aside from the attorney work-product privilege, it appears clear that the Abstract record falls within exemption 552 (b) (5). Since the Abstract record is, in effect, a memorandum by the attorney handling the case summarizing the facts and often pending strategy or defense information, including a statement of the strengths or weaknesses of the case, it would clearly constitute an intra-agency memorandum. However, in order to fall within the section 552(b) (5) exemption it must be a memorandum of the type which would not be available by law to a private party in litigation with the agency. Since the Abstracts contain the deliberations, advisory opinions, and views of subordinate personnel with regard to the handling of cases, even without regard to the attorney work-product doctrine, they would be privileged from disclosure and not routinely available to a private litigant. Accordingly, the section 552 (b) (5) exemption would apply to Abstracts. Reference is made to the portion of this memorandum relating to exemption 552(b) (5) for a detailed discussion of the status of internal communications under the Federal discovery rules and the degree of security afforded.

It seems clear the Prime Issue List falls within section 552 (b)(2) which exempts from disclosure matters relating solely to the internal personnel rules and practices of an agency. The legislative history of this exemption states that it is intended to protect from disclosure operating rules, guidelines, and manuals of procedure for government investigators and examiners. (H. Rept., p. 10). This exemption includes guidelines in the selection or handling of cases, such as operational tactics, or criteria for defense, prosecution, or settlement of cases (Cf. H. Rept., pp. 7-8). Tested under these standards, it would appear that the Prime Issue List would fall squarely within the scope of handling of cases in litigation and several other of the aforementioned descriptive terms.

With respect to the remaining items listed above, much of the information contained in these records is already public information. For example, the Pending Index is a computer print-out of the entire file of cases in issue sequence, together with the name of the taxpayer, docket number, status, coded classification of the case (standard or prime), coded classification of the particular issue, the date of origin, date of last change, the attorney (by code number) who is working on the case, and the microfilm reference number to an Abstract on the case. It can be seen that much of this information is available to the public from other sources, c.g., commercial publications such as CCH or the various courts handling the cases. The same is true with respect to the remaining records listed above which contain more or less the same information in a different format.

It is arguable that if a particular record makes reference to whether a case is standard or prime, which is clearly exempt information, the entire record is exempt under section 552 (b) (2), discussed above. However, it is felt that this would not be adequate reason for classifying the entire record as exempt because the designations standard or prime can be readily masked. Although there is no requirement under the statute for procuring or compiling a new record in order to facilitate the disclosure of information (Attorney General, p. 54), it is doubtful whether the mere "masking" of information would be considered as the procuring or compiling of a new record.

If it is decided not to attempt to exempt the entire RIRA system on the basis of the attorney work-product privilege under (b) (5), perhaps an approach which might avoid these problems and which would be considered in accord with the spirit of the Act, would be to print out for public consumption from RIRA as an entirely new record that information which, after deliberation, the Service feels would be useful to the public but would not damage the litigation position of the Service. By making this information available voluntarily in an acceptable

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