Taxpayer Privacy Protection Takes A Crucial Hit: IRC § 6103, Taxpayer Information, & Private Letter Rulings

Section 6103 of the Internal Revenue Code (“IRC”) sets out taxpayer privacy rules and keeps tax returns, including certain sensitive taxpayer information, outside the scope of the federal Freedom of Information Act (“FOIA”).[1] [2] Notably, Section 6103 is typically interpreted broadly by courts. Section 6103 provides invaluable privacy protections in the context of Private Letter Rulings (“PLR”), especially for taxpayers who utilize complex tax planning. A PLR is a written statement by the Internal Revenue Service (“IRS”) that interprets and applies tax laws to a specific set of facts or prospective transaction and is issued in response to a written request for guidance by a taxpayer.[3] PLRs are used by both individual and entity taxpayers who wish to confirm with the IRS that “a prospective transition will not likely result in a tax violation.”[4] [5] PLRs from 1997 onward are publicly available via the IRS Electronic reading room.[6] [7]

Taxpayers who rely on PLRs assume that these so-called “private” letter rulings are indeed private when they seek the IRS’s blessing on prospective transactions. While PLRs are not considered precedent, they are made public after IRS approval, but all information that would identify the taxpayer who requested the PLR is removed prior to publication.

However, the Sixth U.S. Circuit Court of Appeals’ ruling on Tuesday regarding what is “return information” (and thus protected by Section 6103) and what is not has likely reduced some privacy protections previously enjoyed by taxpayers, including in the context of PLRs.

The ruling was issued in a case filed by NorCal Tea Party Patriots who challenged how the government handled tax-exempt applications of Tea Party groups. One important question addressed was whether applicant names could be considered “return information,” as defined by Section 6103.  In the unanimous ruling by a three-judge panel, the appellate court distinguished between applications for tax-exempt status and protected tax returns, stating, “As a matter of elementary statutory interpretation, the IRS’s assertion that applicant names are return information is meritless.”[8] In other words, according to this ruling, applicant names are not protected by Section 6103 and can be made public. The same was said about applicant addresses and tax identification numbers as well.

Previously, the government, taxpayers, and tax lawyers operated under the assumption that tax-exempt groups’ names only became public if the IRS approved their application. When the IRS released redacted letters denying tax-exempt status, it never made the names of groups that applied and withdrew available to the public.[9]

The ruling ordered the IRS to produce internal records, reasoning that Section 6103’s privacy protections of “return information” do not apply to names and addresses of groups seeking tax-exempt status. Judge Raymond Kethledge wrote: “We hold that the names, addresses, and taxpayer-identification numbers of applicants for tax-exempt status are not ‘return information.’”[10]  Judge Kethledge further wrote that the law “does not entitle the IRS to keep secret (in the name of ‘taxpayer privacy,’ no less) every internal IRS document that reveals IRS mistreatment of a taxpayer or applicant organization—in this case or future ones,” and, “Section 6103 was enacted to protect taxpayers from the IRS, not the IRS from taxpayers.”[11]

While this ruling may be “against” the IRS, it appears this ruling unintentionally chips away at Section 6103’s taxpayer privacy protections. On Thursday, IRS Commissioner John Koskinen stated that this ruling could reveal new information about taxpayers to the public, including details of corporations’ request for tax guidance (via PLRs). As expressed by Mr. Koskinen, the rationale of Tuesday’s ruling, though in a case about tax-exempt groups, could extend far beyond nonprofits to any case where people or entities are filling applications and not tax returns. “Taxpayers doing that assume that that’s all private,” said Mr. Koskinen, “If suddenly your name on an application and your address is available to the’s going to raise a concern about a lot of taxpayers who may not want anyone else to know what they’re applying for.”[12]

The IRS has yet to publicly make legal conclusions about this ruling, or comment on how it might process requests seeking taxpayer information under FOIA as a result.  The Department of Justice, from whom the IRS will take guidance, has declined to comment publicly about this ruling.

Luckily—for now—this ruling applies only in the states covered by the Cincinnati-based Sixth U.S. Circuit Court of Appeals (Kentucky, Ohio, Tennessee and Michigan).[13] Nevertheless, Section 6103’s privacy protection previously relied upon by taxpayers, including those who use PLRs to guide their tax planning, has taken a crucial hit.[14]


By Keobopha Keopong, Esq., Barnes Law

 Keo Keopong is an associate attorney with Barnes Law, licensed to practice law in California.

The opinions expressed are those of the author and do not necessarily reflect the views of the firm, its clients, or any of its or their respective affiliates. This article is for general information purposes and is not intended to be and should not be taken as legal advice.


[1] 26 U.S.C. § 6103:



[4] Id.

[5] A PLR cannot be relied upon by other taxpayers or even IRS personnel. Id.

[6] See 26 U.S.C. § 6110.

[7] The procedures and user fees for obtaining a PLR are published annually in the first revenue procedure of each calendar year. Current procedures for obtaining a PLR can be found here:; Generally, a taxpayer sends a request for a PLR, including the applicable user fee pursuant to the instructions in Revenue Procedure 2016-1, section 7. See Revenue Procedure 2016-1, Appendix A, for a schedule of current user fees.







[14] George Yin, former chief of staff of the congressional Joint Committee on Taxation and now a law professor at the University of Virginia, said internal IRS processing of applications is covered by the privacy law.  “The other Circuits that have looked at this issue are correct but the 6th Circuit was not.”